PenFed vs. SoFi Student Loan Refinancing: Which Is Best For You?

Kat Tretina

You’ve been told time and time again that you need to get rate quotes from multiple lenders before refinancing your student loans. Two top student loan refinance companies are PenFed Credit Union and SoFi. While they both offer several loan options and competitive interest rates, they differ from one another in several key ways.

If you’re trying to decide between PenFed and SoFi, here’s what you should know.

2 Top Student Loan Refinance Companies: PenFed and SoFi

PenFed and SoFi both offer student loan refinancing for federal and private student loans. However, they are very different companies.

PenFed is a credit union, meaning it’s a non-profit organization and you become a member when you take advantage of its loans and other products. PenFed has a long legacy; it was founded in 1935, and now serves over 2 million members worldwide. It provides loans and other financial products to people in all 50 states and the District of Columbia, as well as Guam, Puerto Rico, and Okinawa.

By contrast, SoFi is a younger for-profit business. It was founded in 2011 by Stanford University business school students. Today, SoFi has over $50 billion in funded loans, and it’s served over 1.8 million members. Like PenFed, SoFi offers its products in all 50 states and the District of Columbia.

Both PenFed and SoFi offer student loan refinancing, so how do they measure up against one another? At Purefy, we did an intensive review of both of these companies so you can make an informed decision about which lender is best for you.

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Free eBook: How to Conquer Student Loans

SoFi Student Loan Refinancing Review

SoFi is well known for its refinancing options. College graduates can refinance their loans without worrying about origination or application fees, and SoFi offers competitive interest rates and other perks.


With SoFi, you can refinance the following loan types:

  • Federal undergraduate loans
  • Federal graduate loans
  • Federal parent loans
  • Private undergraduate loans
  • Private graduate loans
  • Private parent loans

Specialty student loans, such as bar loans and residency loans, cannot be refinanced with SoFi.

For loans to be eligible for refinancing, they must have been used to attend an eligible, accredited Title IV school. If you used your student loans to attend other institutions, such as for-profit schools, you aren’t eligible for refinancing from SoFi.

The minimum amount you can refinance is $5,000. SoFi doesn’t have a limit on how much you can refinance; you can refinance up to the full amount of your outstanding student loans.

However, that doesn’t necessarily guarantee that you’ll get approved for the full amount. SoFi will review your application and will perform a credit check to determine how large of a loan you can afford to repay. Depending on your circumstances, you may not be able to refinance the full amount unless you have a cosigner.

Degree Requirements

To qualify for a loan, you must have graduated from your program. SoFi requires borrowers to have at least an associate degree. If you dropped out of school or are currently still enrolled, you aren’t eligible for refinancing.

Interest Rates

With SoFi, you can pick between fixed and variable interest rates. While fixed rates stay the same for the duration of your repayment term, variable interest rates can change along with market conditions.


While SoFi does allow you to apply for student loan refinancing with a cosigner, it does not offer cosigner releases. Your cosigner will remain on the loan until it’s paid off, or until you refinance again solely in your name.

Not being able to get a cosigner release is a major drawback, and something to carefully consider before submitting an application through SoFi.


SoFi has multiple repayment terms to choose from. You can opt for a loan term of five, seven, 10, 15, or 20 years.

In general, the shorter the loan term you select, the lower your interest rate will be. Extending your loan term will give you a smaller monthly payment, but you’ll likely get a higher interest rate and pay more in interest charges over time.

Discounts and Incentives

SoFi has two potential discount programs:

  • Autopay: If you sign up for automatic payments, SoFi will reduce your interest rate by 0.25%.
  • SoFi Money: If you check your refinancing rate through SoFi’s website, you’ll get $10 in SoFi Money, SoFi’s cash management account.

Loan Servicer

After your refinancing loan is disbursed, SoFi is not your loan servicer. Instead, your loan will be serviced by MOHELA. MOHELA is the company you contact if you have any questions or issues with your account.


As a refinancing lender, SoFi has three major standout features:

  • Unemployment protection: If you lose your job, SoFi will offer you up to three months of forbearance at a time through the unemployment protection program. Over the life of your loan, you can postpone your payments for up to 12 months.
  • Financial planning: As a SoFi member, you’re entitled to free sessions with financial planners to develop a plan to achieve your goals.
  • Career coaching: SoFi members can take advantage of SoFi’s career coaching benefits and get free interview and resume help.

Customer Service

SoFi is a large company, so it isn’t surprising that some customers have lodged complaints against the lender. In 2020, 22 consumer complaints were submitted to the Consumer Financial Protection Bureau (CFPB) about SoFi’s student loan division. The most common issues were problems with customer service and receiving confusing information. You can view current complaints on the CFPB Consumer Complaint Database.


A leading review website, TrustPilot is a common resource for consumers looking for information about companies. On the site, SoFi has a 3.3 TrustScore based on over 2,400 reviews, giving it an “average” rating.

SoFi is recognized by industry experts as a leading lender. In fact, it was NerdWallet’s choice for “best refinancing lender for doctors” in 2020.

PenFed Student Loan Refinancing Review

PenFed offers a range of financial products, including savings accounts, personal loans, and student loan refinancing. PenFed is a credit union, and it gives its members special benefits and discounts.


Like SoFi, you can refinance the following loan types with PenFed:

  • Federal undergraduate loans
  • Federal graduate loans
  • Federal parent loans
  • Private undergraduate loans
  • Private graduate loans
  • Private parent loans

The minimum loan balance you can refinance is $7,500, and the maximum is $300,000.

Interest Rates

PenFed only offers fixed rates, so you would not be able to select a variable rate option like you would with SoFi. 


PenFed offers multiple loan terms. You can choose a term of five, eight, 12, or 15 years.

To get the lowest possible rate, it’s typically best to opt for a term of eight years or less. If you want a smaller payment, opt for a term of 12 or 15 years.


PenFed allows you to apply for a refinancing loan with a cosigner. However, adding a cosigner to your PenFed loan application doesn’t have to be a permanent decision.

Unlike SoFi, PenFed does offer cosigner releases. After making 12 monthly, consecutive payments on time, you can apply for a cosigner release.

Discounts and Incentives

Unlike some other lenders, PenFed doesn’t give borrowers an autopay discount. However, it does have some other benefits:

  • Discounts: If you join the PenFed Credit Union, you can get discounts on other services, including car insurance, rental cars, tax preparation software, life insurance, and dental coverage.

Loan Servicer

PenFed is both your lender and loan servicer; PenFed is who you contact if you have any questions or to make payments. Having the same company act as both lender and servicer ensures a smooth transition between when you submit your application and when you start making payments on your new loan.


PenFed has two valuable perks as a refinancing lender:

  • Hardship deferment: PenFed offers temporary and permanent financial hardship assistance for borrowers who are having trouble making payments. 
  • Spousal refinancing: PenFed Credit Union is the only lender that offers spouse student loan refinancing. With this unique option, you and your spouse can refinance your loans together, combining your debt into one. Spouse refinancing can be especially useful if one partner out earns the other, or if you have a lower credit score than your spouse. You can increase your chances of getting a loan and get a lower interest rate than you’d get if you refinanced by yourself.

Customer Service

PenFed has an established reputation for excellent customer service. In fact, PenFed received just one complaint about its student loan division in 2020, a remarkably low number for a private student loan refinancing company.


On TrustPilot, PenFed has a 4.6 TrustScore based on 112 customer reviews, giving it an “excellent” rating.

In 2021, NerdWallet selected PenFed as the best overall student loan refinancing company, and the best student loan refinancing company for fast payoff.

Student loan refinance rates are currently at all-time lows — but that won't last for long.

Similar to mortgage refinance rates, student loan refinance rates are now at dramatic lows. Don’t wait to see if you qualify for a major drop in interest.

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7 Reasons Why PenFed is Our Top Choice

While both PenFed and SoFi are excellent refinancing lenders, PenFed is our choice for the best student loan refinancing company because it offers the following advantages:

1. PenFed offers spousal loan refinancing

As the only lender that allows spouses to refinance their loans together, PenFed stands out as an industry leader. Spouse loan refinancing is a convenient option for couples who both took out student loans to pay for school, but it’s also useful if you are a stay-at-home spouse or earn significantly less than your partner.

When you apply for a spouse refinancing loan, PenFed will look at your combined income and the higher of the two credit scores. If one of you has an advanced degree, PenFed will also use the higher degree when determining your interest rate.

PenFed’s spouse loan refinancing program can help you qualify for a lower interest rate than you’d get on your own and help you tackle your combined debt as a team.

2. You may qualify for a cosigner release

Adding a cosigner — a parent, relative, or close friend with good credit and reliable income — to your loan application improves your odds of being approved for a loan and getting a competitive interest rate.

However, acting as a cosigner can be a significant burden, and can keep your loved one from being able to qualify for a home loan or mortgage. As your credit improves and your income increases, you want to consider applying for a cosigner release to remove your cosigner from the loan.

Cosigner releases aren’t common for student loan refinancing lenders; SoFi doesn’t offer them. However, PenFed does; if you qualify, your loved one’s responsibility for the loan is eliminated. And while many lenders require you to make payments for several years before you can apply for a cosigner release, you can apply for a cosigner release from PenFed after just one year of one-time monthly payments.

3. There are multiple payment options

PenFed has multiple loan terms, but it also has different automated options you can use to accelerate your debt repayment. The lender doesn’t charge prepayment penalties, and you can set up automatic payments for more than the minimum amount required. If you want to make biweekly payments to cut down on the interest that accrues, PenFed allows that option too.

4. Members have access to additional discounts

While credit union membership is required to qualify for a loan, becoming a member isn’t difficult or expensive. You can join online, and membership costs just $5 to get started.

Once you’re a member of PenFed Credit Union, you can take advantage of special member perks and discounts. Below are just a few of the discounts you can use:

  • National car rental: Use your PenFed card and get 20% off all car rentals at National.
  • Life insurance: As a credit union member, you can purchase life insurance without a medical exam through TruStage. Plus, you can qualify for credit union member discounts on policies.
  • TurboTax: When you file your tax return, you can save $10 to $20 off your TurboTax subscription fee.
  • SimpliSafe: If you’re shopping for a home security service, you can get a free home security camera and two free months of monitoring service as a PenFed Credit Union member.

5. PenFed offers in-house loan servicing

With other refinancing lenders, the lender you send your application to isn’t the same company that manages your loan. Many lenders outsource the loan servicing aspect to other companies, and your loans can be sold and transferred to different servicers over time. The uncertainty can make managing your loans more complicated, and the level of customer service can vary from servicer to servicer.

PenFed provides its own in-house servicing for refinanced loans. If you have questions, problems with your account, or want to make extra payments, you’ll always know who to call.

6. PenFed has transparent eligibility requirements

With many lenders, figuring out whether you are eligible for a refinancing loan is difficult since they don’t often post their exact requirements. However, PenFed prides itself on transparency, so you can see if you meet its criteria — and if you need a cosigner — before you submit an application:

  • Income requirements: If the amount of student loan you’re planning on refinancing is under $150,000, PenFed requires you to earn at least $42,000 as an individual or as a spouse couple applying for a Spouse Loan. If you’re applying with a cosigner like a parent, the minimum income amount is $25,000. If your loan balance is over $150,000, the minimum income required is $50,000 if you’re applying by yourself or as a couple, and $25,000 if you have a cosigner.
  • Minimum credit score: For loans up to $150,000, your credit score needs to be 675 or higher. If your loan balance is over $150,000, the minimum credit score required is 725. Using a cosigner lowers these requirements.
  • When a co-signer is required: You’ll need a cosigner if your loan balance is under $150,000, your credit score is under 700, and your annual income is under $42,000. You’ll also need a cosigner if your loan balance is over $150,000, your credit score is under 725, and your income is under $50,000. To qualify for a loan, your cosigner must meet the individual credit score and income requirements.

7. There are other financial products available

If you join PenFed Credit Union to refinance your student loans, you are an official member and can take advantage of PenFed’s other financial products and services, including:

  • High-yield savings accounts: You can save your money in a high-yield account and earn over seven times the national average annual percentage yield.
  • Rewards credit cards: PenFed customers can apply for rewards credit cards. Options include cards with $0 annual fees that allow you to earn 1.5% cash back on all purchases.
  • Other loans: As a PenFed member, you can also use the credit union for auto loans, personal loans, and mortgages. Because it’s a credit union, you may qualify for lower interest rates through PenFed than you would with traditional banks.

Choosing a Student Loan Refinance Company

When you’re thinking about refinancing your student loans, it’s important to check rates and terms from several different lenders. As two top student loan refinancing companies, PenFed and SoFi are great lenders to start with when you do your research.

The 4 Best Companies to Refinance Student Loans

Our Top-Rated Picks for 2022 Offer Low Rates and No Fees


No Maximum Loan Amount

Fixed Rate

4.83% – 7.64% APR 4

Variable Rate

3.99% – 7.24% APR 4

98% of surveyed customers would recommend SoFi to a friend

Fixed Rate

4.49% – 8.99% APR 3

Variable Rate

5.09% – 8.99% APR 3


Precision Pricing — Pick Your Monthly Payment

Fixed Rate

4.47% – 8.99% APR 2

Variable Rate

4.14% – 8.94% APR 2

Loans Available in All States but Maine and Oregon

Fixed Rate

6.94% – 11.58% APR 5

Variable Rate

Not Offered

When comparing student loan refinancing companies, consider the following factors to narrow down your list:

  • Interest rates: The loan interest rate has a big impact on your total repayment costs, so look for a lender that offers low interest rates. However, don’t focus only on the lowest advertised rates; those rates are typically reserved for borrowers with excellent credit that select short loan terms. Instead, get a rate quote to get a more accurate estimate of what rates to expect.
  • Interest types: Not all companies offer both fixed and variable interest rates. If you want to pay off your debt aggressively and want the lowest interest rate possible, check that the lender has variable-rate loans available.
  • Loan terms: Depending on your goals, you may want a shorter term to save money, or a longer term to reduce your payment.
  • Cosigner releases: While PenFed allows you to release your cosigner from your loan, not all lenders have cosigner releases. If that’s important to you, make sure you check the lender’s policies.

If you’re looking to save time as you comparison shop, use Purefy’s “Check Today’s rates” tool. By filling out one simple form, you can get rate quotes from multiple refinancing lenders without affecting your credit score.

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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.

Advertiser Disclosure:


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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