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. According to the company, borrowers can save $3,637 over the life of the loan compared to a federal Parent PLUS Loan, on average.
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 3.40% and variable rates as low as 2.63%.
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 with SoFi 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 2018!
1 = Citizens Disclaimer.
2 = CollegeAve Autopay Disclaimer: All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
* 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.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
|3.54% – 12.07%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.95% – 12.10%||Undergraduate and Graduate||Visit Ascent|
|4.00% – 11.85%*3||Undergraduate and Graduate||Visit SallieMae|
|3.94% – 12.19%1||Undergraduate, Graduate, and Parents||Visit Citizens|
|4.63% – 9.71%||Undergraduate and Graduate||Visit LendKey|
|3.62% – 9.79%||Undergraduate, Graduate, and Parents||Visit CommonBond|