PenFed student loan refinancing is a credit union option available to those looking for lower interest rates and payments on their student loans. Borrowers can refinance private, federal, spousal, or parent student loans. If a borrower has multiple loans, they can be consolidated into a single loan.

Something that sets PenFed private student loan refinancing apart from other private lenders is that other lenders tend to offer variable interest rates, but PenFed offers both fixed and variable rates. This lets borrowers choose the best option for them.

What Loan Amounts Are Accepted Through PenFed?

As for how much a borrower can obtain to refinance their student loans, PenFed hasn’t stated an exact minimum or maximum loan amount. In a February 2017 press release, PenFed President and CEO James Schenck referenced the more than $100,000 in student debt that many college graduates owe. The press release asserted that student loan debtors can consolidate that debt into a single payment through student loan refinancing.

Interest Rates With PenFed Student Loans

The interest rate for fixed and variable student loans is typically calculated using the Prime Rate. A variable rate loan tends to start out with a lower interest than a fixed rate loan, but the fluctuation in a variable rate loan can eventually lead to the interest being higher. Fortunately, PenFed says their rate will never go above 9 percent for loan terms lasting 5 to 8 years, or 10 percent for loan terms between 12 and 15 years. The exact rate also depends on the creditworthiness of the applicant or the applicant’s co-signer. A better credit rating will lead to a better rate.

What Are Your Repayment Options?

As for repayment, PenFed offers customized repayment solutions. In other words, the lender works with the borrower to establish payment terms that work. Some borrowers want to pay off their loans as fast as possible, which tends to be done through higher monthly payments over shorter terms. Others would rather pay less per month, which means it will take longer to achieve payoff.

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Something to consider is that when the payment term is shortened so the debt can be resolved as soon as possible, a lot of money is saved on interest. Which option you choose depends on what options are presented to you.

PenFed Underwriting Criteria

When applying for PenFed student loan refinancing, the applicant has to provide their driver’s license, tax return, pay stub, a transcript that verifies the receipt of a college degree, the payoff statement from the current loan servicer, and a completed application for PenFed Credit Union membership. The applicant must also be a U.S. citizen, have a great credit score, have at least one student loan that needs to be refinanced, and an income of no less than $42,000 (or $25,000 if there is a co-signer).

When starting the application process, the first step is to find the right rate by reviewing the different loan options, exploring discounts, and seeing how a co-signer can help. Once you determine what you want, you can complete the 15-minute application. Once the application is complete, you can choose the loan, submit any supporting documents, and submit the membership application. You can sign the loan documents online. From there, the process of loan disbursement begins.

PenFed Student Loan Refinancing: Pros and Cons

PenFed student loan refinancing has many advantages. The first is the fact that refinancing can save money. A high-interest student loan can be converted into a low-interest loan. Refinancing also simplifies the debt by ensuring there is one payment at a lower rate. Plus, the fact that the repayment plan can be customized means the borrower has choices. There’s even the opportunity for a co-signer to improve the interest rate. The overall process is easy.

As for the cons, the main disadvantage is that a variable interest rate can later become a high interest rate. A higher interest rate can drive up the payment to an amount that could be difficult to make. Another disadvantage might be that private student loans don’t have deferment options like federal student loans do.