College graduation is in the review window, you’ve got a stable job, and your credit score is on the up and up. If that describes you, then you may save a ton of coin by refinancing your student loans.
Refinancing Federal student loans means you give up benefits like income based repayments, but it’s an excellent option for people who have achieved financial stability.
If your credit score is above, and you have a full time job earning at least $42,000 per year, refinancing your student loans with PenFed Credit Union might be a good move for you.
Before you choose any lender for student loan refinancing, we recommend you compare your options with Credible. Credible allows you to see your options in 2 minutes, with no hard credit check. As a bonus for College Investor readers, you can get $200 when you refinance through Credible. Learn more here.
Here’s what you need to know about refinancing with PenFed.
PenFed Student Loans: Quick Take
Minimum Credit Score: 700 (670 with a cosigner)
APR Fixed: 3.5-7.28%
APR Variable: 2.82%-6.60%
Terms: 5-15 years
Principal Refinance Amount: $7500-$150,000
Income Requirements: $42,000 Annually (or $25,000 with a cosigner)
Who Should Consider A PenFed Refinance?
PenFed is a credit union for military members and their family, government employees, and employees in public schools. However, PenFed extends their membership to anyone willing to join an organization like National Military Family Association which costs $15 to join.
If you’re eligible to become a member, you’ll need a credit score of at least 700 to refinance the student loans on your own. You need a credit score of 670 to refinance with a cosigner who has a 700+ credit score.
Should Someone Cosign My Loans?
In general, we don’t recommend borrowing with a cosigner. Cosigning a loan means that someone else agrees to make your payments if you can’t make them yourself. While most people go into debt with the best of intentions, bad things happen.
You don’t want to put someone else in the position of having to clean up your mess. However, this rule has one major exception. If you and your spouse share finances, and your spouse has a higher credit score than you, then refinancing together makes a lot of sense.
If you need a cosigner to qualify for a loan, PenFed is a great lender for you. PenFed has a cosigner release program. If you meet income and and credit score standards, and you’ve made 12 consecutive on time payments, then you can apply for a cosigner release. This is an excellent program for spouses or parents who want to help their loved ones.
Do Other Banks And Credit Unions Offer Better Rates?
PenFed has a great calculator that you can use to calculate your expected rate based on your current credit score. Use the find my rate widget on the site to calculate the rate. You can compare the rate to those offered by some of the other major banks and refinancing companies.
Although it can be annoying, we recommend applying for loan refinances from multiple lenders to find the best rate for you. As we mentioned before, Earnest or CommonBond have better rates for people with excellent credit, and some people may not qualify for the refinance.
Consider using an online loan aggregator like LendingTree to see multiple real offers at once.
PenFed Student Loan Refinance Pros and Cons
Remember, before you make any decisions, make sure you compare your options on Credible. It just takes 2 minutes!
What do you think of PenFed and do you prefer credit unions over banks for student loan refinancing? Why or why not?