Pentagon Federal Credit Union is known as PenFed for short and it is a federal credit union that has its headquarters in Virginia. It is regulated by the National Credit Union Administration and is the third biggest credit union in the United States.
Founded in 1935, it now has about two million customers and caters to people in all 50 states. It is known for its competitive interest rates and attractive features like spousal loan refinancing. This review will focus on the refinancing of student loans aspect of the PenFed offering.
PenFed Student Loan Refinance Overview
|APR (fixed interest rate)||2.99% – 5.15%|
|APR (variable interest rate)||2.17% – 4.47%|
|Eligible loan types||Federal, Private, Parent PLUS|
|Refinance amount||$7,500 – $300,000|
|Repayment terms||5, 8, 12 and 15 years|
|Minimum credit score||670|
|Lender type||Direct lender|
|Good for:||Competitive fees, spousal loan refinancing|
- Competitive interest rates.
- Spousal loan refinancing.
- Reputable lender.
- Customer feedback at times not positive.
- Need a bachelor’s degree.
- Low max loan term.
The process of applying for student loan refinancing at PenFed is relatively straightforward. You will have to be a PenFed Credit Union member first of all in order to be able to proceed. All you need to do to get started is opening a savings account that has at least $5 in your own name. You will not have to pay any sort of annual fee.
To apply for the student loan refinancing program, you will need to have a good credit history. This means that you normally need a credit score that is at least 670. However, it will consider people with lower credit scores if they are able to get a co-signer. There will often be certain income thresholds that also have to be met when trying to get loans of particular sizes. There are no loan origination or application fees.
Some of the information that is necessary as part of the application process includes a Social Security number, date of birth, contact details, monthly income, employer information, and housing costs.
Terms & Requirements
PenFed definitely has some very competitive rates for its student loan refinancing packages. The options for joint spouse refinancing is a popular option, with the terms and requirements as a whole being pretty fair.
All of the credit and income requirements are very transparent at PenFed. Therefore, you know what criteria you will meet and what rates you can then get for your loan. To get a loan, you will need to have a Bachelor’s degree, so if you failed to graduate or you possess just an associate’s degree, you will be out of luck.
You will also have to be a US citizen and meet certain age criteria. If you are looking to get a loan worth up to $150,000 you need to have an income of $42,000. The income requirement drops to $25,000 if you have a co-signer who earns $42,000 or more and have a credit score of at least 720.
If you want a loan of up to $300,000 then you need an income of at least $50,000 or $25,000 if using a co-signer. The co-signer needs to have an annual income of $50,000 and a 725 or greater credit score.
The APR fixed rates will start at 2.99% at PenFed and will go up to the 5.15% mark. For the APR variable rate, these will begin at 2.17% and end at 4.47%. These rates are generally quite competitive for student loan refinancing. For the most part, there is a cap of $300,000 that you will be able to refinance, with the minimum normally being $7,500. This might be higher than what a lot of people might be trying to refinance.
People who have private education or Parent Plus loans will be able to apply for PenFed loans. Married couples are also able to refinance two of their loans into a single one. This new loan will be at a rate that covers the higher credit score of the two people, as well as joint income. Therefore, you can get the most optimal interest rate on your loan.
With PenFed, there are four main time periods with which you can get a loan – 5, 8, 12, and 15 years. These options are capped on the low side, with a lot of other lenders offering up to 25 years for you to repay the debt. The shorter terms will mean that monthly repayments will be relatively higher.
There are not really any deferment or forbearance options for PenFed loans. If someone loses their job, they will be able to work with PenFed in coming to an agreeable solution, but interest will still be accumulating.
Naturally, if you use a co-signer and you cannot meet the repayments, the co-signer will be obligated to meet the payments and their credit score will also be impacted negatively. There is a co-signer release program following a year’s worth of consecutive repayments.Get my rate
Privacy and Security
PenFed has built up a strong reputation, having been a leading credit union since starting in 1935. It is under the oversight of the National Credit Union Administration, which means that the institution is always compliant with necessary customer protection rules.
There have been some mixed reviews about customer experiences when using PenFed, but fundamentally it is a legit offering. Some of the issues relate to delays by the lender in completing its due diligence obligations. The privacy of all borrowers and their data is of utmost importance to PenFed. It has a wide range of security protocols and advanced technology in place to achieve this goal.
The PenFed customer support team is available through email or you can ring them over the phone. They generally will be reachable during the week between 9am and 7pm ET. PenFed’s Better Business Bureau (BBB) page does raise some concerns from borrowers about certain aspects of the customer service experience. After getting a loan, you can deal with the PenFed team members on a one-to-one basis if you run into any issues.
There is definitely plenty to like about the PenFed student loan refinancing offering. The interest rates tend to be competitive and you have the likes of spousal loan refinancing. There are some limits on who can get loans and there is no loan discharge or forbearance policy in place. However, PenFed has a great reputation for fairness and has been serving borrowers to great effect for many years.
7940 Jones Branch Drive
, McLean, Virginia, United States