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Founded in 1935, the Pentagon Federal Credit Union, generally known as PenFed, is a large financial institution with branches across the U.S. and on military bases around the world. While PenFed does cater to those in military service and their families, its membership isn’t limited: Anyone can join the credit union and use its variety of banking products and services.

PenFed is well-known for its student loans, offered by a third party, Sallie Mae, and its student loan refinancing program, which it does directly finance and administer.

Continue reading to learn about PenFed’s loan rates and terms. 

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  • Spousal loan refinancing

  • Transparent income and credit requirements

  • Generous cosigner release policy

  • Competitive interest rates


  • Bachelor’s degree required

  • Limited loan terms

  • Restrictions apply on loan amounts

  • No official forbearance or discharge policy

Pros Explained

  • Spousal loan refinancing: PenFed Credit Union is the only direct lender to allow couples to jointly refinance their loans. For couples consisting of one non-working spouse, or where one person earns significantly more than the other, a spousal loan can be very helpful, since the lender looks at the couple’s combined income rather than the individual’s earnings. 
  • Transparent income and credit requirements: PenFed openly states its income and credit requirements, so borrowers and cosigners will know if they meet the lender’s criteria before they apply. 
  • Generous cosigner release policy: Cosigners on PenFed loans may be eligible to be removed after just 12 months of consecutive, on-time monthly payments. In contrast, many lenders require three to four years of payments before cosigners can apply for release, and some don’t offer release at all.
  • Competitive interest rates: PenFed’s rates start as low as 2.13% for variable-rate loans, and 2.89% for fixed-rate loans. And the range on both APRs is just about two percentage points.

Cons Explained

  • Bachelor’s degree required: To qualify for a loan, applicants must have at least a B.A. or B.S. If you didn’t graduate or have only an associate’s degree, you are not eligible for a loan. 
  • Limited loan terms: While some lenders offer you 20 or 25 years to repay, the longest PenFed Credit Union offers is 15 years. Shorter loan terms generally mean higher monthly payments. 
  • Restrictions apply on loan amounts: Unlike some lenders, PenFed does set limits on how much you can refinance. The maximum is $300,000, and there’s also a minimum of $7,500, which is a bit high.
  • No official forbearance or discharge policy: PenFed does not have set procedures in place for borrowers experiencing financial hardship. 

PenFed Credit Union Refinancing Loans Available

PenFed allows both college graduates and parents to refinance student loans.

Student Loan Refinancing

If you have a bachelor’s degree or master’s degree, you can qualify for student loan refinancing from PenFed. You can refinance up to $300,000 and have up to 15 years to repay. 

If you’re married, you can also take advantage of spousal loan refinancing. PenFed Credit Union is the only lender to allow married people to refinance their loans together. Or, one partner can take over the other’s loans, transferring them into their own name. 

Parent Loan Refinancing

If you took out student loans to pay for your child’s education, you can refinance them through PenFed. 

PenFed also allows your child to apply for student loan refinancing and assume a parent loan in their name, removing your obligation to repay.

Loan Eligibility

To qualify for student loan refinancing through PenFed Credit Union, you must meet the following criteria: 

  • Be a U.S. citizen 
  • Have a bachelor’s degree or higher
  • Be the age of majority in your state
  • For loans up to $150,000, your income must be at least $42,000, or $25,000 with a cosigner; your cosigner must earn at least $42,000 per year and have a credit score of 720 or higher
  • For loans up to $300,000, your income must be at least $50,000, or $25,000 with a cosigner; your cosigner must earn at least $50,000 per year and have a credit score of 725 or higher
  • Have at least $7,500 in student loans to refinance

Is Loan Prequalification Available?

You can use PenFed’s prequalification tool to check your rates. Getting a quote will not affect your credit score. 

Loan Fees

PenFed does not charge application fees, origination fees, or prepayment penalties. 

Loan Discounts

PenFed does not offer any loan discounts, such as an automatic payment discount or loyalty discount. 

Are Cosigners Required?

While a cosigner isn’t required, you may need one if your credit score is between 670 and 699 and your annual income is between $25,000 and $49,999. Having a cosigner can help you qualify for a loan and get a lower interest rate. 

You can request a cosigner release after 12 months of consecutive, on-time monthly payments. 

Forbearance and Loan Discharge Options

PenFed does not have a clear forbearance or discharge policy. However, it does encourage borrowers to contact customer service to discuss options if they are facing financial hardship or another emergency. 

Length of Time for Loan Approval and Disbursement

According to PenFed, it can take up to 14 days for your old loan servicer to receive the loan payoff funds and apply the money to your previous student loans. If your account isn’t cleared after 14 days, contact PenFed for a status update. 

Customer Service

PenFed is both the lender and loan servicer for its refinanced student loans. PenFed has a 4.4 out of 5 TrustScore on Trustpilot from a handful of customer reviews.

You can reach customer service via email at or by calling 202-888-4320. Its hours of operation are Monday through Friday, from 9:00 a.m. to 7:00 p.m. ET. 

Applying for a PenFed Credit Union Refinanced Student Loan

You’ll need to have the following information handy to apply for a loan from PenFed: 

  • Social Security number
  • Date of birth
  • Phone number
  • Email address
  • Current address
  • Monthly income
  • Housing costs
  • Employer information
  • Current loan payoff statement
  • Loan account number


As student loan refinancers go, PenFed Credit Union has a lot to offer. Its requirements, policies, and terms are clear and openly stated. Not only are its interest rates competitively low, but their range is also impressively short: just about two percentage points between the lowest and the highest APR (none of those 12-point ranges that tease you with a low rate but end up giving you a double-digit one).

Then there are its unique features, like the spousal loan refinancing, which lets a couple combine all of their debt into one big loan. And other generous features, like letting parents transfer the loans they’ve taken out for their kid into the child’s name.

In return for its largesse, PenFed does set some limits regarding loan minimums and maximums, graduation status, and income and cosigner requirements. However, cosigners can be freed from their obligation in as little as 12 months, which is highly generous. The lack of an official forbearance or loan discharge policy gives pause, especially given the credit union’s transparency, but there’s no reason to doubt it would be willing to work with members in distress.

The larger question is the idea of refinancing in general. While refinancing your student loans can help you save money and pay off your debt sooner, there are some drawbacks to consider, especially if you have federal student loans. If you do decide to refinance, strong as PenFed Credit Union is, it’s still wise to shop around and compare rates and terms from other lenders. To help you get started, we identified the top student loan refinance companies of 2021.


Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders, and refinancing lenders. We collected over 45 data points across more than 15 lenders—including interest rates, fees, loan amounts, and repayment terms—to ensure that our content helps users make the right borrowing decision for their education needs.