PenFed Student Loan Refinancing Review

PenFed allows students to refinance parent loans into their own name and spouses to refinance their loans together.

By Matt Carter

Written by

Writer

Matt Carter is an expert on student loans. Analysis pieces he's contributed to have been featured by CNBC, CNN Money, USA Today, The New York Times, The Wall Street Journal and The Washington Post.

Edited by Ashley Harrison

Written by

Ashley Harrison

Writer

Ashley Harrison is a Credible authority on personal finance who enjoys helping people become debt-free.

Updated April 9, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

Best if:

You want to take over parent PLUS loans
You and your spouse want to refinance your loans together
You need a cosigner to be approved

Pentagon Federal Credit Union (PenFed) has made a name for itself in student loan refinancing by not only offering competitive rates, but providing some creative options not offered by every lender.

PenFed is willing to let graduates refinance PLUS loans taken by their parents, for example, and spouses can combine their loans when refinancing. And if you need a cosigner to qualify for student loan refinancing, PenFed will consider releasing them from their obligation after you’ve made just 12 payments.

PenFed interest rates and loan details

PenFed offers fixed-rate options to borrowers refinancing up to $300,000 in private or federal student loan debt, with a choice of repayment terms ranging from five to 15 years.

PenFed Student Loan Refinancing
Rates from (APR)	Fixed:Check with lender Variable:N/A
Loan amounts	$7,500 to $300,000
Loan terms	5, 8, 12, or 15 years
Loan types	Any private or federal student loan (including parent PLUS loans)
Min. income	$42,000 to $50,000 (depending on loan amount)
Residency	Must be U.S. citizen
Transfer parent loan to child?	Yes; spouses may also refinance their loans together
Cosigner release	Applications accepted after 12 months of consecutive on-time payments
Fees	No application, origination, or disbursement fees
Prepayment penalty	None
Key benefits	Interest on variable-rate loans capped
Education	Bachelor’s degree or higher required
Loan servicer	PenFed
Best if	You want to take over parent PLUS loans You and your spouse want to refinance your loans together You need a cosigner to be approved

PenFed student loan refinancing review

PenFed is a credit union that was founded to provide services to Department of Defense employees, as well as active-duty military servicemembers and veterans. But today, anyone can join PenFed by opening up a savings account with a $5 initial deposit.

PenFed offers student loan refinancing powered by Purefy Inc., a fintech firm specializing in student loan programs. Unlike some lenders who sell your loan to investors, PenFed provides the funding and collects the payments on your loan.

How to qualify

To qualify for PenFed student loan refinancing, you’ll need to have earned at least a bachelor’s degree, and be a U.S. citizen — legal residents aren’t eligible.

Whether you’ll qualify for PenFed refinancing also depends a lot on your credit score, income, and the amount of debt you want to refinance. To qualify on your own, you’ll need a credit score of at least 700, and annual income of no less than $42,000. If you want to refinance more than $150,000 in debt without a cosigner, you’ll need a credit score of at least 725, and at least $50,000 in income.

If you can’t qualify on your own, you may be approved if you apply with a cosigner. With a cosigner, you can qualify for PenFed refinancing with a credit score as low as 670 and minimum annual income of $25,000. Your cosigner has to have a credit score of 720 or higher and earn at least $42,000.

When you apply with a cosigner or refinance with your spouse, PenFed uses the higher credit score to calculate your interest rate.

Repayment

When you refinance student loans with PenFed, you can choose to pay off your new loan over five, eight, 12, or 15 years. The lack of a 20-year option could make it hard for some borrowers with larger debt to refinance into a loan with affordable monthly payments.

Like most lenders who refinance student loans, PenFed doesn’t guarantee you’ll be granted deferment or forbearance if you have unexpected financial difficulties.

However, if you lose your job or become so ill you can’t work, PenFed says it would work with a borrower on a case-by-case basis.

How PenFed compares to other lenders

	Penfed	College Ave
Rates from (APR)	Fixed:Check with lender Variable:N/A	Fixed:6.99%+^[2]Variable:6.99%+^[2]	Fixed: 6.49%+^[1]Variable:7.02%+^[1]
Loan repayment terms (Years)	5, 8, 12, 15	5 to 15 years	5, 7, 10, 15, 20
Loan amount	$7,500 to $300,000	$5,000 to $300,000	$10,000 to $500,000 (depending on level of education)
Cosigner release?	Applications accepted after 12 months of consecutive on-time payments	Not offered for refinancing	Yes, applications accepted after 36 months of consecutive payments
Transfer parent loan to child?	Yes	No	No
Loan servicer	PenFed	University Account Service (UAS)	Firstmark Services
Best for	Refinancing student loans taken out by parent or spouse	Graduates seeking flexible loan terms	Refinancing large loan balances
All APRs reflect autopay and loyalty discounts where available \| ^[1]Citizens Disclosures \| ^[2]College Ave Disclosures \| ^[3]ELFI Disclosures \| ^[4]INvestEd Disclosures \| ^[5]ISL Education Lending Disclosures

How to refinance student loans with PenFed

PenFed has proven itself to be a great option for many borrowers seeking to lower the interest rate on their student loans. But before refinancing student loans with any company, it’s wise to shop around.

Credible lets you compare rates from many of the best student loan refinancing companies, without affecting your credit score or putting your personal information at risk.

Find out if refinancing is right for you

See Your Refinancing Options

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How PenFed can improve

PenFed offers some creative options for refinancing student loans at competitive rates. The credit union could improve by:

Providing refinancing to borrowers who didn’t earn a degree
Serving permanent U.S. residents who aren’t citizens
Offering a 20-year repayment option to borrowers who want to lower their monthly payment

Meet the expert:

Matt Carter

Matt Carter is an expert on student loans. Analysis pieces he's contributed to have been featured by CNBC, CNN Money, USA Today, The New York Times, The Wall Street Journal and The Washington Post.