PenFed Student Loans Review | Find the best loan for you

PenFed Credit Union has been offering refinanced student loans and refinanced parent loans since 2016 through a partnership with fintech company Purefy. PenFed does not originate traditional student loans, but directs customers to student loans issued by Sallie Mae Bank.

Founded in 1935, PenFed – which is short for Pentagon Federal Credit Union – has over 2.0 million members and serves customers in all 50 states, Washington, DC and US territories.

  • No set-up fees or application fees.
  • Spouses can refinance their loans together.
  • Get a co-signer release after 12 consecutive months of on-time payments.

  • Credit requirements are high without a co-signer.
  • There are no special savings for automating payments or making consecutive payments on time.

Find the best student loan refinance lenders

PenFed refinances all types of student loans, including federal, private, and federal Parent PLUS loans through Purefy.

PenFed student loan refinance is powered by Purefy and offers an online application process. You’ll start by going through a pre-approval request, which takes about 15 minutes, using the Find My Rate tool. You will be asked questions about your education history, credit score, whether you plan to have a co-signer, and other basic information.

The tool will then generate the interest rates you may be entitled to based on the repayment terms. If you are satisfied with one of the options, you can proceed with the formal loan application.

The next step is to submit documents to verify your identity, education, and income. The process is done entirely online and you can upload photos and screenshots of the requested documents, which will include:

  • Income documents – pay stub, tax return, W-2.
  • Identification – driver’s license, passport or identity card.
  • Earnings verification – service records with projected earnings amounts.
  • Verification of graduation – diploma or transcripts.

You will also need to apply for PenFed membership as part of the overall loan application, but anyone is allowed to join.

Once your application has been submitted, you can check the status of the loan at any time by logging into your PenFed account. If you are approved, PenFed will send payments to close your existing loans, and this will be processed between three and 14 days. You will be required to pay your first PenFed bill 30 days after the loan disbursement date.

PenFed does not have an application fee, origination fee, or prepayment fee for its refinance borrowers. Borrowers have the option of choosing a repayment term of five years, eight years, 12 years or 15 years.

For student loan refinancing, rates are determined by the borrower’s credit and degree type, but the loan amount has no impact.

The fixed annual percentage rate range is 2.89% to 5.08%, while the variable rates are 2.13% to 4.75%. For variable rate loans, the maximum they can reach is 9% for terms of five and eight years, or 10% for loans of 12 and 15 years; the minimum variable rate is 2%.

PenFed does not offer any programs or incentives, such as an APR discount for setting up autopay or for making a certain number of consecutive payments.

US citizenship is required for all borrowers and co-signers, and borrowers must be employed. Beginning August 4, borrowers with an associate’s degree or above may qualify.

Prequalified applicants will have their credit checked and will also be required to submit documents to verify their income.

Borrowers without a co-signer applying for loans up to $150,000 must have an annual income of at least $42,000 to qualify. If you are borrowing with a co-signer, you need a minimum income of $25,000 and your co-signer must earn at least $42,000. If you are applying for loans over $150,000, you need at least $50,000 in income, or you must earn $25,000 with a co-signer earning at least $50,000.

For Parent Direct PLUS loan refinance, applicants need a strong credit history, reliable income, and at least one current college loan.

For all refinanced loans, the minimum loan amount is $7,500 and the maximum is $300,000.

Credit score is an important factor in borrowing with PenFed and in many cases a co-signer may be required. Here’s how it breaks down.

Loans up to $150,000: If your credit score is between 670 and 675 (or you don’t meet the income criteria), you’ll need a co-signer with a credit score of 720 or higher (which also meets income requirements).

Loans over $150,000: For borrowers with scores between 670 and 724, you will need a co-signer. This person’s score must be 725 or higher for approval (assuming the person meets the income requirements).

After approval, your interest rates will be determined based on credit score and degree type.

PenFed is headquartered in Tysons, Virginia. The credit union operates nationwide and all US citizens can apply for student loan membership and/or refinance.

PenFed has an A+ rating with the Better Business Bureau, but it is not accredited. PenFed has a rating of 4.6 out of 5 on TrustPilot. In 2020, the Consumer Financial Protection Bureau received four complaints about PenFed regarding student loans. All were closed in a timely manner.

PenFed offers telephone customer service Monday through Friday, 9:00 a.m. to 7:00 p.m. Eastern Time. Members can also contact by email or SMS at any time. He also answers questions via Twitter. PenFed offers free consultations for those interested in student loan refinancing.

PenFed does not officially offer a deferment or forbearance program, but will work with borrowers on a case-by-case basis in extraordinary circumstances. Borrowers are encouraged to get in touch immediately to set up a repayment schedule or other recourse if they are facing financial hardship.

The entire refinance application process can be completed digitally, from obtaining a quote, to uploading documents, to signing electronically. Once the loan is disbursed, you can automate your payments through your online account and track progress. You can also make payments and manage your account using PenFed’s mobile app.

  • Graduates with multiple student loans who wish to consolidate.
  • Those who prefer an online loan process.
  • Borrowers with strong credit and/or a co-signer.

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