Best Parent Loans For College

As college tuition skyrockets, more parents are stepping in to help foot the bill. But with so many loan options out there, choosing the best one can feel like finding a needle in a haystack. Whether you’re looking for low-interest rates, flexible repayment plans, or no hidden fees, we’ve got the scoop on some of the best parent loans for college. Grab a cup of coffee, and let’s navigate the world of parent loans together.

If you end up deciding a parent loan for college is not what you need, MoneyLion can still help. Keep reading to the end to see how you can get personalized loan offers from our trusted partners through MoneyLion! 

8 Best parent loans for college

Finding the right loan can make all the difference in managing college expenses. Here are some of the top parent loans available to help you make an informed decision.

1. Federal direct PLUS loans / Parent PLUS loans

The Federal Direct PLUS Loan, also known as the Parent PLUS Loan, is a federal loan offered to parents of dependent undergraduate students. It allows parents to borrow up to the full cost of attendance, minus any other financial aid received. This loan is popular for its flexible repayment options and fixed interest rate, making it a reliable choice for many families.

• Minimum credit score: No specific minimum, but credit check required
• Fixed APR: 9.08%
• Variable APR: N/A

Pros: • Borrow up to the full cost of attendance • Multiple repayment options • Fixed interest rate

Cons: • Origination fee • No grace period • Credit check required

2. Sofi® Parent Loan

SoFi is a well-known online lender that offers private parent loans with competitive rates and benefits like unemployment protection. SoFi’s parent loan is designed to help parents finance their child’s education with no origination fees and the option to choose between fixed and variable rates.

• Minimum credit score: 680
• Fixed APR: 6.25% – 14.83%
• Variable APR: 6.07% – 15.86%

Pros: • No origination fees • Unemployment protection • Competitive interest rates

Cons: • High minimum credit score requirement • No deferment options • Limited to online management

3. College Ave Parent Student Loan 

College Ave offers a range of student loan products, including parent loans. Their parent loan product is known for its flexible repayment options and quick approval process, making it a convenient choice for parents who need funds fast.

• Minimum credit score: 640
• Fixed APR: 3.87% – 7.99%
• Variable APR: 5.59% – 17.99%

Pros: • Flexible repayment terms • Quick approval process • No prepayment penalties

Cons: • Limited customer service availability • May require a co-signer • No fixed rate option for some terms

4. Citizens Bank Parent Loan

Citizens Bank offers a parent loan with competitive fixed and variable rates. The bank is known for its strong customer service and offers a loyalty discount for existing customers, making it a popular choice for parents looking for personalized service.

• Minimum credit score: 680
• Fixed APR: 5.99% – 10.60%
• Variable APR: 7.01% – 10.62%

Pros: • Loyalty discount for existing customers • Flexible repayment options • No application or origination fees

Cons: • No autopay discount • Limited to U.S. citizens and permanent residents • Requires a hard credit check

5. Rhode Island Student Loan Authority (RISLA) Private Student Loan

RISLA offers a private parent loan with a focus on affordability and borrower protection. It provides fixed-rate loans and includes benefits like income-based repayment plans and interest rate reductions for automatic payments.

• Minimum credit score: N/A
• Fixed APR: Starts at 4.05%
• Variable APR: N/A

Pros: • Income-based repayment options • Interest rate reductions for autopay • Fixed interest rates

Cons: • Limited to Rhode Island residents or students attending Rhode Island schools • No variable rate option • Limited online account management

6. INvestED Student Loan

INvestED offers a variety of student loan products, including parent loans. The organization provides competitive interest rates and various repayment options, making it a flexible choice for parents.

• Minimum credit score: 670
• Fixed APR: 4.38% – 8.23%
• Variable APR: 3.45% – 7.21% 

Pros: • Flexible repayment terms • Competitive rates • Educational resources and financial literacy tools

Cons: • Requires a creditworthy co-signer in some cases • Limited deferment options • Higher rates for lower credit scores

7. Advantage Education Loan Parent Loan 

Advantage Education Loan offers a parent loan with no origination fees and competitive interest rates. This loan is a good option for parents who want to borrow up to the full cost of attendance without hidden costs.

• Minimum credit score: 670
• Fixed APR: Starts at 4.38% 
• Variable APR: N/A

Pros: • No origination fees • Borrow up to the full cost of attendance • Fixed interest rates

Cons: • No variable rate option • Requires strong credit for the best rates • Limited to residents of certain states

8. ISL Private Student Loan

The ISL Private Student Loan offers parent loans with competitive fixed and variable rates. It includes options for interest-only payments during school and various repayment terms to suit different financial needs.

• Minimum credit score: 650
• Fixed APR: 3.70% – 8.75%
• Variable APR: N/A

Pros: • Interest-only payment options • Competitive rates • Multiple repayment terms

Cons: • Requires a co-signer for some borrowers • No deferment options • Limited availability

How to choose the best parent loan for college

When selecting the best parent loan for college, it’s crucial to consider several factors. 

• Interest rates: A primary concern, as they determine the total cost of the loan over time. Look for the lowest possible rates, whether fixed or variable. 
• Repayment terms: Vital, as they affect your monthly payments and the loan’s overall affordability. Some loans offer flexible terms, including income-driven repayment options. 
• Fees and additional costs: Can also add up, so be sure to check for origination fees, prepayment penalties, and any other hidden charges.
• Lender’s reputation and customer service: A reputable lender with strong customer support can make the borrowing experience much smoother.

Types of parent student loans

When it comes to financing your child’s college education, there are two main types of parent student loans to consider: Federal Direct PLUS Loans (commonly known as Parent PLUS Loans) and private student loans. Understanding the differences between these options can help you choose the best fit for your financial situation and needs.

Federal direct PLUS loans / Parent PLUS loans

Federal Direct PLUS Loans, also known as Parent PLUS Loans, are federal loans provided by the U.S. Department of Education. They are specifically designed for parents of dependent undergraduate students to help cover the cost of education not met by other financial aid. Parents must undergo a credit check to apply, but there is no specific minimum credit score requirement. 

These loans offer a fixed interest rate, which remains the same throughout the life of the loan, providing predictable monthly payments. Repayment begins immediately after the loan is fully disbursed. However, parents can request a deferment while the student is enrolled at least half-time and for an additional six months after the student graduates or drops below half-time enrollment. 

Parent PLUS Loans also offer flexible repayment options, including income-contingent repayment plans, making them a versatile option for managing the financial burden of college expenses.

Private student loans

Private lenders, such as banks, credit unions, and online lenders, offer private student loans. Unlike Parent PLUS Loans, the federal government does not back these loans, and the terms can vary widely depending on the lender. Similar to federal loans, private student loans for parents can be used to cover the full cost of attendance. 

They often require a strong credit score and may offer fixed and variable interest rates. The application process typically involves a credit check and may require proof of income and a co-signer if the borrower does not meet the credit criteria. Repayment terms for private student loans can be more rigid, with fewer deferment options or forbearance options than federal loans. 

They may offer lower interest rates for creditworthy borrowers, potentially resulting in significant savings over the life of the loan. Private loans also allow parents to customize repayment terms, with some lenders offering interest-only payments while the student is in school.

---

If you’d rather have more flexibility with how you use your loan, a personal loan may be the best option for you! MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

---

How to get a parent loan for college

Here’s how to navigate the application process for parent PLUS and private student loans.

For a Parent PLUS Loan

To apply for a Parent PLUS Loan, the parent must complete the application on the Federal Student Aid website. Eligibility requires a credit check, but no minimum credit score is specified. The parent must be a U.S. citizen or eligible non-citizen, and the student must be enrolled at least half-time in an eligible program. After approval, the loan funds are disbursed directly to the school, and any remaining balance is refunded to the parent or student.

For a Private student loan

Applying for a private student loan involves selecting a lender and completing an online application. Eligibility requirements vary by lender but generally include a credit check and proof of income. Some lenders may also require a co-signer, especially for borrowers with limited credit history. Once approved, the loan amount is typically sent directly to the school, covering tuition and other expenses.

Who pays for a parent loan for college?

Parent loans, whether federal or private, are typically the responsibility of the parent borrower. For Parent PLUS Loans, repayment begins after the loan is fully disbursed, with options to defer payments while the student is in school. For private loans, repayment terms vary but generally require the parent to start paying shortly after disbursement. The responsibility for these loans rests solely with the parent unless they negotiate repayment arrangements with their child.

Navigating parent loans

Choosing the right parent loan for college involves considering various factors, including interest rates, repayment terms, and lender reputation. Federal Direct PLUS Loans offer fixed rates and flexible repayment options, making them a popular choice. Private loans can provide competitive rates and tailored terms for creditworthy borrowers. By carefully evaluating your options and understanding the terms, you can make an informed decision that best suits your family’s financial situation.

FAQ