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Managing Student Loan Debt Made Easy for Married Couples

Kat Tretina
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With so many people graduating with student loans, it’s no surprise that more couples are handling education debt than ever before. According to the Federal Reserve of St. Louis, 46% of young married couples had student loan debt; that number is nearly triple the amount of couples that had student loans in 1989.

Student loan refinancing can be an excellent way to manage your loans, reduce your interest rates, and save money. However, if one of the people in a marriage is non-working, earns significantly less than their partner, or has a lower credit score, it can be difficult for them to qualify for a loan. The solution? Spouse loans offered by PenFed Credit Union.

Here’s what you need to know about consolidating student loans with your spouse and how PenFed’s spouse loans work.

What is PenFed’s spouse loan?

PenFed’s spouse loan program allows couples to refinance their student loans together, combining their debt into one monthly payment, with just one lender and interest rate.

With spouse loans, PenFed looks at your joint household information to determine your eligibility for a loan and your interest rate:

  • Income: If you’re a stay at home parent or work part-time, you may not qualify for student loan refinancing on your own. But with spouse loans, PenFed considers the combined income of you and your partner rather than just your earnings. With your combined income, you’re more likely to get approved for a loan.
  • Credit score: With spouse loans, PenFed uses the highest credit score of the two people applying for a loan. If your partner has excellent credit and you only have fair credit, PenFed will use the higher score, allowing you to secure a lower interest rate than you’d get by yourself. With PenFed, you must have a credit score of at least 670, and your partner must have a score of at least 700. If your combined loan balance is over $150,000, one of you needs a credit score of at least 725.
  • Education level: The second factor that decides your interest rate is your education level. If one of you has an advanced degree, such as a master’s or doctorate, that person should apply as the primary applicant to qualify for a lower rate.

You can take advantage of spouse loans if you both have student loan debt, or even if only one of you has student loans. To be eligible, you must have at least $7,500 in combined loans, and no more than $300,000.

With spouse loan refinancing, you both are jointly responsible for repaying the loan, and it will show up on both of your credit reports.

If you are one of the 22% of couples who manage their finances separately, spouse loan refinancing may not be right for you. But for others, it can be a smart way to streamline your debt.

3 top benefits of combining student loans with your spouse’s debt

There are some major benefits to consolidating student loans with your spouse’s loans:

1. You’re more likely to qualify for a student loan refinance

According to the Pew Research Center, stay-at-home moms and dads account for about one in five U.S. parents. If you are one of them, you may not have an income of your own to report despite making significant contributions to your household. That issue makes it difficult to get a loan by yourself.

With spouse loan refinancing, PenFed looks at your household earnings. With your combined income, you’re more likely to get a loan and take advantage of refinancing’s benefits.

2. You can get a lower interest rate and save money

Because PenFed looks at the highest credit score and education level between you and your spouse, you can take advantage of your partner’s good credit and degrees. If your partner has better credit than you and earned an advanced degree, you may qualify for a lower interest rate, allowing you to save more money over time.

For example, let’s say you and your spouse have $60,000 in combined student loans, with a 10-year repayment term and an average interest rate of 6%. If you refinanced your loans with a spouse loan and qualified for a 10-year loan at 4% interest, you’d save over $7,000 over the length of your repayment period.

 Combined LoansSpouse Loan
Loan Balance$60,000$60,000
Loan Term10 Years10 Years
Interest Rate6%4%
Minimum Monthly Payment$666$607
Total Interest Paid$19,935$12,897
Total Repaid$79,935$72,897
Total Savings: $7,038

3. You’ll simplify your student loan payments

Saving for College found that the typical bachelor’s degree graduate has between eight and 12 different student loans. If you both graduated with education debt, you could have as many as 24 loans between you, making it difficult to remember all of your payment due dates and loan servicers.

When you refinance with PenFed’s spouse loans, you consolidate your debt into just one loan. Going forward, you’ll only have one loan servicer and one easy monthly payment to remember.

Why refinance student loans with your spouse?

If you’re married and have student loan debt, spouse loan refinancing can be an excellent way to manage your loans. By refinancing together, you improve your chances of qualifying for a loan and getting a competitive interest rate.

While PenFed Credit Union is the only lender that offers spouse loan refinancing, another option is to refinance your loans with your spouse as a cosigner. If you decide to go this route, make sure you use Purefy’s Compare Rates tool to get rate quotes from multiple student loan refinancing lenders.

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