Best lenders to refinance parent PLUS loans


While parent PLUS loans can help you foot the costs of your child’s higher education, the higher interest rates and loan amounts tend to make them expensive. Currently, more than 3.5 million Americans have this type of federal student loan, totaling $96 billion in debt, according to research by Trellis Company.

If you have a parent PLUS loan and you’re looking for ways to make your payments more manageable, refinancing may help. Below are four of the best lenders to refinance parent PLUS loans, based on interest rates, features and repayment options.

What is a parent PLUS loan?

A parent PLUS loan is a federal loan that parents can take out to pay for their children’s education costs. These come with fixed interest rates and generous loan limits: The parent can borrow up to the cost of the child’s attendance each year, minus the student’s other financial assistance.

These loans differ from other federal student loans because the parent is fully responsible for repaying the debt and must go through a credit check during the application process.

How to refinance a parent PLUS loan

When refinancing a parent PLUS loan, you’ll take out a private loan, pay off the original debt and then pay down the new loan over time.

Typically either you or your child can take out the new private loan — but if the new loan is in your child’s name, then you no longer have responsibility for the debt. Here are the steps you (or your child) would take to refinance the parent PLUS loan:

  • Get rate quotes. Compare offers from multiple lenders to see what your interest rate and monthly payment would be. Some lenders offer prequalification to let you see if you qualify for the loan, which involves a soft credit pull that won’t hurt your credit.
  • Apply for the loan. Once you’ve spotted a good deal, go through the application process to apply for the loan. This will involve a hard credit pull, and you may need to provide documentation. Once you’re approved, the lender will pay off your parent PLUS loan and issue the new loan. From there, you’ll make payments to a new loan servicer.

If your child’s financial standing has improved since graduation, they may be eligible for competitive interest rates. This can make repayment easier if they take over the debt. Eligibility requirements vary with each lender, but your child will generally need a good credit history and enough income to afford the payments.

Best lenders for refinancing a parent PLUS loan

The lenders selected below are based on interest rates, repayment terms and eligibility requirements.


Founded in 2011, SoFi is a well-known online lender that offers student loans, personal loans and even mortgages and investing products. You can refinance parent PLUS student loans at competitive rates that range from 4.23 percent to 10.66 percent for a fixed APR or 1.20 percent to 11.23 percent for a variable APR.


  • Soft credit check: To check whether you qualify, SoFi performs a soft credit pull that won’t impact your credit.
  • You or your child can refinance: You can apply for the loan in your name or have your child apply and take over the debt.
  • No fees: Borrowers won’t pay application fees, origination fees or prepayment penalties.
  • Co-signer release: Loans that are refinanced after May 1, 2019, may qualify for co-signer release.


  • No credit score disclosed: SoFi does not state a minimum credit score for its student loan refinancing, so it’s hard to know if you’ll qualify without going through prequalification.

Education Loan Finance

Education Loan Finance (ELFI) opened in 1994 as a division of Tennessee-based SouthEast Bank. It originates and refinances private student loans for undergraduates, graduate students and parents. Variable annual percentage rates start at 1.86 percent, while fixed rates start at 2.47 percent. When you apply, ELFI will pair you with a student loan advisor who can walk you through the application process and answer any questions along the way.


  • Strong customer service: Borrowers are assigned a student loan advisor to answer questions.
  • No fees: Borrowers won’t pay application fees, origination fees or prepayment penalties.
  • You or the child can refinance: You can apply for the loan in your name or have your child apply and take over the debt.


  • High minimum loan amount: Refinance loans start at $15,000, so it’s not a good fit if you’re looking to refinance a smaller amount.
  • Shorter loan terms: You can choose from loan terms of five, seven or 10 years, but other lenders offer longer term lengths.
  • Strict eligibility requirements: Borrowers must have a minimum credit score of 680 and earn at least $35,000. ELFI will also verify that you’ve earned at least a bachelor’s degree.


Earnest opened its doors in 2013 and was acquired by loan servicer Navient Solutions in 2017. Borrowers can choose from 180 repayment options and have access to generous forbearance programs if they hit financial trouble while in repayment. Variable rates start at 1.74 percent with AutoPay*, while fixed rates start at 2.44 percent with AutoPay*.


  • Low minimum loan amount: You can refinance as little as $5,000.
  • Flexible repayment: The lender has 180 repayment options, so you can choose the loan term and interest rate that works for your budget.
  • Forbearance programs: Borrowers with financial difficulties can choose to skip a payment once a year or access Earnest’s other forbearance options.


  • You can’t transfer the loan to your child: Parents must refinance their parent PLUS loan in their own name.


CommonBond was launched in 2011 and offers private student loans and refinancing. This lender offers generous forbearance options, low minimum loan amounts and a soft credit check to see if you qualify. Fixed APRs range from 2.59 percent to 6.94 percent, and variable APRs range from 1.97 percent to 7.03 percent.


  • You or the child can refinance: You can apply for the loan in your name or have your child apply and take over the debt.
  • High loan amounts available: CommonBond sets its maximum loan amount at a lofty $500,000.
  • Generous forbearance options: Borrowers facing financial difficulty may be able to pause payments for up to 24 months.
  • Soft credit check: You can see if you’ll qualify and your rates without a hard credit inquiry.


  • Loans aren’t available everywhere: Mississippi and Nevada residents won’t have access to Commonbond student loans.

When to refinance parent PLUS loans

Refinancing any federal student loan comes with a major drawback: You lose borrower protections offered by the Department of Education. But if you qualify for a lower interest rate than what you have now, it might be a good option for you. Here’s what to consider:

  1. Go over your monthly budget. Can you comfortably pay all of your bills, or do you need some breathing room? If refinancing your student loan helps you secure a lower monthly payment or lower interest rate, then you might be able to better manage your budget.
  2. Talk with your child. If your child agreed to take over the parent PLUS loan after graduation, talk with them about transferring the debt to their name. Help them figure out what they can afford.
  3. Shop around. Get loan quotes from multiple lenders and compare interest rates, fees and repayment options to see how much you could save by refinancing.

Consolidating parent PLUS loans

If refinancing into a private student loan isn’t right for you, or you want to keep protections that come with federal loans, consolidation is another option. With this move, the parent PLUS loan becomes a federal Direct Consolidation Loan.

A Direct Consolidation Loan won’t save you money in the long run, and this technique won’t allow you to transfer the debt to your child. But you might be able to lower your payments if you enroll in an income-driven repayment plan once you consolidate. You can also access other parent PLUS loan repayment options, such as loan forgiveness.

Depending on your balance, you can pay down the loan over 10 to 30 years. Keep an eye on interest costs, though. On a longer repayment schedule, you could pay more in interest over time.

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