What we like:
No late fees
|Fixed APR||3.87% – 7.03%|
|Variable APR||3.02% – 7.76%|
|Loan Terms||5, 8, 12, or 15 years|
|Loan Amounts||$7,500 – $300,000|
Pentagon Federal Credit Union, or PenFed for short, is a credit union that primarily serves government employees, military members and their families, and members of certain associations or organizations such as the American Red Cross or the American Society of Military Comptrollers.
PenFed provides student loan refinancing options through Purefy, as well as providing checking and savings accounts, auto loans, mortgage and home equity loans, and personal loans.
PenFed student loan refinancing could help you to reduce your monthly payments on existing student loan debt by lowering your interest rate or changing your loan repayment term. Both fixed and variable rate refinance loans are available from PenFed, providing ample flexibility. You can find out more about whether you should refinance your educational debt in this PenFed student loan refinancing review.
In this review:
- How to get PenFed Student Loan Refinancing
- Basic Information: Rates, Terms, and Fees
- The Benefits of PenFed Student Loans
- The Downsides of PenFed Student Loans
How to get PenFed Student Loan Refinancing
To qualify for a refinance student loan with PenFed, you must first be a member of the credit union. Generally, you can become a PenFed member through military service, government employment, or membership in select associations and groups.
You also must meet other eligibility criteria to refinance your student debt with PenFed, including the following:
- You must be a U.S. citizen.
- You must have reached the age of maturity in your state.
- You must have at least one educational loan that has been fully disbursed.
- You must be the primary borrower.
- You must have a bachelor’s degree or higher.
- You must be able to provide proof of income. The minimum income required is: $42,000 for solo applications for loans up to $150,000; or $25,000 for applications with a cosigner if the cosigner earns at least $42,000 annually. For loans exceeding $150,000, the minimum annual income for solo applications is $50,000 or $25,000 with a cosigner who earns at least $50,000 annually.
- For loans less than $150,000, you’ll need a credit score of at least 700 or a cosigner with a credit score of at least 720.
- For loans greater than $150,000, either you or your cosigner will need a credit score of at least 725.
If you are not able to qualify for a PenFed student loan on your own because your credit score is not high enough or because you have insufficient income, you can apply with a cosigner for a PenFed student loan. Cosigners share responsibility for the loan and could be held responsible for repayment if the primary borrower fails to pay back the loan on time.
If you can’t qualify on your own and you don’t know anybody who would be willing to cosign on the loan with you, read our guide on student loans without a cosigner.
Basic Information: Rates, Terms, and Fees
PenFed’s interest rates on refinance loans are competitive with other student loan refinancing companies. Here are some of the key terms and conditions that you need to know about the company’s refinance options:
- APRs: Fixed rate loans start at 3.87% APR and variable rate loans start at 3.02% APR
- Loan Amounts: $7,500 to $300,000
- Loan Terms: 5, 8, 12, or 15 years
- Fees: No prepayment penalties, origination fees, or application fees
The Benefits of PenFed Student Loans
There are some significant advantages associated with refinancing your student loans with PenFed, including the following:
- Interest rates are competitive. Rates for both fixed and variable rate loans are below the rates charged by many other student loan refinance lenders.
- There are no fees. You will not pay any fees to apply for or originate your loan, nor do you pay any extra fees if you decide that you want to repay your loans ahead of schedule.
- The refinancing process is quick. Once you have been approved for a loan, it usually takes only three to 15 days for your loan servicers to receive the funds from PenFed to pay off your outstanding debt balance.
- Short cosigner release. If you take out a loan with a cosigner, you can apply to have your cosigner released from the loan after just 12 months of consecutive, on-time payments. Some other lenders don’t offer release until after 36 monthly payments.
The Downsides of PenFed Student Loans
You also need to be aware of some disadvantages associated with PenFed student loans, including the following:
- Income requirements are high. Many borrowers can’t meet these requirements unless they have a cosigner. Also, PenFed’s minimum income for cosigners is higher than the minimum income many competitors require.
- Credit requirements are high. If you’re looking for a student loan refinance with limited or fair credit, PenFed might not be right for you. Some other lenders require credit scores as low as 600, while others don’t require a minimum credit score at all.
- Membership is required. Because you have to be a PenFed member to qualify, not everyone will be able to refinance their student loans with PenFed.
Bottom Line: Is PenFed Student Loan Refinancing Right for You?
PenFed’s interest rates are competitive if you or your cosigner have a good enough credit history.
However, PenFed loans may be difficult to qualify for due to income and credit requirements, as well as the fact that credit union membership is mandatory.
You will need to make sure that you can qualify to refinance your student loans with PenFed before you begin the application process. And as always, compare rates with a few other lenders to make sure you’re getting the best rates.
>>Read More: Credit Union Student Loans3.99 PenFed Student Loans
Author: Christy Rakoczy
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