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PenFed Review: Student Loan Refinancing at Pentagon Federal Credit Union

Pentagon Federal Credit Union (PenFed) is a credit union established in 1935. It currently has over 1.6 million members, $24 billion in assets, and serves all 50 states in as well as Okinawa, Puerto Rico, Guam, and the District of Columbia.

PenFed offers an array of banking services, including student loan refinancing with competitive rates and unique features. Looking to refinance your student loans? Read on to learn everything you need to know to find out if PenFed is right for you!

What student loan refinancing options does PenFed offer?

PenFed refinances Parent PLUS, private, and federal loans. If you qualify, you can get a new loan to replace your existing student loan or loans.


  • Loan amounts range from $7,500 to $300,000.
  • Loan terms are available for five, eight, 12, and 15 years.
  • Choose from fixed and variable interest rates.
  • Pay no origination, pre-payment, or application fees.
  • The credit union originates and services its loans.
  • Two people can refinance their loans into one loan in certain situations.
  • Membership is open to military and non-military alike.
  • All funds are federally insured by the National Credit Union Association (NCUA).
  • PenFed is an Equal Housing Lender.

Interested? The applications for PenFed’s student loan programs are processed by the financial technology and services firm, Purefy, Inc. The service allows you to apply online and get an answer in minutes.

Are you eligible for PenFed refinancing?

To qualify for a PenFed loan, you must meet the following requirements:

  • Hold a bachelor’s degree or higher.
  • Be currently employed.
  • Make an annual income of at least $42,000 for a loan up to $150,000, and at least $50,000 for loans over $150,000.
  • Have a credit score of at least 700 for loans up to $150,000 and at least 725 for loans exceeding $150,000.
  • Submit the PenFed Membership Application (which is part of the prequalification process).

If you don’t meet these qualifications, you can apply with a cosigner.

Cosigner eligibility requirements

PenFed allows for spouses to cosign loans. If your spouse is your cosigner, one spouse must have a credit score greater than 700, and the other must have a score greater than 670. Also, you must have a combined income of at least $42,000 per year.

In the case of a non-spouse cosigner, the cosigner must have a credit score over 720, and you must have a score over 670. Further, the cosigner must have an annual income of at least $42,000 per year, while you must make at least $25,000 per year.

Find out if you qualify in minutes through PenFed’s online application.

Applying to PenFed

Here’s how PenFed’s online prequalification process works.

1. Visit the website and click enter your basic information including your monthly housing expenses, annual pre-tax income, highest degree earned, and loan amount.


2. Estimate your current loans, review your loan options, and pick the best quote for you.

This step shows you your rate and term options. It also shows your new monthly payment amount, how much your payment will change, and your savings or loss over the life of the loan.

3. Create your account login credentials and security questions.

4. Provide your personal information including your identity, address, and housing details.

5. Share your education and employment details.

6. Enter the details of your current loans.

7. Read and agree to the disclosures and submit your application.

At this point, you will find out if you are preapproved to refinance your student loans with PenFed.

Completing the application process

If you get approved, you’ll need to submit the following documents to complete the application process:

  • Government-issued photo ID.
  • Paystub or tax return to prove income.
  • Payoff verification statements from existing loan servicers.
  • Copy or photo of diploma or transcripts that prove you graduated.

Once completed and approved, you’ll receive your loan. At this point, you can set up an online account to manage your loan. It can take up to two weeks for the old loan servicers to receive the money and pay off your loans. If the balance is still outstanding after 14 days, you can contact PenFed to take care of it.

Frequently asked questions

What other services does PenFed offer?

In addition to student loan refinancing, PenFed also offers the following services:

Should you refinance your student loans?

Even if you are comfortably making your payments every month, it’s worth finding out how much you could save by refinancing. And if you’re struggling to make your payments, refinancing is a great option.

But remember, if you refinance federal student loans, you will lose the benefits offered by the government. Learn more here.

There are several benefits to consider when refinancing your student loans. You may be able to lower your monthly payment, lower your overall cost, lower both, or streamline your monthly payments.

Lower your monthly payments

If lowering your monthly payment is your primary concern, you should seek out a lower interest rate than your current one, and possibly a longer loan term. While extending your loan term may increase your overall interest cost, it will also make your monthly payments more affordable.

Lower your total cost

If lowering your total cost is the primary concern, you’ll want to focus on getting a lower interest rate and the shortest loan term possible. Shorter loan terms mean higher monthly payments, but they also mean that you’ll pay less total interest over the life of the loan.

Lower both your monthly payments and your total cost

If you’d like to lower both your monthly payment and overall cost, you will want to get the lowest interest rate you can find. Further, you’ll need to select a loan term that helps you to save on your monthly payments and overall cost. It will likely be somewhere in the middle of the shortest and longest term.

PenFed makes it easy to see how each loan will impact your monthly payment and overall cost during the prequalification process. When you apply, browse your options to see if any offers make financial sense in your situation.

Streamline your payments

Lastly, if you are consolidating more than one loan into a single loan, refinancing also offers the benefit of increasing the ease of management. It’s far easier to stay on top of one monthly payment than it is to juggle several.

Is it better to refinance with a credit union?

Credit unions are a great option for any loan, including refinancing. Why? Because credit unions are not-for-profit, they often offer competitive rates and terms. However, there are no guarantees. It’s always wise to shop around with credit unions and other institutions, including banks and non-bank lenders.

Which banks offer student loan refinancing?

Browse student loan lenders here.

Is PenFed Credit Union a good fit for you?

If you decide refinancing your student loans is the right financial move for you, you’ll need to pick the lender that offers you the best deal. Here are the pros and cons of PenFed:


Here is a list of the benefits and the drawbacks to consider.

  • Competitive interest rates.
  • No fees for application, origination, or prepayment.
  • Easy online application.
  • Membership open to military and non-military.
  • NCUA-insured.
  • Allows cosigners.
  • Enables two people to refinance loans together.
  • Loan amounts up to $300,000.
  • Available in all 50 states.
  • Well-established institution.
  • Provides other services you can take advantage of as a member.
  • No advertised forbearance or deferment programs.
  • Must meet qualification requirements.
  • May not offer you the best rates.

FAQ on Pentagon Federal Credit Union

How do you qualify for PenFed Credit Union?

You can join the credit union if you serve in the United States military, for instance. You can also join PenFed’s field of membership by signing up for one of dozens of organizations, such as the Marine Corps League or the Air Force Association.

What credit score does PenFed use?

The PenFed site uses FICO’s NextGen score, which produces scores between 150-950 points. This is different from the other FICO modeling, which uses scores between 300-850.

Is PenFed Credit Union FDIC insured?

Your deposits at PenFed are federally insured by the NCUA (National Credit Union Administration). NCUA insurance is the equivalent of FDIC (Federal Deposit Insurance Corporation) insurance. The difference is that the NCUA works with credit unions while the FDIC works with banks.

How do I apply for a loan?

To apply for a loan or credit card, simply choose your product of choice from the Products menu button at the top of your screen, and then click “Get Started” to launch into your loan application. If you are already a member and have registered for PenFed Online, you can also submit your application directly from your account on PenFed Online.

How do I qualify for PenFed refinancing?

To qualify for a PenFed loan, you must meet the following requirements:

  1. Hold a bachelor’s degree or higher.
  2. Be currently employed.
  3. Make an annual income of at least $42,000 for a loan up to $150,000, and at least $50,000 for loans over $150,000.
  4. Have a credit score of at least 700 for loans up to $150,000 and at least 725 for loans exceeding $150,000.
  5. Submit the PenFed Membership Application (which is part of the prequalification process).

If you don’t meet these qualifications, you can apply with a cosigner.

Overall, PenFed is a good option. If you can qualify, PenFed may be able to help you to gain the benefits you want from refinancing. But before agreeing to any loan, be sure to do your homework. Check the rates of at least three lenders and compare the offers. Doing so will help you to improve your odds of getting a good deal.

Not sure where to start? See if you qualify for student loan refinancing using SuperMoney’s loan engine. In minutes you can compare offers from multiple vetted lenders, and it won’t hurt your credit score.

Find your best rate now.