2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More
2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More


Married Life: 5 Perfect Situations for a Spousal Student Loan Consolidation

Adam Sisson
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With millions of student loan borrowers in the U.S., it wouldn’t be surprising for the love of your life to be one of them.

If you’re married to someone with student debt — and you happen to have student loans, too — you may feel overwhelmed with your:

  • Total amount of combined monthly payments.
  • Interest rates and costs associated with them.
  • Variety of different bills to keep track of.

Luckily, there’s a smart solution that could help with each of those three categories — a spousal student loan consolidation.

This loan type is exclusive to PenFed Credit Union and refinances your and your spouse’s student loans together into one new loan. Unlike a standard cosigned refinance, your combined income and debts are what determines eligibility — instead of the primary borrower’s and cosigner’s being evaluated separately.

In addition, your interest rate is based on only the highest credit score and degree earned between the two of you. With this unique feature, married couples who join forces could get an even lower interest rate than they would be able to under a typical refinance.

By pursuing a spousal loan consolidation, you’ll have the opportunity to:

  • Pick a new repayment term to either increase your monthly payment and pay off loans faster, or decrease it to make your bills more manageable.
  • Get a much lower rate to save significantly on interest costs while paying off your refinanced loan.
  • Combine all your student loans together with just one monthly payment to keep track of.

Here are five comsituations for married couples with student loans that could make perfect sense for a spousal student loan consolidation.

1. One spouse has a higher credit score

If you or your spouse has a higher credit score, a spousal student loan consolidation only uses that better score to determine your interest rate. This can be especially helpful if the person with the lower score also has more difficult student loan debt to manage, as they may not be able to qualify for the benefits of a refinance on their own — let alone a better interest rate.

For couples who are approved for a spousal refinance, credit history is one of the most critical factors for lenders to decide which interest rate to offer.

And the great part about using only the higher credit score? You may qualify for a much lower rate. The lower your new rate, the more your household will save month-to-month on interest costs and over the life of your refinanced loan.

2. One spouse has no degree or a lower degree

If one person in your marriage doesn’t have a degree, they may not be able to refinance on their own — only certain lenders, like Iowa Student Loan, offer this. But a spousal student loan consolidation will only look at the primary borrower’s degree, not the cosigner’s.

Similarly, if one spouse has a master’s or doctorate degree, a spousal refinance can qualify you both for a significantly lower rate — allowing you to save big time on interest costs and have more money for other life goals.

3. One spouse has no income or low income

Income is also an important eligibility factor to get approved for a refinance. Unfortunately, people who have low, inconsistent, or no income are unlikely to be approved for a refinance without a cosigner. And it’s actually quite common for married couples to include one person who doesn’t work full time.

The nice thing about a spousal student loan consolidation? This type of loan only looks at the combined income of both you and your significant other.

You’ll be much more likely to qualify and be given a better rate, compared to a cosigned refinance that looks at both of your incomes in isolation.

4. One spouse has higher debt

Another major qualification factor for a refinance is your debt-to-income (DTI) ratio. If one spouse has a lot of debt, they would struggle to be approved on their own without the aid of a cosigner.

A spousal student loan consolidation, however, looks at your combined debt-to-income ratio. This means you’ll be more likely to be eligible and offered a lower rate than if each person’s debt was assessed separately.

5. You have a large number of loans

Did both you and your spouse take out a handful of federal and private student loans to afford tuition?

That’s a lot of loans to keep track of — with a lot of separate bills to remember and pay every month.

An essential benefit of a spousal student loan consolidation is the “consolidation” part —combining all your loans into one. This gives you just one bill from one new loan servicer to handle, which can help make managing your monthly finances less of a headache.

When a spousal loan consolidation could be right for you

Married couples who have student loan debt could benefit dramatically from a refinance, including a lower interest rate, better repayment term, and only one loan to repay.

But a typical refinance’s eligibility guidelines can be tricky to navigate if you have a low credit score, no degree, inconsistent income, or large amounts of debt — with or without a cosigner.

The unique aspects of a spousal student loan consolidation — only offered by PenFed — can make getting approved much simpler by using aspects of both your financial situations.

And in many circumstances, these features can help you qualify for a drastically lower interest rate.

Start by using Purefy’s Compare Rates tool to see your refinance offers from a variety of lenders, including PenFed. You can check the rates and terms you qualify for all in one place with one fast form — and no impact to your credit score.

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