Best Parent Loans for College

Parents are always worried about their child’s education. Everyone wants their child to study well and get good education. But thing to remember is that parents should not drain their retirement accounts to pay their child’s university education and should make sure they have considered all their options and these includes federal and private student loans for parents.

Parents should know that both the federal government and several private lenders provide student loans to parents. Below we have mentioned 5 main choices for parent student loans.

  1. Parent PLUS loan
  2. Citizens Bank Student Loan for Parents
  3. College Ave Parent Loan
  4. Sallie Mae Parent Loan
  5. Education Loan Finance (ELFI) Parent Loan

 

  1. Parent PLUS loan

You can get it this federal loan from the department of Education

The interest rate is 7.08% (as of 1st July, 2019) and origination fee of 4.236% (1st October, 2019)

It is eligible for some federal repayment plans and forgiveness schemes

Parents with adverse credit should have an endorser when applying to this plan.

  1. Citizens Bank Student Loan for Parents

Parents can borrow this student loan from Citizens bank and it is available with both fixed 4.25%-11.95% and 1.21%-11.36% variable rates respectively.

If you sign up for autopay or you have a qualifying accounts then you will get rate discount of up to 0.50%

There are no origination fees or prepayment penalties

You will get ten years loan term here

It is easy to get loan amount from $1000 to $350,000 from them

Multi-year approval option, so that you can obtain funding for several years with one submission.

Here you get immediate repayment options

3. College Ave Parent Loan

Here the loan is set at fixed rate of 3.49%-12.99% and the variable rates are set between 1.24% – 11.98%.

If you enroll for autopay then you get rate discount of 0.25%

There is not any fee for origination or fines for prepayment

You get the option of student loan term from 5 years to 15 years

Loan amounts from $1,000 up to certified attendance costs.

It provides you the option to pay up to $2,500 directly to the parent for additional out of pocket expenses.

  1. College Ave Parent Loan Sallie Mae Parent Loan

Here the fixed rate is set at 4.25% to 12.35% whereas variable rates are set to 1.25% to 11.10%.

You will be rewarded with 0.25% discount if you enroll into autopay option

There are no origination fees or penalties for when you prepay Sallie Mae student loans

You will get 10 years repayment term for this loan.

Parents can get student loan amount from $1000 up to certified cost of attendance

Not only this loan is available for parents but to other student benefactors too

You will also get free quarterly FICO credit score updates with it

  1. Education Loan Finance (ELFI) Parent Loan

ELFI parent loan is available at fixed 2.79% to 5.99% and at variable rates of 2.39% to 6.01%.

There are not nay origination, application or prepayment fees

Here the loan amounts are available at $10,000

You get the repayment terms of 5 to ten years

Things to consider when choosing a parent loan

Parents can choose between both federal and private student loan.  Federal loans are a good choice for students but federal PLUS loan might not have any benefit over private parent loans.

As with any financial product, you may need to search around to find a good price on your parents’ student loans. Here are the main features we’ve been searching for when selecting our best parent loans for college.

Low student loan rates

When you are going to have a parent student loan, you need to choose the loan lender with least interest rate. Before you choose any please compare interest rates for both private and federal loans.

Low or no loan fees

Parent student loans may come with charges such as student loan origination fees. You need to compare between the low or no loan fees before you choose any lender.

Student loans designed for parents

Parents are allowed to co-sign student loans to their child. However, if you are searching for a loan that is not going to add to your children student debt, you need to search for a lender that give loan directly to parents.

Eligibility requirements you can meet

The very first thing that you need to consider to be eligible for a parent student loan is your creditworthiness.  To be eligible you need to have good credit score, representing a stable credit history and a low debt to income ratio. In case you are not qualified on your own then you have to apply for it with a cosigner.

Also, if you want to apply for parent PLUS loan then also you need to have a good credit as an average credit won’t make you eligible for it.