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How to shop for the best student loans for parents

How to shop for the best student loans for parents

You can get Same Day Payday Loans Online, No Credit Checks … – Bridge Payday. The Federal Student Aid Office offers Parent PLUS Loans, which are held solely by the parent of a college student. Similarly, some private lenders offer student loans that are held by the parent alone.

However, Parent PLUS Loans carry some of the highest interest rates of any federal student loans. That means you might be able to save money by applying for private parent loans rather than Parent PLUS Loans.

As with any financial product, you’ll need to shop around to find a good deal on student loans for parents. Here are some key features the best parent loans for college offers.

Low student loan rates

When you’re choosing student loans for parents, interest rates are key. The lower the rate, the less interest you’ll pay to incur the debt. So compare both private and federal loan rates to make sure you’re getting the best deal.

Low or no loan fees

Student loans for parents can come with charges such as student loan origination fees. Watch out for these costs and make sure to compare APRs, which will reflect the full cost of the loan — including any fees.

Student loans designed for parents

Allowing parents to cosign student loans is common. However, if you’re looking for a loan that won’t add to your child’s student debt, you’ll need to find lenders that offer loans directly to parents. We’ve highlighted our top picks below.

Eligibility requirements you can meet

Lastly, you might want to consider your creditworthiness. You’ll need a good credit score and history and a low debt-to-income ratio to qualify for most student loans for parents. If you’re unlikely to qualify on your own, you might need to apply with a cosigner who can.

4 best parent loans for college

4 best parent loans for college

Of course, having a starting point can help you with your search for the best student loans for parents. Here are our four favorite private lenders that currently offer parent student loans.

1. Citizens Bank Student Loan for Parents

  • Fixed rates on Citizens Bank student loans for parents
  • Rate discount of up to 0.50%
  • No origination fees or prepayment penalties
  • Parent-student loan terms of five or 10 years
  • Loan amounts up to $295,000 or certified cost of attendance
  • In-school interest-only or immediate repayment options

2. College Ave Parent Loan

    • Fixed and variable rates on College Ave student loans for parents
    • Rate discount of 0.25% after autopay enrollment
    • No origination fees or prepayment penalties
    • Student loan terms of five to 12 years
    • Loan amounts from $2,000 up to the certified cost of attendance
    • Option to disburse up to $2,500 directly to the parent for out-of-pocket expenses
  • Lower in-school payments or immediate repayment options

3. Sallie Mae Parent Loan

  • Fixed and variable rates for Sallie Mae parent loans
  • 0.25% rate discount for autopay enrollment
  • No origination fees or penalties for prepaying Sallie Mae student loans
  • The 10-year term on student loans for parents
  • Student loan amounts from $1,000 up to the certified cost of attendance
  • Option for interest-only payments while the student is enrolled, for up to 48 months
  • Available to spouses and other student benefactors as well as parents
  • Free quarterly FICO credit score updates

4. SoFi Parent Loan

  • Fixed and variable rates
  • Rate discount of 0.25% with autopay enrollment on SoFi student loans
  • No origination fees or prepayment penalties
  • Terms of five or 10 years
  • Loan amounts up to cost of attendance after another federal student aid is applied
  • Immediately enters full repayment
  • Perks such as unemployment protection, career support, and wealth advisors for SoFi student loans

How to decide if a parent-student loan is right for you

How to decide if a parent student loan is right for you

In addition to shopping around among private lenders, you should compare student loans for parents to other college financing options. Here are some questions to consider.

Is your credit good?

To figure out if you could benefit from private student loans for parents, consider your creditworthiness. The better your credit, the more likely it is that you’ll qualify for a parent loan — along with rates that are low enough to make them worth your while. If you don’t know your current credit score, you can quickly check it with free online credit check tools.

Typically, you’ll need good credit to excellent credit (a FICO score of around 700 or higher) to get the best rates on parent student loans.

If you qualify for low rates, you could save a lot in loan fees and interest — especially if you can beat the 7.00% interest rate and 4.276% loan fee on Parent PLUS Loans.

For example, SoFi states that its typical 5.849% APR on private parent loans saves $3,637 on a balance of $28,000 with a 10-year repayment term compared to borrowing with Parent PLUS Loans.

If your FICO score falls below that 700 benchmark, a Parent PLUS Loan might be a better choice. Parent PLUS Loan eligibility requirements are easier to meet than most private lenders’ credit standards. While private student loans require good credit, PLUS Loans simply require “nonadverse credit.”

Even if you do have adverse credit, it could be worth applying. If your Parent PLUS Loan is denied, the Federal Student Aid Office will allow your child to borrow more Direct Unsubsidized Loans to help cover any gap in funding.

Can you afford to repay parent student loans?

Some parents want to own a student loan to simplify the borrowing process and keep their child out of student debt.

Of parents who borrowed for their child’s college, two-thirds say they don’t regret it, according to our parent student loans survey, despite the fact that most parents reported student debt balances of $40,000 or more.

Still, you should borrow responsibly and take on student loans for parents only if you’re confident you can afford to repay them. Limit loan amounts as much as possible and choose a student loan term that will result in affordable student loan payments.

Also, make sure you can continue to prioritize other important financial goals, such as saving for retirement, alongside repaying student loans and covering college costs.

Are you and your child repaying student loans together?

Other parents might view repaying student loans as a responsibility their child should share. If that’s you, cosigning a private student loan might make more sense. That way, both you and your student share equal legal responsibility for repaying the debt.

Many lenders offer cosigner release, meaning your child eventually could assume full responsibility for managing and repaying the cosigned loan. Between cosigning a student loan or taking our parent loans on your own, consider which is the better fit for your financial future.

Ultimately, student loans for parents allow borrowers to pay for college costs and control future repayment if necessary. By reviewing this guide to the best parent loans, you’ll know how to choose the best borrowing option for you and your child.