Private Student Loans for Parents: Comparing 4 Options

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If you’re trying to navigate student loans for parents to help your child pay for college, you might be in for a rude awakening.

The cost of college has skyrocketed. Tuition for in-state students at a four-year public college costs an average of $10,230, but that jumps to $26,290 for out-of-state students.

If you need to borrow money to pay for your kid’s college, a parent PLUS loan can be a great option. With the ability to consolidate your loans to get access to income-driven repayment plans and Public Service Loan Forgiveness, you’ll have a lot of flexibility.

But some private parent student loan companies offer lower interest rates than those you’ll find for parent PLUS loans. Plus, you might be able to escape the latter’s 4.248% origination fee (it drops to 4.236% for loans disbursed on or after October 1).

We’ll take a look at some private student loan companies that have offerings for parents.

1. SoFi parent loan
2. College Ave parent loan
3. Sallie Mae Parent Loan
4. Citizens Bank parent loan

4 of our favorite student loan companies for parents

As you compare the following private student loans for parents, consider the interest rates, fees and other terms and features to determine which option is best for you.

Keep in mind: A search for the best private student loans for bad credit will typically prove futile. You most likely need a decent credit score or a cosigner to qualify.

Lender Variable APRs Fixed APRs Repayment Terms Notes
SoFi 2.99%– 5.82% 3.20%– 5.82% 5-15 years Allows interest-only payments while your child is in school
College Ave 1.24%– 11.96% 3.99% – 12.97% 5-15 years Allows up to $2,500 of loan to cover other educational expenses
Sallie Mae 3.50% – 10.12% 5.49% – 12.87% 10 years Doesn’t allow you to prequalify with a soft credit check
Citizens Bank 2.49% – 6.08% 3.20% – 6.33% 5 or 10 years Offers an extra 0.25 percentage point interest rate reduction if you have an eligible Citizens Bank account

1. SoFi parent loan

SoFi is one of the largest student loan refinancing companies in the industry, but it also offers private student loans.

Interest rates and fees

You can choose between a variable and fixed APR:

  • Variable: 2.99%– 5.82%
  • Fixed: 3.20%– 5.82%

These rates include a 0.25% reduction, which you qualify for when you set up autopay. Also, you can get an idea of what kind of rate you’d qualify for without a hard credit check, so your credit score won’t be affected.

SoFi doesn’t charge application or origination fees, and there are no prepayment penalties.

Other terms and features

You can borrow as little as $5,000 (the minimum may be higher in some states) or enough to cover the cost of attendance for your child. Parents can make interest-only payments while their child is still in school.

You can choose a repayment term of five, 10 or 15 years.

2. College Ave parent loan

If you want a little more flexibility with your payments, College Ave offers three repayment plans from which you can choose:

  • Interest-only payment: Pay just the interest charges while your child is in school
  • Interest-plus payment: Pay enough to cover the interest charges, and then you can set your own monthly payment (in $20 increments)
  • Full principal and interest payment: Start making full payments right away

Interest rates and fees

Although they aren’t as low as SoFi’s rates, College Ave’s APRs are competitive. You can choose between a variable and fixed APR:

  • Variable: 1.24%– 11.96%
  • Fixed: 3.99% – 12.97%

These rates include a 0.25% interest rate reduction for setting up autopay. You can get prequalified for an interest rate through College Ave’s website with a soft credit check.

There are no application or origination fees or prepayment penalties.

Other terms and features

College Ave parent loans start at $1,000 and can cover up to 100% of the school’s cost of attendance. It also can send you up to $2,500 directly to cover other educational expenses, such as books and electronics.

You can choose from 11 repayment terms between five and 15 years. This allows you more flexibility than what many student loan companies offer.

However, if you can qualify for a lower interest rate elsewhere, it might be worth giving up some repayment flexibility.

3. Sallie Mae Parent Loan

Just like College Ave, Sallie Mae offers loans for parents as low as $1,000 and up to your child’s school-certified cost of attendance. Sallie Mae allows you to choose between an interest-only payment while your child is in school or a full payment from the get-go.

Interest rates and fees

Sallie Mae offers both variable and fixed APRs. You might qualify for a rate within the following ranges:

  • Variable: 3.50% – 10.12%
  • Fixed: 5.49% – 12.87%

The lender offers a 0.25 percentage point interest rate reduction when you set up autopay. Like the other lenders listed, Sallie Mae doesn’t charge an application or origination fee and won’t penalize you for paying off your loan early.

Other terms and features

One drawback to the Sallie Mae Parent Loan is that it doesn’t allow you to prequalify with a soft credit check. That means you have to apply to see if you’re approved and find out the rate for which you could qualify. If you’re concerned about inquiries on your credit report, Sallie Mae might not be a great fit.

You also have only one choice for your repayment period: 10 years. Of course, you can pay off the loan earlier if you wish, but you have less flexibility when determining your monthly payment.

4. Citizens Bank parent loan

If you’re already a Citizens Bank customer, applying for its student loan for parents could score you a lower interest rate.

Besides its 0.25 percentage point interest rate reduction for signing up for autopay, the bank offers an extra 0.25 percentage point discount if you have a qualifying account when you apply for the loan.

Interest rates and fees

  • Variable: 2.49% – 6.08%
  • Fixed: 3.20% – 6.33%

Citizens Bank’s rates include the 0.50 percentage point reduction for the loyalty and autopay discounts.

The bank doesn’t charge application or origination fees, and there are no prepayment penalties.

Other terms and features

You can choose a five- or 10-year repayment plan. You can pay interest only while your child is in school or start making full payments immediately.

Also, like Sallie Mae, Citizens Bank doesn’t allow you to see your potential offer until you officially apply. That can make it harder to shop around.

Which private student loans for parents are best?

When looking at private student loan companies that offer parent loans, there’s no one best lender. Each lender has different features and criteria for determining your loan terms. While one might offer lower interest rates, that doesn’t mean you’ll qualify.

To make sure you get a great deal on your parent loans for college, shop around and compare different companies and what they have to offer. For companies that offer prequalification, get an idea of the interest rates for which you’d qualify. As you do this with several companies, you’ll have a better idea of which loan is a good fit for you.

Sarah Li Cain contributed to this report

Need a student loan?

Here are our top student loan lenders of 2020!
LenderVariable APREligibility 
1.25% – 9.44%*,1Undergraduate and Graduate

Visit SallieMae

1.24% – 11.98%2Undergraduate, Graduate, and Parents

Visit College Ave

1.24% – 11.44%3Undergraduate, Graduate, and Parents

Visit Earnest

1.24% – 11.37%4Undergraduate and Graduate

Visit Discover

1.30% – 10.00%5Undergraduate and Graduate

Visit SoFi

2.73% – 13.01%6Undergraduate and Graduate

Visit Ascent

3.52% – 9.50%7Undergraduate and Graduate

Visit CommonBond

* 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.


1 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

2 Important Disclosures for College Ave.

CollegeAve Disclosures

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.

  1. Rates shown are for the College Ave Undergraduate Loan product and include autopay 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.
     
  2. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 7/1/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.


3 Important Disclosures for Earnest.

Earnest Disclosures

  1. Rates include 0.25% Auto Pay Discount
     
  2. Explanation of Rates “With Autopay” (APD)
    Rates shown include 0.25% APR discount when client agrees to make monthly principal and interest payments by automatic electronic payment. Use of autopay is not required to receive an Earnest loan.

    Available Terms
    For Cosigned loans – 5, 7, 10, 12, 15 years. 
    Primary Only – 10, 12, 15 years

    In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).


4 Important Disclosures for Discover.

Discover Disclosures

  1. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Auto Reward Debit Reward Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.
  3. Aggregate loan limits apply.
  4. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for the Discover Private Consolidation Loan and include an Auto Debit Reward. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.375% as of July 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.
  5. Get a variable interest rate from 2.37% APR to 6.14% APR (3-Month LIBOR + 2.00% to 3-Month LIBOR + 5.77%) for either a 10-year or 20-year repayment term. Or lock in a fixed interest rate from 3.99% APR to 7.49% APR for a 10-year repayment term or from 4.24% APR to 7.74% APR for a 20-year repayment term. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 0.375% as of July 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

5 Important Disclosures for SoFi.

sofiDisclosures

*UNDERGRADUATE LOANS: Fixed rates from 4.73% to 11.46% annual percentage rate (“APR”) (with autopay), variable rates from 1.30% to 10.00% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.51% to 11.76% APR (with autopay), variable rates from 1.08% to 10.30% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.41% to 11.67% APR (with autopay), variable rates from 0.98% to 10.21% APR (with autopay). PARENT LOANS: Fixed rates from 4.73% to 11.46% APR (with autopay), variable rates from 1.30% to 9.88% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 6/29/20. Enrolling in autopay is not required to receive a loan from SoFiSoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).


6 Important Disclosures for Ascent.

Ascent Disclosures

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.

  1. Competitive variable rates calculated monthly at the time of loan approval based on a margin plus the 1-Month London Interbank Offered Rate (LIBOR) rounded to the nearest 1/100th of a percent. The current LIBOR is 0.190%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes. Rates are effective as of 07/07/2020 and reflect an Automatic Payment Discount. Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month.(See Automatic Payment Discount Terms & Conditions.)
    1. Undergraduate Loans: Variable rate loans have an Annual Percentage (APR) range between 2.73% – 13.01%. Fixed rate loans have an APR range between 3.62% and 14.50% based on your credit worthiness and your selected program. Rates reflect an Automatic Payment Discount of 0.25% (for Credit-Based Loans) on the lowest offered rate and a 2.00% (for Undergraduate Future Income-Based Loans ) discount on the highest offered rate. (See Undergraduate Loan repayment examples.)
    2. Graduate Loans: Variable rate loans have an APR range between 5.33% and 11.42%. Fixed rate loans have an APR range between 6.14% and 11.92% based on your credit worthiness and your selected program. Rates reflect an Automatic Payment Discount of 0.25%. (See Graduate Loan repayment examples.)
  2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
  3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment. (See Undergraduate Loan repayment examples.)
  4. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000.
  5. Interest rate reduction of either 0.25% (for Credit-Based Loans) or 2.00% (for Undergraduate Future Income-Based Loans) applies only when the borrower and/or cosigner sign up for automatic payments and the payment amount is successfully deducted from the designated bank account each month. The amount of the discount is dependent upon the loan product and credit history of the borrower at the time of application. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of in-school, deferment, grace or forbearance, unless a regular payment amount has been arranged with the servicer. If you have two (2) consecutive returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the interest rate reduction.(See Automatic Payment Discount Terms & Conditions.)
  6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
  7. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
  8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
  9. 1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
    • The student borrower has graduated from the degree program that the loan was used to fund.
    • The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
    • The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
    • Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
  10. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.

* Application times vary depending on the applicant’s ability to supply the necessary information for submission.


7 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).

  1.  Rates are as of July 1, 2019 and include auto-pay discount. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment. Variable rates may increase after consummation.

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.