PenFed Review - Student Loan Refinance

Application & Approval Process
Rates & Fees
Payment Terms
Customer Support & Benefits

About PenFed

PenFed is a student loan refinancing company which is preferred by married couples who wish to combine their student loans into a single repayable cost. The full service name is Pentagon Federal Credit Union, and it issues loans from online lender Purefy. 

The company has been out on its own since 2016. Before this time, Purefy was part of the Bank of Virginia and provided student loans as part of CordiaGrad. However, now the online lender is exclusively providing PenFed student loans.

PenFed also offers a whole host of other services. These include: 

  • Checking Accounts
  • Savings Accounts
  • Credit Cards
  • Auto Loans
  • VA Mortgages
  • First-Time Homeowner Mortgages
  • Mortgage Refinancing
  • Personal Loans
  • In-School Student Loans




  • Only soft credit checks are required for bespoke rates and deals
  • Suitable for married couples who want to have joint refinancing options
  • No longer for just the military – anyone eligible can obtain refinancing
  • Provides a range of other financial services


  • Those returning to school or going into the military cannot obtain deferment
  • Loans are not discharged if customers pass away or become disabled

Key Highlights

  • A co-signer can be released after 12 payments are made on time
  • Parent PLUS loans can be refinanced in the customer’s name
  • Loans can be offered with terms up to 15 years in duration
  • Parent loans can be transferred to child loans
  • There are no prepayment penalties
  • No application or origination fees are involved in the sign-up process

Application & Approval Process

By becoming a PenFed member, customers will be eligible to obtain products from the service. There are three stages to the membership application – Membership, Online Banking Registration and Summary. Customers should bear in mind that they will also need to be involved in the maintenance of a $5 Savings/Share Account in order to obtain PenFed membership. 

Customers should ideally fall under one of the following categories to have the best chance of qualifying for membership:

  • Be retired, honorably discharged or serving in the military
  • Be an employee of a qualifying organisation
  • Belong to a qualifying association or organisation
  • Be an employee of the United States Government
  • Live or work at an eligible location

The eligible locations, qualifying organisations and qualifying associations are listed in the drop down menu when the relevant option is selected.

Initial Quotation

Once customers have become PenFed members, they can go directly to the student loan refinancing section of the website and click on Find My Rate. At this point, customers need to enter the following information:

  • Name, email address and date of birth
  • Address, housing status and monthly housing expenses
  • Annual pre-tax income
  • Which school was attended and highest degree earned
  • Loan amount sought

Loan options will then be provided, and they will be filtered according to fixed and variable types. The information given includes the rate, term, new monthly payment and change in payment.

Those who do not qualify for loan offers will have the option to invite a cosigner to their account, which could allow them to be eligible.

In-depth Analysis

Interest rates are determined according to the credit score provided by the customer and the type of degree they have. While the annual income is factored into the DTI – or debt to income – calculations, this has no effect on the interest rate. Those who apply with a cosigner or refinance with their spouse will have the higher credit score used to calculate the interest rate. This can help customers to save a higher amount on their student loans.


Those who do not finish their applications will have them saved on the platform for 30 days. Once the application is submitted and the initial credit check has been processed, the information will be kept on file for 60 days. 

Customers can check the status of their loan by calling customer service and speaking with a loan advisor. Alternatively, they can log in online to check their dashboard. 

Initial credit reviews consider information provided in the application. This includes income, degree, school and the credit report of the customer. Once the credit review has been passed, the customer must provide documentation to support this information. Documentation which qualifies is as follows:

  • Income verification, such as a tax return or payslip
  • Photo ID, which can be a driver’s license, passport or ID card issued by the state
  • Payoff Verification Statements from the existing providers
  • Graduation verification in the form of a copy or photo of the customer’s diploma or transcripts
  • PenFed Membership Application, which is included in the application following pre-approval


PenFed provides an application form for student loan refinancing which is shorter than most. However, PenFed membership must be obtained prior to signing up for this service.

The agreement will be provided for those who have a minimum credit score of 670 and a maximum debt to income ratio of 35% for undergraduate degree applicants, or 40% for graduate degree applicants. 

Those who have filed for bankruptcy can also qualify if the bankruptcy was 10 or more years ago. Furthermore, those with a recent bankruptcy on their record can qualify if they have a co-signer who meets the credit, income and debt to income requirements.

Rates & Fees

  • Rates and fees are calculated based on the information provided in a customers’ application
    • Fixed: 2.99% – 5.20%
    • Variable: 2.16% – 4.46%
  • The minimum loan amount is $7500, and the maximum amount is $300,000
  • Those with loans over $150,000 will need a cosigner if their credit score is in the 670-724 range
  • A cosigner will also be required in these circumstances if the customer’s annual income is between $25,000 and $49,999
  • The cosigner in this situation will need an annual income of at least $50,000, along with a credit score of 725 or above
  • The annual income requirement for individual applicants is $42,000 for loans up to $150,000, while a cosigner can be used in order to make the income requirement $25,000
  • Those who want a loan over $150,000 will need to earn $50,000 or more. Again, with a cosigner, the income requirement becomes $25,000

Payment Terms

  • Payment terms can be 5 years, 8 years or 12 years. Customers should bear in mind that the 12 year term loans are priced higher in order to account for the interest rate risk
  • Interest is calculated as simple daily interest, which means the outstanding principal balance is multiplied by the interest rate and divided by a year comprising 365 days in order to calculate what the interest is for that day
  • There are no fees associated with making larger payments exceeding the minimum amount using autopay
  • Biweekly payments via autopay are permitted

Customer Support & Benefits

  • There is a help center available on the PenFed site which provides answers to frequently asked questions
  • There is also a Learn section which features articles across all products and services to enhance the customer’s financial knowledge
  • The customer service team is available via email, phone, online messaging and post




Contact Details 

Phone: 724-473-6333 or 1-800-247-5626

Email: [email protected] 

Post: PenFed Credit Union, P.O. Box 247009, Omaha, NE 68124-7009




Related Reviews





Very Good




Very Good