There are very few people who wouldn’t want to pay off their student loans ahead of schedule, and there are several different ways to do it. One of the best is to refinance your student loans through PenFed Powered by Purefy, according to a recent study by NerdWallet.
PenFed Powered by Purefy received the award for Best Student Loan Refinancing for Fast Payoff and also tied with Earnest for Best Student Loan Refinancing Overall.
Here’s how paying off your student loans fast can help you and why PenFed Powered by Purefy is the top choice if that’s your goal.
Benefits of paying off student loans faster
There are several ways to pay off student loans fast, and each can create several opportunities for borrowers. Here are some of the biggest benefits to consider:
- You’ll pay less interest: Your interest rate won’t change on your loans, but the faster you pay off your debt, the lower the amount of interest that can accrue. Even if you pay just a little extra each month, that’s a lower balance that your interest rate will apply to.
- You’ll be debt-free quicker: Getting rid of student loan debt is a top priority for many college graduates and their parents. Student loan debt has been connected to a number of financial and mental health problems, so the sooner you can relieve yourself of that burden, the better.
- You can focus on other priorities: Student loan debt can make it difficult to save for retirement, buy a house and work toward other financial goals. By paying off your loans faster, you’ll be able to start working toward your other top money priorities sooner.
How to pay off student loans fast through refinancing
The best student loan refinance companies offer low interest rates and flexible repayment options. Depending on your current situation, you may be able to get a lower interest rate on your new loan.
What’s more, you can often refinance your loans with a shorter repayment period. The standard repayment term is 10 years, but you can go as low as five years with some lenders. Of course, that means you’ll have a higher monthly payment. But if you can afford it, the savings and earlier payoff can be well worth it.
Even if you can’t go that short with your repayment schedule, opting for even a slightly shorter term can make a huge difference in terms of interest savings and the other benefits discussed above.
So if you’re interested in learning how to pay off student loans fast, refinancing is one of the best ways to achieve your goal.
Why you should choose PenFed for paying off student loans fast
Refinancing is one of many ways to pay off student loans fast, but the best student loan refinance lenders offer extra features that make it even easier.
PenFed Powered by Purefy was named Best Student Loan Refinancing for Fast Payoff in the 2021 NerdWallet Best-Of Awards because of two specific features the lender offers: biweekly payments via autopay and extra payments via autopay.
Biweekly payments can be beneficial because they give you an extra months’ worth of payments every year and also reduces the amount of time interest can accrue, allowing you to pay down the principal loan amount faster.
In many cases, if you want to make biweekly payments or additional payments, you have to do it manually. This requires you to remember and to take time out of your day to log in to your account and submit the request. It also requires you to manage your money in a way that makes it so you can afford your strategy every month.
But if you can set up one or both options via automatic payments, you don’t need to worry about doing anything manually. And because you’ve set everything up on autopay, you can budget accordingly, knowing that’s money you can’t spend elsewhere.
PenFed also offers low fixed interest rates for all borrowers who qualify, giving you a better chance of scoring a lower rate than what you’re currently paying.
How to see your PenFed refinance rates
Like other student loan refinance lenders, PenFed allows you to get prequalified before you officially apply.
Before you go through it with multiple lenders, though, consider using the Purefy Compare Rates tool to get prequalified with a bunch of student loan refinancing companies in one place. This process requires you to share a little information about yourself and your student loans and runs a soft credit check, which doesn’t impact your credit score.
Once you’ve submitted your information, you’ll be able to view loan offers based on your credit profile from PenFed Credit Union and other student loan refinancing companies all in one place. This setup saves you time because it eliminates the need to get prequalified with each individual lender, and it also makes it easier to compare offers side by side.
As you do your research, though, make sure you’re looking at more than just the interest rate, especially if you’re looking into how to pay off student loans fast. For instance, PenFed’s options to make biweekly and additional payments on autopay can be incredibly helpful in working toward your goal.
The bottom line
Student loan refinancing can make a huge impact on your student loan repayment plan. However, it’s important to make sure your credit score is in tip-top shape before you apply because the higher your score, the better your chances of getting approved with a low interest rate.
If you’re not quite there yet, you may want to take some time to improve your credit score or ask someone to cosign your loan — PenFed also offers cosigner release after 12 consecutive on-time payments, as long as you meet the credit requirements.
Once you’ve gone through the process of refinancing, take steps to figure out other ways to pay off your student loans faster. With PenFed, it’ll be easy because you can automate the process.
Before you choose PenFed or any other lender, though, make sure you shop around and compare several options, so you can find the best choice for you.