PenFed Credit Union stopped offering student loan refinancing in May 2024. Instead, the credit union directs interested students and graduates to its partner, Sparrow, which is an online student loan marketplace. Any information included below refers to Sparrow’s program, not a student loan refinance product offered directly through PenFed.
If you have a private student loan that is in default or about to be in default, there is a lender who specializes in private student loan refinancing for struggling borrowers:
- No application or repayment fees
- Great for borrowers with Poor or Fair credit
- Flexible payment terms
- Refinance without a degree
- 7+ years assisting distressed borrowers improve their credit score
- Checking rates will not impact your credit score
Student Loan Refinancing via Sparrow
- Compare 17+ lenders in one place (and lenders can’t pay for rankings)
- No impact on credit for basic search
- Loans with and without cosigner
- No fees for using Sparrow
- Not actually offered by PenFed Credit Union
- Not a lender but a marketplace to find lenders
- Relatively new (launched in 2020)
| Rates (APR) | Varies by lender |
| Loan amounts | Varies by lender, but most allow between $5,000 and $500,000 |
| Repayment terms | 5 – 20 years |
Here are some of the best alternatives:
Pricing Disclosure:
Fixed rates range from 4.49% APR to 11.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 11.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 11/4/26 and are subject to change at any time. 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. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount:
The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement 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. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans), the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Member Rate Discount:
To be eligible for an additional 0.125% interest rate reduction on a Student Loan Refinancing, you must, within 31 days of loan funding, either (1) be a SoFi Plus subscriber, (2) receive an Eligible Direct Deposit into a SoFi Checking or Savings account, or (3) receive at least $5,000 in Qualifying Deposits into a SoFi Checking or Savings account. You must continue to meet at least one of the above eligibility criteria every 31 days to maintain the discount. See the SoFi Plus terms for details on SoFi Plus subscription. For more details on Eligible Direct Deposit or Qualifying Deposits, please see https://www.sofi.com/legal/banking-rate-sheet.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
Pricing Disclosure:
Fixed rates range from 4.49% APR to 11.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 11.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 11/4/26 and are subject to change at any time. 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. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount:
The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement 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. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans), the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Member Rate Discount:
To be eligible for an additional 0.125% interest rate reduction on a Student Loan Refinancing, you must, within 31 days of loan funding, either (1) be a SoFi Plus subscriber, (2) receive an Eligible Direct Deposit into a SoFi Checking or Savings account, or (3) receive at least $5,000 in Qualifying Deposits into a SoFi Checking or Savings account. You must continue to meet at least one of the above eligibility criteria every 31 days to maintain the discount. See the SoFi Plus terms for details on SoFi Plus subscription. For more details on Eligible Direct Deposit or Qualifying Deposits, please see https://www.sofi.com/legal/banking-rate-sheet.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
Pricing Disclosure:
Fixed rates range from 4.49% APR to 11.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 11.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 11/4/26 and are subject to change at any time. 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. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount:
The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement 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. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans), the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Member Rate Discount:
To be eligible for an additional 0.125% interest rate reduction on a Student Loan Refinancing, you must, within 31 days of loan funding, either (1) be a SoFi Plus subscriber, (2) receive an Eligible Direct Deposit into a SoFi Checking or Savings account, or (3) receive at least $5,000 in Qualifying Deposits into a SoFi Checking or Savings account. You must continue to meet at least one of the above eligibility criteria every 31 days to maintain the discount. See the SoFi Plus terms for details on SoFi Plus subscription. For more details on Eligible Direct Deposit or Qualifying Deposits, please see https://www.sofi.com/legal/banking-rate-sheet.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
Does PenFed Credit Union offer student loan refinancing?
PenFed Credit Union no longer offers student loan refinancing. Instead, the PenFed (the nation’s third-largest credit union, behind Navy Federal and SECU) now partners with Sparrow, a student loan marketplace that makes it easy for students to search for private loans and student loan refinancing options from multiple lenders, all in one place.
Why the switch? That’s not clear: PenFed didn’t publish any press releases or make any statements regarding its discontinuation of the program.
How to get Sparrow student loan refinancing through PenFed
Using Sparrow for student loan refinancing is easy, and there’s a lot to like about the program:
- You can find student loan refinancing with a cosigner (and without).
- There are no fees to use the service.
- Lenders can’t pay for ranking; you can trust the recommendations Sparrow gives you.
Ready to check out Sparrow? The main student loan page on PenFed’s website directs you to Sparrow when you’re ready to look for rates.
But you don’t need to be a PenFed member (or even browse the PenFed website) to get to Sparrow. The online student loan refinance marketplace is totally free for anyone.
Here’s how to start your student loan refinancing search on Sparrow:
1. Make sure you’re eligible
Not everyone is eligible for student loan refinancing. If you don’t have a strong enough credit score or high enough income, you may not qualify (at least, not without a cosigner).
Before even considering prequalifying through Sparrow, make sure you meet these basic criteria:
- Credit score: Though each student loan company on Sparrow’s platform has different criteria, Sparrow indicates that its partners typically require a credit score in the high 600s.
- Income: Sparrow’s lenders require an annual income of at least $24,000.
Assuming you meet these criteria, create an account with Sparrow and get prequalified by filling out a single form; it takes about three minutes. Within 20 seconds of submission, you’ll find out whether you prequalify with any lenders.
Don’t meet student loan refinance requirements on your own? You may qualify with a cosigner.
2. Compare rates
Based on the form you filled out, Sparrow will show you all the lenders you prequalify with. Compare them closely, primarily to see which lender offers the lowest rates. (Make sure you understand the difference between fixed and variable student loan rates before moving forward.)
You might also want to compare lenders based on other criteria, such as:
- Loan terms: Some lenders might give you longer to repay your loan. If you want smaller monthly payments, choose a lender with a longer loan term.
- Customer service: You’ll be working with this lender for half a decade at the very least. Make sure you choose one that you feel good about, based on customer reviews online.
3. Choose a lender
Once you’ve figured out which lender is right for you, select it via Sparrow’s platform. Sparrow will redirect you to that website, where you’ll complete the process of applying for the refinance.
The prequalification step does not require a hard credit check, but you should anticipate a full credit inquiry once you start working with your chosen lender.
How does Sparrow student loan refinancing stack up against the competition?
Sparrow is a great way to compare multiple student loan refinance options in one place, and PenFed Credit Union’s partnership with the company speaks volumes about the platform.
But is Sparrow the best student loan marketplace available? Probably not.
While there’s a lot we like about Sparrow, some of its competitors provide a better experience. Here are three other student loan marketplaces we like more, and how they stack up against Sparrow:
Credible vs. Sparrow
Credible is a popular, well-established online loan marketplace—and it’s our choice for the best online marketplace for student loan refinance. Borrowers can refinance loan amounts as small as $1,000 with Credible; Sparrow’s lenders typically require at least $5,000 to refinance.
Both Sparrow and Credible have a limited lender network for student loan refinancing. For a complete picture of what options are available to you, you should also research the best student loan refinancing companies on your own, outside of a marketplace.
LendKey vs. Sparrow
LendKey connects student borrowers with smaller financial institutions, like community banks and credit unions, for student loans and student loan refinancing. In total, LendKey partners with more than 300 institutions; Sparrow partners with around 17.
LendKey has been around since 2009, while Sparrow entered the scene in 2020. While PenFed’s seal of approval helps its credibility, Sparrow is still relatively new to the scene.
Splash Financial vs. Sparrow
Splash Financial is another online student loan marketplace. This is a particularly good option for medical students: Splash Financial offers specialized refinancing options for medical professionals.
However, Splash Financial does not allow you to refinance with a cosigner; Sparrow does, which makes it a better option for borrowers who can’t qualify for a refinance on their own.
About our contributors
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Written by Timothy Moore, CFEI®Timothy Moore is a Certified Financial Education Instructor (CFEI®) who has been featured on USA Today, Forrester, Forbes, Business Insider, SoFi, Chime, and other leading media outlets.
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Edited by Kristen Barrett, MATKristen Barrett is a managing editor at LendEDU. She lives in Cincinnati, Ohio, with her wife and their pack of senior rescue dogs. She has edited and written personal finance content since 2015.