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How PenFed Makes It Easier to Manage Your Student Loans

Kat Tretina
penfed student loan refinancing review
penfed student loan refinancing review

Whether you’re looking to save money or pay off your loans ahead of schedule, student loan refinancing can be an effective tool you can use to reach your goals. But, not all student loan refinancing companies are created equal. With many lenders to choose from, deciding which is best for you can be overwhelming.

PenFed Credit Union is a leading student loan refinancing company that offers competitive interest rates and unique benefits. Below, find out how refinancing loans from PenFed work and what sets them apart.

PenFed: Refinance your student loans

Whether you take out a federal or private student loan, you agree to pay back the loan with interest. In some cases, the interest rates can be quite high, causing your loan balance to balloon out of control. Student loan refinancing with PenFed could help you secure a lower rate or even reduce your monthly payment.

Types of refinancing available

PenFed allows you to refinance both federal and private student loans. The company also offers parent loan refinancing, which lets parents refinance Parent PLUS loans or private loans they took out on behalf of their children.

If you’re married, you can take advantage of PenFed’s spouse loan refinancing program. With this option, you can combine your loans together. Rather than juggling multiple loans, interest rates, and monthly payments, you’ll have just one loan and one monthly payment to worry about as a couple.

Interest rates and fees

PenFed offers both variable and fixed interest rate loans. If you want to aggressively pay off your debt, a variable interest loan may make more sense. They tend to start off with lower interest rates than fixed interest rate loans, but fluctuate over time. By contrast, fixed interest rate loans remain the same for the duration of the loan.

Loan terms range from 5 to 15 years in length. In general, the shorter the loan term, the lower your interest rate. While you can get a fixed rate for a longer loan term, the rate will generally be slightly higher than a shorter term’s fixed rate.

The minimum loan balance to refinance is $7,500; the maximum is $300,000.

There are no origination or application fees. If you decide to pay off your loans ahead of schedule, there are no prepayment penalties, either.

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Eligibility criteria

To qualify for a PenFed refinance loan, you must meet the following criteria:

  • You must be a U.S. citizen
  • You need to have a credit score of at least 700 if you’re refinancing loans up to $150,000; if your loans exceed $150,000, you’ll need a credit score of at least 725. If you don’t meet these criteria, you’ll need a co-signer.
  • You must have an income of at least $42,000 ($25,000 if you have a co-signer) for loans up to $150,000. If you’re refinancing more than $150,000, you need to have an income of at least $50,000 ($25,000 with a co-signer).
  • If a spouse couple applies together, your incomes are combined, so only one member of the couple needs to meet the income requirement. This means stay-at-home parents still have a pathway to refinance.

In addition, you must be willing to be a member of the PenFed Credit Union. It’s easy to join and you do not need to be associated with the military. Becoming a PenFed Credit Union member also gives you access to financial products like low-interest mortgages, car loans, and checking and savings accounts.

4 Ways PenFed differs from other lenders

There are many different student loan refinancing companies, so what makes PenFed different? There are four main factors that set PenFed apart from other lenders.

1. You can combine your loans with your spouse’s debt

When you get married to someone who also has student loan debt, juggling multiple loan balances, loan servicers, and due dates can be stressful. PenFed offers a unique way to streamline your loans by refinancing them together. When you refinance, PenFed combines your incomes and looks at the person with the highest credit score to determine your loan terms, helping you save money.

2. PenFed works with borrowers in cases of financial hardship

While it does not have a formal deferment or forbearance program, PenFed will work with borrowers on an individual basis if there’s a financial hardship. If you lose your job or become ill, contact the company’s member service. You may be able to temporarily postpone making payments while you get back on your feet.

3. You can qualify for a co-signer release

While a co-signer can help you get a lower interest rate, your co-signer is responsible for making payments on the loan if you fall behind. If you miss payments, they could be responsible for paying thousands and their credit score could be damaged.

As you get more established in your career, you may decide that you want to remove your co-signer so they don’t have to worry about it anymore. With PenFed, you can qualify for a co-signer release after making just 12 consecutive, on-time payments. However, spouse refinancing loans are not eligible for a co-signer release.

4. You can get a quote without damaging your credit score

Using our rate comparison tool, you can get a quote on a loan to give you an idea of what loan term, interest rate, and monthly payment you can expect. Best of all, the tool lets you compare rates from multiple lenders, to make sure you are getting the best deal. It doesn’t affect your credit score, so there’s no risk to checking your rate.

How to apply for PenFed student loan refinancing

After using the rate comparison tool, you’ll be given a list of different loans to choose from. If you find a PenFed rate and term that fits your needs, just click on —Select” to continue with the application process.

You’ll be prompted to create a student lending profile with a username and password. You’ll also be asked to enter your email address and select security questions.

Once you’ve created a profile, you can continue with the application. It will ask you for your Social Security number, driver’s license number, and current mailing address. You will have to opt in to become a PenFed Credit Union member and will have to list your housing information like your monthly rent or mortgage payment.

In most cases, you’ll receive a decision quickly. If you’re pre-approved, PenFed will reach out to you for documents to verify your income, identity, and other information listed on the application.

Once approved, it can take between three and 14 days for your refinancing loan to go through and your old ones to be paid off. PenFed would be the servicer of your new student refinance loan.  You can set-up an online account to manage your student loan and make payments, or use their mobile app. 

Managing your student loans

If you’re looking to refinance your student loans, PenFed Credit Union offers low rates and perks that many other lenders do not. Especially if you’re looking to combine your partner’s loans with your own, PenFed can be a smart option. However, it’s a good idea to compare offers from several different lenders to ensure you get the best loan terms.

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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 12/01/2022. 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 4.49% 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 4.64% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.24% APR to 8.54% 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.

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 3.94% to 8.48% 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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