Review: Should You Refinance PenFed Student Loans?

Refinancing rates from 2.41% APR. Checking your rates won’t affect your credit score.

Roughly seven out of 10 students who graduated from four-year colleges in recent years have student loans. But just because you have them doesn’t mean they have to be expensive.

With the PenFed student loan refinancing program, powered by Purefy, you might be able to get a lower interest rate or monthly payment. Here’s how refinancing with PenFed Credit Union could help you pay down your student loan debt more quickly and with less interest.

PenFed Credit Union review

Established in 1935, Pentagon Federal Credit Union serves over 1.5 million members. People who join enjoy member discounts on home, auto, financial, and other services.

PenFed primarily serves government employees and military personnel, but you don’t have to belong to either group to join.

How to join PenFed Credit Union

Like any other credit union, PenFed has certain eligibility requirements to become a member. The good news is you can bypass those requirements if you apply for its student loan refinancing program.

After you’re preapproved, you’ll fill out a membership form as part of the underwriting process.

PenFed student loan refinancing program review

Here’s what you need to know about the student loan refinancing program through PenFed.

Student loan refinancing terms

To be eligible for the program, you must meet some basic requirements:

  • Be a U.S. citizen
  • Be at least the age of majority in your state
  • Be the borrower on at least one outstanding education loan
  • Have a bachelor’s degree or higher
  • Have a strong credit history
  • Have an annual income of at least $42,000 (or $25,000 with a co-signer)

You can refinance private and federal student loans with PenFed. The credit union offers only fixed APRs, and you can refinance $7,500 to $300,000 in student loans. PenFed doesn’t charge any application, origination, or prepayment fees.

Your APR will depend on your creditworthiness (or that of your co-signer) as well as which of the following repayment periods you choose for your PenFed student loans.


If both you and your spouse have student loans, you can combine them in a couple loan. When you apply for a couple loan, PenFed combines your incomes and bases your interest on the higher of your two credit scores.

Adding a co-signer

Adding a co-signer with good or excellent credit can increase your chance of getting a lower interest rate. If your credit score is 670 to 699, a co-signer is required.

If you’re adding a co-signer to your application, he or she must meet the following requirements:

  • Be a U.S. citizen
  • Be at least the age of majority in your state
  • Be employed at least two years
  • Meet co-signer credit requirements

After 12 months of consecutive on-time payments, you can apply to have PenFed remove your co-signer from the loan. At that time, PenFed will re-evaluate your financial and credit profile to make sure you qualify for a co-signer release.

Deferment and forbearance

PenFed doesn’t offer a set deferment or forbearance policy. But it does work with borrowers on a case-by-case basis during times of economic hardship. Plus, there’s no maximum forbearance allowance in terms of months. Many other refinancing lenders offer only up to 12 months.

Other extraordinary circumstances might apply (e.g., losing a job, an illness, or a death in the family) if you’re looking for assistance with your PenFed student loan payments

Just remember: If you get approved for forbearance, interest will continue to accrue during the forbearance period.

Pros and cons of PenFed student loan refinancing

If you’re interested in the PenFed student loan refinancing program, there are some key benefits and drawbacks to consider.


Co-signer release policy: Co-signers are jointly responsible for the student loan debt. So, co-signing a student loan can be risky for both the co-signer and the primary borrower. PenFed’s co-signer release policy can help resolve any long-term concerns.

Competitive rates: PenFed offers fixed and variable rates that are competitive with other rates on the market. If you choose a fixed rate, you won’t have to worry about your interest rate changing over time like variable interest rates do.

More inclusive: Some other student loan refinancing lenders, such as Navy Federal Credit Union, accept only private student loans. With PenFed, you can refinance both private and federal loans.

Couple loans: The credit union’s spouse loan makes it possible for couples to save money on their student loans without having to refinance separately.


High income and credit requirements: PenFed requires an annual income of at least $42,000 and a credit score of at least 700 to apply without a co-signer. Even with a co-signer, you must earn at least $25,000 and have a 670 credit score or higher to qualify.

Some other refinancing programs have no minimum income requirements or require as little as $24,000 annually.

No autopay discount: Some refinancing programs offer a 0.25% rate discount if you sign up for automatic payments. PenFed, however, doesn’t offer this or any other type of rate discount.

No deferment and unclear forbearance options: If you head to graduate school, you won’t get a deferment on your payments during that time. And if you do qualify for forbearance, it might not be favorable.

Applying for PenFed student loan refinancing

To find out what kind of rate you qualify for, you first need share with PenFed your name, date of birth, address, income, highest degree, and your email address.

Next, you can view what APRs and terms you qualify for. If you would like to see if you could save more by adding a cosigner, you can invite them to join you on the application.

The good news is inputting this information to figure out your rate does not affect your credit in any way because you don’t give PenFed your Social Security number.

After you go through that process (or if you want to skip it altogether), you can apply online. You’ll need to create a student lending profile so you can log in to see your application.

Once you get to the application stage, you’ll provide the following information:

  • Name, address, and phone number
  • Citizenship status
  • Social Security number
  • Driver’s license, passport, or state ID information
  • PenFed membership status
  • Housing status and monthly housing payment
  • Information about your college and degree
  • Employment and income information
  • Co-signer information, if applicable
  • Details about your loan(s)

You’ll then consent to e-sign certain documents and agree to disclosures and terms and conditions. After that, you can submit your application.

When you apply, PenFed will run a credit check, which will trigger a hard inquiry on your credit report. If you apply with a co-signer, the same will happen with his or her credit report.

After you apply, PenFed will request the following documents to verify your information:

  • A copy of your driver’s license, passport, or state ID
  • A pay stub or tax return
  • A college transcript or copy or photo of your diploma
  • A payoff statement from your current student loan servicer
  • A PenFed membership application (if you’re not already a member)

Should you apply for the PenFed student loan refinancing program?

If you meet PenFed’s income and credit score requirements, its program is worth considering. Its fixed interest rates, co-signer policy, and options for couples make it a competitive option against the top refinancing banks.

If you plan to go back to school, though, you might want to choose a program that has a deferment policy. Also, if you have federal student loans, keep in mind that you’ll lose access to student loan forgiveness and income-driven repayment plans if you refinance through PenFed.

To make sure PenFed is right for you, shop around and compare rates and other features. With time and research, you’ll find the best student loan refinancing program for you.

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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