PenFed Student Loan Review | Find the best loan for you
PenFed Credit Union has been providing refinanced student loans and refinanced parental loans since 2016 through a partnership with fintech firm Purefy. PenFed does not issue traditional student loans, but does refer clients to Sallie Mae Bank student loans.
PenFed – short for Pentagon Federal Credit Union – was founded in 1935 and has more than 2.0 million members and serves customers in all 50 states, Washington, DC and the US territories.
- No incorporation fees or registration fees.
- Spouses can refinance their loans together.
- Get a co-signer release after 12 consecutive months of on-time payments.
- Without a co-signer, the credit requirements are high.
- There are no special savings for automating payments or making consecutive on-time payments.
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PenFed refinances all types of student loans, including state, private, and state Parent PLUS loans through Purefy.
PenFed Student Loan Refinance is operated by Purefy and offers an online application process. You start by going through a pre-approval application using the Find My Rate tool, which takes about 15 minutes. You will be asked for your school background, credit history, whether you plan to be a co-signer, and other basic information.
The tool then generates the interest rates that you could claim depending on the repayment terms. If you are satisfied with any of the options, you can proceed to the official loan application.
The next step is to submit documents to verify your identity, education and income. The whole process is done online, and you can upload photos and screenshots of the requested documents, including:
- Income documents – payslip, tax returns, W-2s.
- ID – driver’s license, passport or ID card.
- Payout Verification – bank statements with projected payout amounts.
- Proof of completion – diploma or certificates.
You must also apply for PenFed membership as part of the overall loan application, but anyone is welcome to join.
After your application is received, 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, which will be processed between 3 and 14 days. You must pay your first PenFed bill 30 days after the loan disbursement date.
PenFed has no application fees, origination fees, or prepayment fees for its refinance borrowers. Borrowers have the option of choosing a term of five, eight, twelve or 15 years.
When refinancing student loans, the rates are determined by the borrower’s creditworthiness and type of degree, but the loan size has no effect.
The range of fixed APR is 2.89% to 5.08%, while variable rates are 2.13% to 4.75%. For variable rate loans, the maximum rate is 9% for five and eight year terms or 10% for 12 and 15 year loans; the minimum variable interest rate is 2%.
PenFed does not offer any programs or incentives such as B. A discount on the APR for setting up Autopay or for 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 degree or higher may qualify.
Pre-qualified applicants will be credit checked and will also need to provide documentation to prove their income.
Borrowers without co-signers applying for loans up to $150,000 must have a minimum annual income of $42,000 to qualify. If you borrow with a co-signer, you must have a minimum income of $25,000 and your co-signer must earn a minimum of $42,000. If applying for loans over $150,000, you must have an income of at least $50,000, or you must earn $25,000 along with a co-signer earning at least $50,000.
To refinance the Parent Direct PLUS loan, applicants must have a strong credit history, a reliable income, and at least one outstanding educational loan.
For all refinanced loans, the minimum loan amount is $7,500 and the maximum is $300,000.
Creditworthiness is an important factor in borrowing from 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 need a co-signer with a credit score of 720 or higher (who also meets the income requirements). .
Loans greater than $150,000: A co-signer is required for borrowers with a score between 670 and 724. That person’s score must be 725 or higher to be eligible (provided the person meets the income requirements).
Once approved, your interest rates will be determined based on creditworthiness and the type of deal.
PenFed is headquartered in Tysons, Virginia. The credit union operates nationwide and all US citizens are eligible to apply for membership and/or student loan refinance.
PenFed has an A+ rating from the Better Business Bureau but 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 related to student loans. All were closed in time.
PenFed offers telephone customer service Monday through Friday from 9:00 a.m. to 7:00 p.m. Eastern Time. Members can also contact us at any time via email or SMS. It also answers questions via Twitter. PenFed offers free advice to those interested in refinancing student loans.
PenFed does not officially offer a forbearance or forbearance program, but will work with borrowers on a case-by-case basis should an exceptional situation arise. Borrowers are encouraged to contact them immediately to work out either a repayment plan or other remedial measures if they encounter financial difficulties.
The entire refinancing application process can be completed digitally, from obtaining an interest rate quote to uploading documents and e-signing. Once the loan is paid off, you can automate your payments through your online account and monitor the progress. PenFed’s mobile app also allows you to make payments and manage your account.
- Graduates with multiple student loans looking to consolidate.
- Those who prefer an online loan process.
- Borrowers with a strong credit history and/or a co-signer.