SoFi Parent Loans Review: Pay for College Without Pricey PLUS Loans

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SoFi parent loans allow you to borrow up to the full cost of attendance of your child’s school to help them pay for college. And while you may enjoy SoFi benefits such as unemployment protection and competitive interest rates, it’s still worth comparing your options for parent student loans before you borrow.

This SoFi review will take a closer look at the pros and cons of SoFi parent loans, so you can decide if they’re the right option for you and your family.

SoFi parent loans review

SoFi offers a wide range of lending products, from student loan refinancing to mortgages, personal loans and more.

SoFi parent loans are offered to parents, legal guardians of current students or any creditworthy adult willing to borrow on a student’s behalf.

Here are the details:

Pros of SoFi parent loans

SoFi parent loans have several benefits that make them a smart alternative to other parent student loan options. Here are some pros of SoFi parent loans:

  • Low interest rates: For well-qualified borrowers, SoFi parent loans could come with interest rates below the 5.30% charged on federal parent PLUS loans for the 2020-21 school year. Plus, SoFi offers a 0.25% rate discount for enrolling in autopay.
  • No fees: SoFi parent loans don’t have application fees, loan origination fees or prepayment penalties. Parent PLUS loans, on the other hand, charge a one-time loan fee of 4.228% (as of Feb. 8, 2021).
  • Loans owned by parents: Since SoFi parent loans are taken out by you as the legal guardian or otherwise creditworthy adult, you can rest assured they won’t add to your student’s debt — unlike cosigning a student loan.
  • Borrower protections and benefits: Parent loan borrowers can enjoy some unique SoFi benefits, including unemployment protection to pause student loan payments after job loss and career counseling.

Cons of SoFi parent loans

Here are a few drawbacks to watch out for when evaluating SoFi student loans for parents:

  • No option for full deferment: While you can defer repayment on a federal parent PLUS loan while your child is in school, SoFi doesn’t offer the option to defer payments However, you can opt to make interest-only payments while your child is in school and for six months after they graduate or drop below half-time enrollment. Whether you choose interest-only repayment or full repayment, your bills will begin within 30 to 45 days after the loan disburses.
  • Loan can’t be transferred to the student: Parents should choose a SoFi student loan only if they plan to repay the debt themselves — there’s no option to transfer SoFi parent loans to the student’s name.
  • No access to certain federal programs: A federal parent PLUS loan makes you eligible for income-driven repayment and some forgiveness options that you won’t qualify for with a loan from SoFi or other private lenders.

SoFi student loan interest rates and fees

SoFi student loan rates are competitive. However, the exact rates you’re offered will depend on a few things:

  • Your creditworthiness: The lowest SoFi student loan rates will go to applicants with excellent credit histories.
  • Your loan repayment terms: SoFi offers repayment terms of five, 10 or 15 years, with lower rates typically offered on five-year student loans. Additionally, you’ll get 0.25% knocked off your rate after setting up autopay for your SoFi parent loans.
  • The type of rate you choose: Parents can choose variable or fixed interest rates for their SoFi student loans. Variable rates are lower initially, but might rise over time. Fixed rates, meanwhile, are initially higher, but don’t carry the risk of increasing.

Student loan rates start at 1.87% for five-year, variable-rate SoFi parent loans, including the autopay rate discount.

For well-qualified parents, SoFi student loans can be a more affordable way to borrow, especially compared to federal student loans for parents. To see these savings in action, check out our cost comparison of fixed-rate SoFi parent loans and parent PLUS loans:

SoFi Parent loans Parent PLUS loans
Eligibility requirements Your child is enrolled full time in college; you’re a U.S. citizen or permanent resident Your child is enrolled at least half time in college; you’re a U.S. citizen or eligible noncitizen
Application process Apply for an instant rate quote with a preapproval application (soft credit pull); submit full application when you choose a loan (hard credit pull) Submit the FAFSA; work with your college financial aid office to request a parent PLUS loan
Credit requirements SoFi considers your credit score, debt-to-income ratio, income, career, education and other factors. Another parent or guardian can cosign You can’t have an adverse credit history. If you do, you can apply with an endorser who has strong credit
Borrowing limits $5,000 minimum, up to the total cost of attendance Up to the total cost of attendance, minus any other financial aid received
Rates/APRs Fixed APRs at 2.74%; variable APRs at 2.25% Fixed interest rate of 5.3% for the 2020-21 school year
Origination fees None 4.228% for loans originated on or after Oct. 1, 2020 and before Oct. 1, 2021
When repayment begins Immediate repayment Immediate repayment, unless you request a deferment while your child is in school and for up to six months after they graduate
Repayment options 5-, 10- or 15-year terms Standard Repayment Plan (10 years); Graduated Repayment Plan (10 years); Extended Repayment Plan (25 years); Income-Contingent Repayment, if you consolidate first (25 years)

 

How to apply for SoFi parent loans

Of course, your actual savings and costs will depend on your credit and the SoFi student loan terms you choose. SoFi offers rate quotes using a soft credit check to give you an accurate, personalized rate estimate — without affecting your credit score.

To request a rate on a SoFi student loan, you can visit the SoFi parent loans page and click “Get started.” This will take you to a sign-up screen that prompts you to create a SoFi account. From there, the lender will ask for additional details that it’ll need to provide you with a customized rate estimate, such as your name, employment information and housing status.

To boost your chances of approval or your likelihood of getting a low rate, you can apply for a SoFi parent loan with a well-qualified cosigner.

When you take out parent student loans, however, remember that this debt will affect your (and your cosigner’s) finances for years to come. It’s wise to take SoFi parent loan reviews, even those from happy customers, at face value.

Ensure that you’ve compared SoFi student loans for parents with similar products from other lenders to choose the product that gives you the most benefits. See how SoFi stacks up with other great options for parent loans for college currently on the market.

Rebecca Safier and Andrew Pentis contributed to this report.

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