Review of PenFed Student Loans Find the best loan for you
PenFed Credit Union has been the originator of refinanced student loans and refinanced parent loans since 2016 through a partnership with fintech company Purefy. PenFed is not the originator of traditional student loans, but directs clients 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 clients in all 50 states, Washington, DC, and the U.S. Territories.
- No origination fees or administration fees.
- Spouses can refinance their loans together.
- Obtain a co-signer release after 12 consecutive months of one-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 Refinancing is powered by Purefy and offers an online application process. You’ll start by making a pre-approval request, which takes about 15 minutes, using the Find My Rate tool. You will be asked about your educational background, your credit score, if you plan to have a co-signer and other basic information.
The tool will then generate the interest rates you might be entitled to based on the repayment terms. If you are happy with any of the options, you can go ahead with the formal loan application.
The next step is to submit documents to verify your identity, education, and income. The process is done 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 state ID.
- Earnings Verification – Service agent statements 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 is filed, you can check the loan status 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 need to pay your first PenFed bill 30 days from the date the loan is disbursed.
PenFed has no administration, set-up or early repayment fees for its refinanced borrowers. Borrowers have the option of choosing a repayment term of five years, eight years, 12 years or 15 years.
For student loan refinancing, the rates are determined based on 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 program or incentive, such as an APR discount for setting up automatic payment or for making a number of consecutive payments.
U.S. citizenship is required for all borrowers and co-signers, and borrowers must be employed. As of August 4, borrowers with an associate’s degree or above may be eligible.
Prequalified applicants will have their credit checked and will also need to submit documents to verify their income.
Borrowers without a co-signer applying for loans of up to $ 150,000 must have an annual income of at least $ 42,000 to be eligible. 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 income of at least $ 50,000, or you must earn $ 25,000 with a co-signer earning at least $ 50,000.
For Parent Direct PLUS loan refinancing, applicants need a solid credit history, reliable income, and at least one current student 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 is how it breaks down.
Loans up to $ 150,000: If your credit score is between 670 and 675 (or if you don’t meet the income criteria), you’ll need a co-signer with a credit score of 720 or higher (who also meets income requirements).
Loans over $ 150,000: For borrowers with a score 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 your credit score and type of degree.
PenFed is headquartered in Tysons, Virginia. The credit union operates nationwide and all U.S. 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 relating to student loans. All were closed on time.
PenFed offers customer service over the phone Monday through Friday, 9 a.m. to 7 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 to those interested in refinancing student loans.
PenFed does not officially offer a deferral or forbearance program, but will work with borrowers on a case-by-case basis should an extraordinary situation arise. Borrowers are encouraged to get in touch immediately to establish a repayment schedule or other recourse if they are facing financial difficulties.
The entire refinancing application process can be completed digitally, from obtaining a quote to downloading documents to electronic signature. 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 the PenFed mobile app.
- Graduates with multiple student loans who wish to consolidate.
- Those who prefer an online loan process.
- High credit borrowers and / or co-signer.