PenFed Student Loan Refinancing: Is It Right for You?

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PenFed student loans

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Roughly seven out of 10 students who graduated from four-year colleges in recent years have student loans. But just because you have them doesn’t mean they have to be expensive.

With the PenFed student loan refinancing program, you might be able to get a lower interest rate or monthly payment. Here’s how refinancing with PenFed Credit Union could help you pay down your student loan debt more quickly and with less interest.

PenFed Credit Union review

Established in 1935, Pentagon Federal Credit Union serves over 1.5 million members. People who join enjoy member discounts on home, auto, financial, and other services.

PenFed primarily serves government employees and military personnel, but you don’t have to belong to either group to join.

How to join PenFed Credit Union

Like any other credit union, PenFed has certain eligibility requirements to become a member. The good news is you can bypass those requirements if you apply for its student loan refinancing program.

After you’re preapproved, you’ll fill out a membership form as part of the underwriting process.

PenFed student loan refinancing program review

Here’s what you need to know about the student loan refinancing program through PenFed.

Student loan refinancing terms

To be eligible for the program, you must meet some basic requirements:

  • Be a U.S. citizen
  • Be at least the age of majority in your state
  • Be the borrower on at least one outstanding education loan
  • Have a bachelor’s degree or higher
  • Have a strong credit history
  • Have an annual income of at least $42,000 (or $25,000 with a co-signer)

You can refinance private and federal student loans with PenFed. The credit union offers only fixed APRs, and you can refinance $7,500 to $150,000 in student loans. PenFed doesn’t charge any application, origination, or prepayment fees.

Your APR will depend on your creditworthiness (or that of your co-signer) as well as which of the following repayment periods you choose for your PenFed student loans:

PenFed student loans

If both you and your spouse have student loans, you can combine them in a couple loan. When you apply for a couple loan, PenFed combines your incomes and bases your interest on the higher of your two credit scores.

Adding a co-signer

Adding a co-signer with good or excellent credit can increase your chance of getting a lower interest rate. If your credit score is 670 to 699, a co-signer is required.

If you’re adding a co-signer to your application, he or she must meet the following requirements:

  • Be a U.S. citizen
  • Be at least the age of majority in your state
  • Be employed at least two years
  • Meet co-signer credit requirements

After 12 months of consecutive on-time payments, you can apply to have PenFed remove your co-signer from the loan. At that time, PenFed will re-evaluate your financial and credit profile to make sure you qualify for a co-signer release.

Deferment and forbearance

PenFed doesn’t offer a set deferment or forbearance policy. But it does work with borrowers on a case-by-case basis during times of economic hardship. Plus, there’s no maximum forbearance allowance in terms of months. Many other refinancing lenders offer only up to 12 months.

Other extraordinary circumstances might apply (e.g., losing a job, an illness, or a death in the family) if you’re looking for assistance with your PenFed student loan payments

Just remember: If you get approved for forbearance, interest will continue to accrue during the forbearance period.

Pros and cons of PenFed student loan refinancing

If you’re interested in the PenFed student loan refinancing program, there are some key benefits and drawbacks to consider.


Co-signer release policy: Co-signers are jointly responsible for the student loan debt. So, co-signing a student loan can be risky for both the co-signer and the primary borrower. PenFed’s co-signer release policy can help resolve any long-term concerns.

Competitive rates: All PenFed’s rates are fixed and competitive with other fixed rates on the market. What’s more, you won’t have to worry about your interest rate changing over time like variable interest rates do.

More inclusive: Some other student loan refinancing lenders, such as Navy Federal Credit Union, accept only private student loans. With PenFed, you can refinance both private and federal loans.

Couple loans: The credit union’s spouse loan makes it possible for couples to save money on their student loans without having to refinance separately.


High income and credit requirements: PenFed requires an annual income of at least $42,000 and a credit score of at least 700 to apply without a co-signer. Even with a co-signer, you must earn at least $25,000 and have a 670 credit score or higher to qualify.

Some other refinancing programs have no minimum income requirements or require as little as $24,000 annually.

No autopay discount: Some refinancing programs offer a 0.25% rate discount if you sign up for automatic payments. PenFed, however, doesn’t offer this or any other type of rate discount.

No deferment and unclear forbearance options: If you head to graduate school, you won’t get a deferment on your payments during that time. And if you do qualify for forbearance, it might not be favorable.

Applying for PenFed student loan refinancing

To find out what kind of rate you qualify for, you first need share with PenFed your highest degree, your approximate credit score, and your email address.

Next, you can provide more information about your current loans, select a term, and view what APR you might qualify for if you apply solo or with a co-signer.

The good new is inputting this information to figure out your rate does not affect your credit in any way because you don’t give PenFed or PenFed your Social Security number.

After you go through that process (or if you want to skip it altogether), you can apply online. You’ll need to create a student lending profile so you can log in to see your application.

Once you get to the application stage, you’ll provide the following information:

  • Name, address, and phone number
  • Citizenship status
  • Social Security number
  • Driver’s license, passport, or state ID information
  • PenFed membership status
  • Housing status and monthly housing payment
  • Information about your college and degree
  • Employment and income information
  • References (name, address, phone number, and relationship to you)
  • Co-signer information
  • Details about your loan(s)

You’ll then consent to e-sign certain documents and agree to disclosures and terms and conditions. After that, you can submit your application.

When you apply, PenFed will run a credit check, which will trigger a hard inquiry on your credit report. If you apply with a co-signer, the same will happen with his or her credit report.

After you apply, PenFed will request the following documents to verify your information:

  • A copy of your driver’s license, passport, or state ID
  • A pay stub or tax return
  • A college transcript or copy or photo of your diploma
  • A payoff statement from your current student loan servicer
  • A PenFed membership application (if you’re not already a member)

Should you apply for the PenFed student loan refinancing program?

If you meet PenFed’s income and credit score requirements, its program is worth considering. Its fixed interest rates, co-signer policy, and options for couples make it a competitive option against the top refinancing banks.

If you plan to go back to school, though, you might want to choose a program that has a deferment policy. Also, if you have federal student loans, keep in mind that you’ll lose access to student loan forgiveness and income-driven repayment plans if you refinance through PenFed.

To make sure PenFed is right for you, shop around and compare rates and other features. With time and research, you’ll find the best student loan refinancing program for you.

Interested in refinancing student loans?

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.