If you’ve decided to help your children pay for college by taking out parent student loans, you’re likely looking to save money by finding the lowest interest rate.
However, there’s a lot more you should consider before submitting that loan application. Your lender — the company that manages the loan and to whom you make payments — can have a big impact on your borrowing experience.
Choose the wrong one, and you could end up with serious headaches. According to the Consumer Financial Protection Bureau, common servicer issues include misinformation about repayment options, improperly applied payments, and incorrect account reporting to the major credit bureaus.
If you’re looking for a reliable and reputable lender and loan servicer, SoFi student loans might be a smart option for you.
SoFi student loan options for parents
SoFi is a well-known private lender that offers student loans, personal loans, and home mortgages. There are two SoFi student loan options specifically designed for parents:
1. SoFi Parent Loans
If your child is a college student, you can borrow money to help offset their education costs with a SoFi Parent Loan.
With a SoFi loan, you can borrow up to the total cost of your child’s attendance. If you’ve exhausted other financial options, such as federal loans, a private parent loan can help fill the gap.
2. Parent PLUS Loan refinancing
If you took out a federal Parent PLUS Loan, you could face interest rates as high as 7.00%. If you’re struggling to afford your payments or you’re frustrated at how much you’re paying in interest, refinancing your loan can provide much-needed relief.
With Parent PLUS Loan refinancing at SoFi, you take out a new loan through the company and use it to pay off your federal loans. The new loan will have different repayment terms, including a new monthly payment, interest rate, and term length.
You can use refinancing to reduce your monthly payment or to decrease the amount you’ll pay in interest over the length of the loan.
6 advantages of SoFi student loans for parents
Whether you’re looking for a student loan to pay for school or want to refinance a current one, it’s wise to shop around and compare offers from different lenders. When looking at SoFi, it’s important to know that the company offers some unique advantages you might not find elsewhere.
1. Low interest rates
Depending on your credit score and income, you could qualify for a much lower rate with SoFi than you would with a federal student loan. SoFi student loans have fixed interest rates as low as 3.89% and variable rates as low as 2.50%.
Lower interest rates can result in significant savings. For example, if you had a $10,000 Parent PLUS Loan at 7.00% interest, you’d pay $3,933 in interest over 10 years of repayment. However, if you refinanced that loan and qualified for a 4.00% interest rate, you’d pay just $2,149. That’s nearly $1,800 in savings with just a few minutes of effort.
2. No origination or application fees
Although federal student loans, such as Parent PLUS Loans, offer useful benefits, there are some drawbacks. Namely, Parent PLUS Loans have an origination fee.
For borrowers who received their loans after October 2017, that fee is 4.264 percent of your loan amount. On a $10,000 loan, that means you’ll have to pay a fee of $426.40, adding to the cost of your child’s education.
SoFi Parent Loans don’t have origination or application fees, which can help you save even more.
3. Career support
When you take out a loan through SoFi, you get access to special member perks, including career support. You’ll get the chance to work one-on-one with a career coach, who can help you navigate the transition into a new field, update your resume, and build your personal brand.
4. Wealth advisors
As a parent, paying for college isn’t your only financial concern. You’re likely worried about other goals too, such as saving for retirement or buying a home.
SoFi offers personalized wealth management advice to its members. The advisors can help you with everything from identifying investments to defining your future plans.
5. Member discounts
Once you’re a SoFi member, you can also take advantage of special account discounts. If you have a SoFi parent student loan and go on to take out a personal loan, mortgage, or another student loan with the company, you’ll receive a 0.125 percent interest rate discount on the new debt.
6. Customer support
Your lender’s customer service can play a big role in your repayment strategy. Having informed, accessible representatives can make managing your loans much easier.
According to SoFi student loan reviews on the Better Business Bureau website, the company has an A-plus rating for transparency and responsiveness. In customers’ SoFi reviews, student loan borrowers report positive experiences applying for and receiving loans, citing quick and easy processes and response times.
Helping your child pay for school
With its unique perks and benefits, SoFi student loans for parents can be useful tools to pay for your child’s education. Used carefully, a private parent loan can help you save money over the long run.
For more information about ways you can help your child finance their education, check out this guide on student loan options for parents.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.24% – 13.24%1||Undergraduate and Graduate|
|4.07% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 11.35%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|6.08% – 7.22%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|