The Best Option for Married Couples Who Both Have Student Loan Debt

Ben Luthi

It’s not uncommon for couples to combine some or all of their finances after they get married.

Almost two-thirds of spouses merge their financial accounts, according to a survey by Magnify Money.

But in a lot of cases, your debt is your own, including your student loan debt. Fortunately, combining student loans with a spouse is possible with a unique loan refinance option, and there are some good reasons to consider it.

Of course, there are also potential pitfalls to understand before you move forward. Here’s everything you need to know.

Why refinance student loans

Consolidating student loans with a spouse will require you to refinance your loans together into one new one. But beyond the ability to combine your debts, why refinance student loans? Here are some other benefits:

  • Save money on interest: It’s possible to get an interest rate that’s lower than what you’re currently paying on your student loans. Depending on how low of a rate you can qualify for, you could save hundreds or even thousands of dollars.
  • Reduce your monthly payment: If you qualify for a lower interest rate, you’ll also stand to get a lower monthly payment, which can make your student loan repayment more affordable.
  • Get extra payment flexibility: Student loan refinance lenders offer a range of repayment terms, typically from five to 20 years. So if you want to pay off your debt more quickly, you can opt for a shorter term and a higher monthly payment. Alternatively, if you’re struggling to keep up with payments, you can request a longer term and score a lower payment.

Of course, there are some potential drawbacks to refinancing, too, especially if you have federal student loans.

For starters, not everyone qualifies for student loan refinancing — the average borrower has a high credit score and high income. And if you have federal student debt, consolidating student loans with a spouse through a private lender will cause you to lose access to certain benefits. That includes loan forgiveness programs, income-driven repayment plans and generous forbearance and deferment options.

But if you’re confident in your eligibility and don’t plan on using federal loan benefits, refinancing can be an excellent way to achieve your goals with your student loan debt.

Why consolidating student loans with a spouse can be helpful

Combining student loans with a spouse can provide some significant benefits to both of you, and if you’re considering it, PenFed Credit Union’s Spouse Loan is a unique way to make that happen.

Here are some of the benefits of spouse student loan consolidation:

  • Combine loan payments: The fewer monthly payments you need to keep track of, the easier it will be to manage your money. Regardless of how many different student loan payments you’re both making, the Spouse Loan gives you a single monthly payment between the two of you.
  • Enjoy the benefits of one spouse’s eligibility: For whatever reason, one spouse may have a higher income or a better credit score than the other. This can make it challenging for one spouse to qualify for student loan refinancing on their own. When consolidating student loans with a spouse, though, PenFed Credit Union will take the higher income and credit score when determining whether you meet the criteria. The same goes if one spouse has a higher degree than the other.

Of course, combining student loans with a spouse can make it difficult to separate that debt again if you were to divorce in the future. But if that’s not a concern, both you and your partner can take advantage of the benefits the Spouse Loan provides that you can’t get anywhere else.

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When a spouse student loan consolidation makes the most sense

Every situation is different, so it’s important to consider yours when deciding if a Spouse Loan is right for you. Here are some situations where it can be the right move for you and your spouse:

  • One spouse has a higher credit score than the other
  • One spouse has no income or a low income
  • One spouse has more debt, making their debt-to-income ratio too high to qualify
  • One spouse obtained a higher degree in college
  • You have a large number of loans and want to simplify your repayment plan
  • You have private student loans or federal loans but don’t need access to federal benefits

If any of these apply to you, consolidating your student loans with your spouse may be a good idea.

How to compare student loan refinance rates and options

PenFed Credit Union is the only lender that offers spouse student loan consolidation, but it’s still important to shop around and review interest rates and other features across multiple lenders. That way, you can make sure you and your spouse are getting the best deal available.

While that may mean that you don’t end up with a single loan between the both of you, one spouse may be able to cosign the other’s student loan refinance application with a different lender, which can provide some of the same benefits as a spouse consolidation loan.

So before you make the decision to apply for any refinance loan, take your time to compare and contrast different options available to you. One way to do this is to visit individual lender websites and get prequalified — most student loan refinance lenders offer this option with just a soft credit check, so you don’t have to worry about your credit score going down.

To save some time, though, consider using the Purefy compare rates tool. You’ll provide some basic information about yourself and your student loans, then you’ll be able to view offers from multiple lenders, which you can compare side by side, based on your credit profile.

This setup can make it easier to shop around and ensure that you get the best offer that you qualify for.

The bottom line

Depending on your situation, consolidating student loans with a spouse can have some significant benefits. Take some time to consider your situation and other options to make sure you find the right path forward for you. Regardless of what you decide, being proactive about your student loans can help you save time and money as you eliminate your debt.

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ELFI Rate Disclosure

4 ELFI Rate Disclosure:

Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 01/01/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

Earnest Rate Disclosure

2 Earnest Rate Disclosure:

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.72% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.39% APR to 9.19% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

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ISL Rate Disclosure

5 Iowa Student Loan Rate Disclosure:

Fixed Rate Loan Terms: 5 years/60 monthly payments, 7 years/84 monthly payments, 10 years/120 monthly payments, 15 years/180 monthly payments, or 20 years/240 monthly payments. Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. This rate is expressed as an APR. Fixed APRs range from 6.94% to 11.58% APR [low to high range with 0.25% auto-debit rate reduction]. Rates are subject to change without notice. Fixed rates will not change during the term. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan including a 0.25% auto-debit rate reduction. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. All estimates are based on information provided by you and are for informational purposes only, accuracy is not guaranteed and may not reflect actual rates or savings and do not constitute an offer of credit. Your actual rate, payment and savings may be different based on credit history, actual interest rate, loan amount, and term, including your cosigner [if applicable]. If applying with a cosigner, we use the higher credit score between the borrower and the cosigner for approval purposes. All loans are subject to credit approval.

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