PenFed Credit Union Student Loan Refinancing Review

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PenFed Credit Union Student Loan Refinancing Review

The Pentagon Federal Credit Union, sometimes known as PenFed, was founded in 1935 and is a big financial organization with branches throughout the United States and on military facilities around the globe. While PenFed does cater to military personnel and their families, membership is open to anybody: anyone may join the credit union and utilize its wide range of financial products and services.

PenFed is well-known for its student loans, which are provided by a third party, Sallie Mae, and its student loan refinancing program, which it finances and administers directly.

Continue reading to learn about the loan rates and conditions offered by PenFed.


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  • Spousal loan refinancing

  • Transparent income and credit requirements

  • Generous cosigner release policy

  • Competitive interest rates


  • Bachelor’s degree required

  • Limited loan terms

  • Restrictions apply on loan amounts

  • No official forbearance or discharge policy

Pros Explained

  • PenFed Credit Union is the only direct lender that allows couples to refinance their debts together. A spousal loan may be highly beneficial for couples with one non-working spouse or if one person makes much more than the other, since the lender looks at the couple’s total income rather than the individual’s wages.
  • Transparent income and credit standards: PenFed publicly reveals its income and credit requirements, so borrowers and cosigners may determine whether they fit the lender’s requirements before applying.
  • Cosigners on PenFed loans may be eligible for removal after only 12 months of continuous, on-time monthly payments. Many lenders, on the other hand, demand three to four years of payments before cosigners may request for release, and others do not give release at all.
  • PenFed offers competitive interest rates, with fixed-rate loans starting as low as 6.74%. And the APR range is just approximately two percentage points.

Cons Explained

  • Bachelor’s degree required: Applicants must have a B.A. or B.S. to be eligible for a loan. You are not eligible for a loan if you did not graduate or have just an associate’s degree.
  • Loan terms are limited: Unlike other lenders, PenFed Credit Union gives just 15 years to repay your loan. In general, shorter loan durations result in larger monthly payments.
  • Loan amount restrictions apply: Unlike other lenders, PenFed has loan amount restrictions. The maximum is $300,000, while the minimum is $7,500, which is rather hefty.
  • There is no formal policy on forbearance or discharge: PenFed does not have established processes for borrowers who are suffering financial difficulties.
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PenFed Credit Union Refinancing Loans Available

PenFed offers student debt refinancing to both graduates and parents.

Student Loan Refinancing

If you hold a bachelor’s or master’s degree, you may be eligible for PenFed student loan refinancing. You may refinance up to $300,000 and repay over up to 15 years.

If you are married, you may also benefit from spousal loan refinancing. PenFed Credit Union is the only lender that allows married couples to refinance their debts jointly, or for one spouse to take over the other’s loans and transfer them into their own name.

Student Loan Refinancing
Fixed Rates7.74% to 9.93%
Loan Amounts$7,500 to $300,000
Loan Terms5, 8, 12, and 15 years

Parent Loan Refinancing

If you took out student loans to pay for your child’s education, PenFed may help you refinance them.

PenFed also enables your kid to apply for student loan refinancing and to accept a parent debt in their name, freeing you from repayment.

Parent Loan Refinancing
Fixed Rates7.74% to 9.93%
Loan Amounts$7,500 to $300,000
Loan Terms5, 8, 12, and 15 years

Frequently Asked Questions

How Does One Become Eligible for a Loan?

You must fulfill the following conditions to be eligible for student loan refinancing with PenFed Credit Union:

  • Be a U.S. citizen
  • A bachelor’s degree or above is required.
  • Be of legal age in your state.
  • If your credit score is between 670 and 675 and/or your yearly income is between $25,000 and $41,999, you’ll require a cosigner for loans up to $150,000. Your cosigner must earn at least $42,000 per year and have a credit score of 720 or better.
  • If your credit score is between 670 and 724 and/or your yearly income is between $25,000 and $49,999, you’ll need a cosigner for loans beyond $150,000. Cosigners must have a minimum yearly income of $50,000 and a credit score of 725 or higher.
  • Refinance at least $7,500 in student loans
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Is Loan Prequalification Available?

To check your rates, visit PenFed’s prequalification tool. Obtaining a quotation will have no effect on your credit score.

Are Cosigners Required?

While a cosigner is not necessary, if your credit score is between 670 and 699 and your yearly income is between $25,000 and $49,999, you may need one. Having a cosigner on your loan might help you qualify for it and earn a reduced interest rate.

After 12 months of on-time monthly payments, you may seek a cosigner release.

How Long Does It Take for Approval and Dispersal?

According to PenFed, your prior loan servicer may take up to 14 days to receive the loan payoff monies and apply the funds to your previous student loans. If your account hasn’t been cleared after 14 days, please contact PenFed for an update.

How Do You Apply for a PenFed Credit Union Refinanced Student Loan?

To apply for a loan from PenFed, you’ll need the following information:

  • Social Security number
  • Date of birth
  • Phone number
  • Email address
  • Current address
  • Monthly income
  • Housing costs
  • Employer information
  • Current loan payoff statement
  • Loan account number

Loan Fees

PenFed does not charge application or origination costs, nor do they impose prepayment penalties.

Loan Discounts

PenFed does not provide loan discounts such as automatic payment or loyalty incentives.

Forbearance and Loan Discharge Options

PenFed does not have a clear policy on forbearance or discharge. It does, however, urge borrowers to contact customer support to explore solutions if they are experiencing financial difficulties or another emergency.

Customer Service

Customer care may be reached through email at [email protected] or by phone at 202-888-4320. It is open Monday through Friday, from 9:00 a.m. to 7:00 p.m. ET.

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PenFed Credit Union has a lot to offer in terms of student debt refinancing. Its criteria, rules, and conditions are all expressed clearly and transparently. Its interest rates are not only competitively cheap, but their spread is also amazingly narrow: just roughly two percentage points between the lowest and maximum APR (none of those 12-point ranges that tease you with a low rate but end up giving you a double-digit one).

Then there are its distinctive features, such as spousal loan refinancing, which allows a couple to consolidate all of their debt into one large loan. Other generous features include allowing parents to transfer debts put out for their child onto the child’s name.

In exchange for its generosity, PenFed imposes various restrictions on loan minimums and maximums, graduation status, and income and cosigner requirements. Cosigners, on the other hand, may be released from their commitment in as little as 12 months, which is quite generous. The absence of an explicit forbearance or debt discharge policy is concerning, particularly considering the credit union’s openness, but there is no reason to doubt that it would be eager to engage with distressed members.

The greater issue is the concept of refinancing in general. While refinancing your student loans may save you money and help you pay off your debt faster, there are certain risks to consider, particularly if you have federal student loans. Even if you decide to refinance with PenFed Credit Union, it’s a good idea to shop around and compare rates and conditions from other lenders. To assist you, we have picked the finest student loan refinancing firms of 2022.


Investopedia is committed to delivering impartial, detailed assessments of student loan lenders and refinance lenders to customers. We gathered over 45 data points from over 15 lenders, including interest rates, fees, loan amounts, and payback periods, to guarantee that our material assists consumers in making the best borrowing option for their educational requirements.

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