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Did you take out a Parent PLUS loan to help your child through college? If so, you'd probably love to find a way to make those payments more manageable.
Refinancing may be good option to allow to put your money toward your own financial priorities—finally.
Not sure if refinancing your Parent PLUS loan is right for you? Let's take a look at three situations when it's a good idea.
1. Your interest rate is high
2. You want to lower your monthly payments
If your monthly payment is too high compared to your income and you'd like to lower your monthly student loan financial commitment, you should consider refinancing. That's because most companies allow you to choose a repayment timeline that works for your individual needs. Stretching your repayment term means you'll have more time to pay and a lower monthly payment.
This will free up some cash in your monthly budget that you can put toward groceries, other bills, or a trip you're working toward, instead of your child's loans. One thing to consider when choosing a longer term for repayment is that you'll ultimately end up paying more in the long-run than with a shorter repayment term. However, if it's a smaller monthly payment you're after, this is a great option.
3. You want to pay off the loan faster
If you are itching to buy your dream vacation home or you're coming closer to retirement, chances are you're looking to pay off your debt — and fast. Refinancing lets you do exactly that. People who refinance their student loans often save over $16,000 over the life of the loan.
With a lower interest rate, more of your monthly payment will go toward your loan principal. Plus, many lenders will also allow you to opt for a shorter repayment term. In addition to refinancing, you can always pay more than your minimum payment due to speed up the process.
If you're interested in seeing just how much you can save through refinancing, check out our Student Loan Refinancing Calculator for an estimate.
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