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To help finance their kid's way through college, many parents take on debt in the form of high-interest Parent PLUS loans issued by the federal government.
Parent PLUS loans are a type of student loan taken out in the name of a parent who holds full responsibility for payment of the loan(s).
One way to pay off a Parent PLUS loan faster than the standard 10-year repayment term is to refinance through a private lender. If you qualify, refinancing can help you get a lower interest rate so you can chip away at the debt more quickly while saving money on interest over the long term.
Another perk for parents who are looking to hand off financial responsibility to their adult children: Refinancing is the only way to transfer Parent PLUS loans into your child's name. While you can refinance Parent PLUS loans in your name, you can also choose to have your child take over the loan repayment by refinancing it in their name.
There's one big caveat: Parent PLUS loans are a type of federal loan that qualifies for the current federal student loan payment and interest freeze. We do not recommend that you consider refinancing your Parent PLUS loans until the forbearance ends on Sept. 30, 2021.
Unfortunately, not all private lenders allow Parent PLUS loan refinancing — Education Loan Finance Student Loan Refinancing does. Borrowers can refinance their Parent PLUS loans, and even combine them with their private student loans. For this reason, Select ranked Education Loan Finance (ELFI) on our list of the top student loan refinance companies.
Read on for the full details of ELFI's Student Loan Refinancing, including the APRs, perks, fees, loan amounts and term lengths. (See our methodology for more information on how we choose the best student loan refinance companies.)
No origination fees to refinance
Federal, private, graduate and undergraduate loans, Parent PLUS loans
Variable and fixed
Variable rates (APR)
From 2.39% (rates include an autopay discount)
Fixed rates (APR)
From 2.79% (rates include an autopay discount)
From 5 to 20 years for student loan refinancing; 5, 7 or 10 years for parent loan refinancing
Minimum credit score
Allow for a co-signer
ELFI offers both variable and fixed APRs. Variable interest rates fluctuate over the life of the loan, while fixed rates stay the same for the duration of the loan term.
ELFI's variable rates start at 2.39%. Fixed rates start at 2.79%. Both variable and fixed APRs automatically include a 0.25% autopay discount.
Since not all refinancing lenders allow borrowers to refinance their Parent PLUS loans, being able to do so through ELFI is a big perk. Plus, borrowers can combine their Parent PLUS loans with any other private student loans they co-signed, so that all the debt is consolidated into one loan. This streamlines your monthly payments — ideally at a much lower interest rate.
The ELFI website claims that customers report saving an average of $272 every month and could see an average of $13,940 in total savings.
There are also a couple bonuses available to borrowers, including $25 in their PayPal account when they refinance using their PayPal login and a $400 referral bonus program. And borrowers are assigned a personal loan advisor to guide them through the refinancing process.
ELFI offers payment protections for borrowers, like deferment where they align their repayment start date to the expiration of the grace period on the federal student loans that they are refinancing, as well as financial hardship or medical difficulty forbearance for up to 12 months.
ELFI does not charge borrowers any origination fees to take out a refinancing loan, nor an application/loan guarantee fee.
There are no early payoff penalties, but there is a late charge fee that is 5% of the past due amount or $50 (whichever is less). A returned check or insufficient fund charge is $30.
There is a loan size minimum of $15,000 and no maximum.
Borrowers have flexibility, with loan terms ranging between 5 to 20 years for student loan refinancing and 5, 7 or 10 years for Parent PLUS loan refinancing.
Education Loan Finance Student Loan Refinancing is the best option for those with Parent PLUS loans who could benefit from refinancing, whether it's to score a lower interest rate or to transfer the loan into their child's name. If you have co-signed on private student loans, you can combine and refinance all the debt together into one new loan.
For those without Parent PLUS loans looking to refinance their private loans, consider Select's other top-rated refinancing lenders:
- Best overall: SoFi Student Loan Refinancing
- Best for having a co-signer: CommonBond Student Loan Refinancing
- Best for fair credit score: Earnest Student Loan Refinancing
- Best for medical school loan refinancing: Laurel Road Student Loan Refinancing
At this time, we don't recommend refinancing federal loans while the Covid forbearance period is in effect through Sept. 30, 2021.
To determine which student loan refinance companies are the best for borrowers, Select analyzed and compared private student loan funding from national banks, credit unions and online lenders. We narrowed down our ranking by only considering those that offer low student loan refinancing rates and prequalification tools that don't hurt your credit.
While the companies we chose in this article consistently rank as having some of the more competitive interest rates for refinancing, we also compared each company on the following features:
- Broad availability: All of the companies on our list refinance both federal and private student loans, and they each offer a variable and fixed interest rate to choose from.
- Flexible loan terms: Each company provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your student loan.
- No origination or signup fee: None of the companies on our list charge borrowers an upfront "origination fee" for refinancing your loan.
- No early payoff penalties: The companies on our list do not charge borrowers for paying off loans early.
- Streamlined application process: We made sure companies offered a fast online application process.
- Co-signer options: Each company on our list allows for a co-signer if the direct borrower does not qualify for refinancing on their own.
- Autopay discounts: All of the companies listed already calculate autopay discounts into their advertised rates.
- Private student loan protections: Though you lose federal student loan benefits when you refinance, each company on our list offers some type of their own financial hardship protection for borrowers.
- Loan sizes: The above companies refinance loans in an array of sizes, from $5,000 to $500,000. Each company advertises its respective loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be.
- Credit requirements/eligibility: We took into consideration the minimum credit scores and income levels required if this information was available.
- Customer support: Every company on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the student loan refinancing process.
After reviewing the above features, we sorted our recommendations by best for overall refinancing needs, having a co-signer, applying with a fair credit score, refinancing parent loans and medical school loans.
Note that the rates and fee structures for private student loan refinancing are not guaranteed forever; they are subject to change without notice and they often fluctuate in accordance with the Fed rate. Choosing a fixed-rate APR when you refinance will guarantee that your interest rate and monthly payment will remain consistent throughout the entire term of the loan.
Your refinanced rate depends on your credit score, income, debt-to-income (DTI) ratio, savings, payment history and overall financial health. To refinance your student loan(s), lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
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