PenFed Student Loan Refinance Program

If the interest rates of your current student loans are too overwhelming, or you want to refinance your student loans- federal or private, check out the PenFed Student Loan Refinance program.

Updated by C Laltlanhlua on 9th July 2019

If the interest rates on your current federal student loans or your private student loans from the traditional banks are too high for you, or if you are not satisfied with the services you get from these banks, then credit unions are an alternative option for you. The U.S. credit unions are not-for-profit organizations that usually provide services to specific communities. Unlike banks, who call their clients customers, clients of credit unions become partners or members of the organization.

Credit Unions are under the regulation and moderation of either the federal government through the federal credit union or the state government. They provide financial services such as car loans, house mortgages, loan refinancing, etc. to their members and direct family of their members. The membership for every credit union is restricted to a particular community or niche that they were established to serve.

List of Contents

Pentagon Federal Credit Union at a glance

Pentagon Federal Credit Union, widely known by its abbreviated name PenFed, is a federal credit union established in 1935. It is currently based in McLean, Virginia and is authorized and managed by the National Credit Union Administration (NCUA). It is the second-largest federal credit union with assets worth 25 billion U.S. dollars. It mostly served government workers and people with secure jobs. As of May 2019, registration for membership has been opened with no eligibility criteria.

Although PenFed does not offer student loans directly, they do offer a wide range of options to refinance student loans with them. This way, they will pay off some or all of the student loans you are currently in debt of. In return, they will set up a new refinance loan for you under their organization. This will give you a chance to get lower interest rates, change your repayment plans, reduce or increase your repayment period, etc..

Currently, their refinancing service allowing married couples to refinance their student loans together stands out.

Refinancing Options for Student Loans

PenFed provides student loan refinancing for the PenFed members and others willing to join the membership. The refinance loan application process is simplified and one can apply online with no origination fee and prepayment fees. The refinancing options for student loans that they provide include the following.

  • Refinancing a single or multiple federal student loans

  • Refinancing a single or multiple private student loans

  • Refinancing federal and private student loans together into a single loan

  • Refinancing Parents PLUS Loans with an option to transfer the loans from parents to their children through the PenFed Parents PLUS Loan refinance program

  • Refinancing student loans of married couples under one loan

  • Refinancing to take over spouse's loan

Eligibility Criteria

For Applicants

The following are the basic criteria that an applicant should qualify to apply for a loan in PenFed.

1 - Minimum Age

Applicants must be the age of majority as defined by the state of their state of residence.

2 - Minimum Credit Score or Minimum Annual Income

The applicants must qualify for either the credit score criteria or the annual income criteria. The need for a cosigner will be determined accordingly as shown in the table given below.

Loan Amount Credit Score Annual Income Need for Cosigner
Up to $150,000 670 to 699 $25,000 to $41,999 Required
Up to $150,000 700 and above $42,000 and above Not required
Above $150,000 670 to 724 $25,000 and $49,999 Required
Above $150,000 725 and above $50,000 and above Not required

3 - Citizenship

At this point in time, only U.S Citizens are eligible for PenFed loans.

4 - Graduation

Applicants must have a bachelor's degree or higher. This refinancing program is not offered to an individual who is still in school.

5 - Existing Loan

Applicants must have at least one active, fully disbursed student loan of $7,500 or more.

6 - Membership

Applicants must be an existing PenFed member or are willing to be a member.

For Cosigner

The following are the basic criteria that a cosigner should qualify to sign for an applicant.

1 - Minimum Age

The cosigner must be the age of majority as defined by the state of their state of residence.

2 - Minimum Credit score and Minimum Annual Income

The applicants must qualify for either the credit score criteria or the annual income criteria.

Loan Amount Credit Score Annual Income
Up to $150,000 720 and above $42,000 and above
Above $150,000 725 and above $50,000 and above

3 - Citizenship

Only U.S Citizens are eligible to cosign for applicants.

For a married couple, one must have a credit score of 700 or above and the other must have 670 and above with a combined annual income of $42,000 and above. For loans above $150,000, one must have a credit score of 725 and above and the other must have a 670 an above with a combined annual income of $50,000 and above.

Application Process

To apply for PenFed Student Loan Refinance Program, you must first go through a pre-approval stage or the initial credit review stage of the application process. At this stage, your identity verification and credit checking will be done. Along with that, your current situation will be taken into consideration to calculate your eligibility, the amount of loan you qualify for, and the interest rates and terms, etc..

Go to the PenFed Student Loan Refinance Program webpage and click on the Find my Rate button to start. After the pre-approval stage, you will be given 60 days to upload all necessary documents and complete your application for the program.

Documents required after pre-approval

  • Income Verification

  • Government-issued photo ID

  • Payoff Verification Statement

  • A graduation certificate - transcript, degree, diploma, or certificate, etc.

  • Membership Application

Payoff Verification Statement - It is a statement from your current lender or servicer stating the exact amount for a payoff for a selected date which includes the loan balance, interest accruing till the day of the payoff, and any fees and charges.

Terms and Interest Rates

The interest rate or the APR(Annual Percentage Rate) is calculated solely on the basis of your credit score, the degree or course that you completed and the presence of a cosigner. Your income or the amount of loan to be refinanced has zero effect on your interest rates whatsoever. PenFed Student Loan Refinance Program will accrue your interest on a simple daily basis.

For Fixed APR

The Fixed APR is capped at 7.03%. The table below shows an estimate of the lowest APR for the different available terms for a $10,000 loan. The actual APR for an applicant will be calculated on a case-to-case basis as stated above.

Term No. of
Lowest APR Est. Payments
5 years 60 3.87% $184
8 years 96 4.59% $125
12 years 144 4.79% $91
15 years 180 4.95% $79

For Variable APR

The Variable APR is floored at 2% and capped at 9% for a 5-year term and an 8-year term, and capped at 10% for a 12-year term and a 15-year term. The table below shows an estimate of the lowest APR for the different available terms for a $10,000 loan. The actual APR for an applicant will change according to the fluctuations in the market conditions.

Term No. of
Lowest APR Est. Payments
5 years 60 3.05% $180
8 years 96 3.88% $121
12 years 144 4.66% $91
15 years 180 5.43% $81

Fixed Rates vs Variable Rates

A Fixed Rate of interest on a loan means that the interest rate of that loan will remain the same throughout the life of the loan. Whereas a Variable Rate of interest on a loan means that the interest rate of that loan will fluctu8ate depending on the market rate. It has been observed in the past that variable rates could be lower than the fixed rates.

However, it is advisable to choose a variable interest rate only if your loan is on a short term and you are able to cover the cap of the interest rate for your term in case any dramatic fluctuation of rate occurs in the market. It is not advisable for borrowers with a long term loan or with a risk-averse situation.

Rates of PenFed are subjected to changes. However, fixed rates will not change once the term starts.

Other Additional Information

Repayment Options

PenFed offers only one type of repayment - a simple Principle and Interest Repayment Plan. The amount due for repayments will be calculated based on your eligibility as per your profile on your application along with the terms of repayment you choose - between 5, 8, 12 or 15 years. Any amount that you pay beyond the amount due will be applied to reduce the principal balance of your loan.

Loan Payoff

If you have decided to make a prepayment or pay-off your loan earlier than your term's length, you can do so without having to pay any penalty or extra charges. The pay-off amount will include the existing loan balance along with the interest that would accrue till the day of the pay-off.

Deferment and Forbearance

PenFed does not offer any specified Deferment or Forbearance by default. But that does not mean that they are not offered. If a member is facing any financial struggle and unable to make payments, PenFed will work with them to find a solution on a case-to-case basis. The applicants must approach the Financial Hardship Centre before due in case they face such situations.

Cosigner Release

Borrowers with a cosigner have the option to release cosigners upon request. However, borrowers must have made 12 consecutive, qualified, on-time monthly payments. Upon request, PenFed will reevaluate the borrower's financial status and their credit profile to check their eligibility to assume the loan by themselves.


PenFed acts as a servicer to your student refinance loans. No external servicer will participate between you and PenFed. You may reach out to a representative from the Member Services of PenFed by calling the number 800-247-5626 or write an email at

Customer Services

For any queries related to the application process, you may contact the number 202-888-4320 or you may drop an email at

You may also contact their customer service from the details given below.

Text - 202-780-7195
Call - 202-888-4320
Working hours - Monday to Friday: 9 AM - 7 PM ET


Benefits of PenFed Student Loan Refinance Program

  • Don't have to be a member but can join readily through the loan application

  • Can apply with a Co-signers

  • Does not impose any extra fee associated with origination, or for enrolling membership

  • Does not impose any penalty for early payoff or prepayment

  • It refinances Federal Student Loans, private student loans, and parent PLUS loans individually or collectively

  • It refinances Federal PLUS loans in your child’s name through

  • The interest rates offered by PenFed compared with that of federal student loans are competitively low

Demerits of PenFed Student Loan Refinance Program

  • An individual is required to have a good credit score of 670 even if they are applying with a cosigner

  • The cosigner needs to have a minimum credit score of 700 or higher depending on the amount of loan

  • There are no deferment or forbearance options advertised even if the borrower is struggling with their repayments

  • The applicant has to be a member of the PenFed Credit Union

  • The program is offered only after graduation or completion of the course

  • There is no income-driven repayment plan or any special repayment plan for that matter

  • All privileges under the previous loans such as loan forgiveness for federal loans become void


  Is it compulsory to be a member of Penfed Credit Union to apply for a loan?

Yes, it is compulsory to be a Penfed member to take a loan. The process is very simple and easy sometimes it may not charge you for the membership with the loan it will add you as a member of the Penfed Credit Union.

  Does Penfed refinance private loans?

Yes, Penfed finances both federal and private student loans. It merges them to one Penfed loan.

  Can my dad take a refinance loan on my behalf from Penfed?

Yes, Penfed allows the parent to refinance their child’s loan. It accepts all the student loans including the Parent PLUS loan.

  What is the minimum credit score to apply for a Penfed Loan?

The minimum credit score for an individual is 670 and the cosigner should be 720.

  Can a person with no employment history apply for a loan in Penfed?

No, the candidate must be employed with a good credit score and the debt should be less as compared to their income. The borrower can be anyone who is employed.

  What is the minimum and maximum loan amount that can be borrowed from Penfed?

The minimum loan amount is $1,000  and the maximum loan amount covers 100% of the course fee.

  Does Penfed charge an extra origination fee?

PenFed does not charge an extra fee for origination, but the borrower should be a member of Penfed.

  Repayment options by Penfed?

It offers four types of repayments that are Deferred repayment, Fixed repayment of $25, Interest repayment, and Principal repayment.

  Can a married couple refinance student loans in Penfed?

Yes, the Married couple can cosigner a loan but either of one should have a credit score of 700 and the other should have a credit score of 670. The annual income of both of them combined should be $42,000 for loans up to $150,000 and $50,000 for loans more than $150,000.

  Are there any deferment and options in Penfed?

No, there are no deferment or forbearance options, it renegotiates the loan terms if you are struggling with your repayments.