Best Private Student Loans for Parents

When private parent student loans can be a good option

Private parent student loans come from financial institutions such as banks or credit unions and typically have less flexible repayment terms than federal loans.

Private parent loans can be a good choice if:

• You have strong credit (690+ score) or a qualified cosigner.
• You have maximized federal student loans and other financial aid.
• Your FAFSA has already been completed.
• You have income or financial stability to confidently repay the loans.
• Your child is pursuing a degree likely to lead to immediate employment after graduation.

Due to repayment obligations, private loans are best suited for graduate or professional programs such as law or medicine, or when all other funding options have been exhausted.

How interest rates compare to federal Direct PLUS loans

Federal Direct PLUS Loans have a fixed interest rate (8.94% for July 1, 2025 – July 1, 2026 school year). Private loans can offer lower rates depending on your creditworthiness and the presence of a cosigner, so it's important to compare multiple lenders to find the best option.

How do you qualify for a private student loan?

Qualification criteria vary by lender but typically include strong credit, stable income, and an acceptable debt-to-income ratio. Many lenders may also require or strongly recommend having a cosigner with good credit.

Can you get a private student loan with bad credit?

Obtaining a private loan with poor credit is challenging and usually requires a creditworthy cosigner. Those with bad credit should explore federal loans or other financial aid options first.

How do you apply for a private student loan?

Lender application processes vary but generally involve completing an online application, credit checks, and providing documentation. Approval can take from a few days to a few weeks. Compare lenders carefully for the lowest rates and best terms before applying.

Steps to apply:

1. Research lenders to find the best rates and terms.
2. Gather required documents (proof of income, employment, credit info) and submit your application online.
3. Await lender review and provide any additional requested documentation.
4. Upon approval, review and sign the loan agreement electronically, and coordinate fund disbursement with the school.

Can a parent PLUS loan or private parent student loan be transferred to the child/student?

Neither federal Parent PLUS nor private parent student loans can betransferred directly to the child. However, refinancing the loan in the child's name through a private lender may effectively transfer repayment responsibility to the student, subject to lender approval based on the student's creditworthiness and income.