Whether you’re considering taking out a loan to help pay for your child’s college education or refinancing your existing parent PLUS loan, there are many options available. The first thing to do is to determine what loan you need. There are both Federal parent PLUS loans and Private parent student loans available.
Federal parent PLUS loans
Obtaining a Federal Parent PLUS loan can be a great way to pay for educational expenses. However, these loans may cost more than other options. Also, you must pay back the loan immediately.
The interest rate on a PLUS loan is fixed for the life of the loan. This rate helps you plan your repayment. You can also make extra payments to pay down the loan faster. However, if you choose to pay off your loan faster, you may end up paying more in interest.
Federal parent PLUS loans are designed for students who are attending college at least half-time. Students must also meet general federal student loan eligibility requirements.
The maximum amount that a parent can borrow is based on the student’s cost of attendance minus other financial aid. However, the limit is not limited like a traditional federal student loan. In addition, parents can defer repayment until their student graduates.
The federal government sends the Federal Parent PLUS loan funds directly to the school. The funds are then applied to the student’s tuition and fees. In addition, loan funds may be used to pay off the student’s room and board if he or she is on campus.
Private parent student loans
Taking out private parent student loans is a good way to help your child finance his or her education. However, you should be aware of some important details. Private parent loans are not affiliated with federal education loan programs, which means you will not qualify for certain benefits. These benefits include Public Service Loan Forgiveness and income-driven repayment plans.
Private parent loans are typically issued by non-government entities. You should check out several lenders before making your decision. Choosing a lender with competitive interest rates and flexible repayment options is important. You should also look for a lender with strong customer service.
Private parent loans can offer you a lower interest rate than parent loans offered by the government. But you will need a good credit history to qualify for the best rates.
Private parent student loans are a good option if you don’t want to be on the hook for paying your child’s debt for 10 years. Some lenders offer fixed $25 payments, which can make your life easier. Some private lenders also offer automatic debits from your account.
Refinance parent PLUS loans in your child’s name
Whether you are looking to refinance parent PLUS loans in your child’s name for college, or to consolidate federal loans, you have a number of options to choose from. Refinancing can lower your interest rate, shorten your repayment term, and lower your monthly payments. However, refinancing federal student loans may cost you access to the federal benefits and protections you may have received with your original loans.
Before you refinance parent PLUS loans in your child’s names for college, it’s important to understand how refinancing works and what to expect. There are many advantages to refinancing your federal student loans, but there are also disadvantages.
First, refinancing will not automatically improve your credit score. You will need to prove that you have a stable income and a low debt-to-income ratio. You also may need a co-signer to qualify.
Another advantage of refinancing is that you may be able to take advantage of flexible repayment plans and lower interest rates. You may even be able to take advantage of an income-driven repayment plan. You will need to find a lender that offers these options.