Why We Refinanced Our Student Loans with Penfed

refinance student loans penfed

In 2016 over 70% of college graduates had student loans with an average balance of $37,000.

Chances are if you have student loans and you are reading this, you have been on the receiving end of numerous mailers regarding refinancing your student loans.

You may have even seen ads from major companies on your Facebook news feed with happy people smiling about their newly refinanced student loans.

But which company is the best option for you?

I don’t even have student loans anymore, yet I still see ads on social media and get mail in my mailbox asking about refinancing my student loans. However, in September of 2018 it finally made sense to refinance some of my wife’s high interest student loans….

And when we did we used Penfed powered by Purefy to do so.

I found the process extremely simple and decided to write a comprehensive review of Penfed student loan refinancing and share our personal experience. But before ever refinancing read this:

Prior to refinancing student loans:

If you have read any of my student loan blog posts you know my stance when it comes to refinancing student loans. Refinancing student loans makes sense if and only if:

  1. Refinancing if it impacts your monthly cash flow positively
  2. Make sure you understand the difference between federal and private student loans and the perks of each.
  3. Make sure to have a plan to pay student loans off quickly, regardless of refinancing.

I state this because for the most part refinancing student loans is a really good option in most cases, just always make it is right for your personal situation – refinancing is never a one size fits all.

However, if you find yourself in the position ready to refinance your student loans, you most likely are shopping around for which company to use. Personally for us, it came down to Lendkey and Penfed – and we wound up using Penfed powered by Purefy to refinance our student loans.

Here is my transparent review of how refinancing our student loans with Penfed went.

Refinancing Student Loans with Penfed & Purefy

First thing is first – Penfed partnered with Purefy in 2016 to bring student loan refinancing to Penfed members. The best thing about Penfed student loan refinancing:

Penfed allows married couples to refinance student loans together. And they are the only ones who do that.

That and the fact that Penfed even allows parents/borrowers to refinance Parent Plus Loans made it a no brainer to move forward with our student loan refinancing as a married couple.

With a combined student loan balance close to $300,000 when we first got married, Lauren and I had to be strategic when it came to refinancing our student loans. We did not want to jeopardize our monthly income, extend our term lengths or lose income based repayment options.

As a married couple we also wanted to refinance the undergrad portion of her student loans together. While Penfed doesn’t make you do this – it was a nice option to have as a married couple.

Pro #1 to using Penfed and Purefy for student loan refinancing: Married couples can refinance student loans together.

Additionally, unlike most credit unions that can sometimes make membership challenging you don’t have to be a current member to refinance your student loans with Penfed.

In order to be a member you either have to be or have family who has served in the military or worked for the Federal Government. If neither of those apply don’t worry – you simply just have to make a small donation to National Military Family Association.

But you can fill out a Penfed refinance application without being a member.

Refinancing Student Loans with Penfed Pros:

Straight from Penfed’s student loan refinancing site here are some of the pros when it comes to refinancing with Penfed/Purefy:

  • Average lifetime savings of $19,783 on higher balance loans.
  • Fixed rates as low as 3.75% APR
  • Optional Loan terms: 5, 8, 12 and 15 Years.
  • No application or origination fees and no prepayment penalties.
  • Offer of a co-signer release policy
  • Some of the most competitive rates
  • Couples can refinance together

The benefits of a co-signer release policy is that there are ways for the co-signer to vacate the loan terms if the original borrower is not paying the payments (Avoiding those terrible situations you hear about a cosigner being stuck).

Additionally, the ultimate reason we decided to refinance with Penfed was because of the rate we were able to lock in at!

Applying to refinance with Penfed

The process for applying to see what rate you could qualify at to refinance your student loans couldn’t be simpler. It starts with simply answering these quick questions:

  1. Highest Degree
  2. School
  3. Approximate Credit Score
  4. E-mail address
penfed student loan refinance review

Once you complete the preliminary questions, estimate your current loans (how much you want to refinance), the number or years remaining and interest rate. Followed by selecting whether or you are refinancing with a cosigner or not:

refinance with cosigner penfed
should you refinance student loans penfed


student loan refinancing penfed purefy

Spouse Co-signer

should you refinance with penfed

Non-spouse Co-signer:

Once you complete these steps a list of both fixed and variable rates with differing loan terms is automatically populated giving borrowers tons of options to choose from!

After making a selection the following forms and documentation will be required in order to process the application and funds:

  • Pay stub/tax return
  • Driver’s license or passport
  • Payoff statement from your current student loan servicer
  • College transcript or diploma photo
  • Penfed membership app if you’re currently not a member

Penfed Student Loan Rates & Terms

Penfed offers competitive refinancing rates for student loan borrowers for both federal and private loans.

Fixed rates vary from 3.75% to 7%

Variable rates vary from 2.96% to 7.70%

These rates will vary depending on factors like your credit score, income and whether or not you have a co-signer.

Note: With any type of refinancing, if you decide to go with a variable rate calculate all what-if scenarios and know the variable terms. Variable rates are not bad if you plan to pay your student loans quickly.

Penfed Student Loan Refinancing Cons

Depending what you consider a pro or con (Some can be argued either way), here are some of the cons when it comes to refinancing with Penfed:

  • Requires Bachelor’s degree (So if borrowers didn’t finish school they cannot use Penfed.)
  • Strong credit history (New grads might not have good credit)
  • Annual income of $42,000 or a cosigner is required.
  • No auto pay discounts or interest breaks
  • No forbearance or deferment

Penfed requires borrowers to make a certain amount of income in order to be able to refinance student loans. Like I stated a moment ago, this can be viewed as a pro and a con at the same time.

While requiring a semi strong financial situation (Income and credit) can be viewed as a good thing, this does prevent some who may greatly benefit from refinancing to be able to do so.

The Penfed initial process for refinancing is very simple – just simply fill out the application and see if you qualify. Uploading supporting documentation can take a few day to get everything you need figured out. However, this isn’t really different from any other student loan refinancing company.

No auto pay discounts is considered a con because let’s face it, any time we can save .25% in interest is a win. Penfed does not off these auto pay incentives.

Additionally, like most privately funded student loans, there is no forbearance or deferment. So if you decide to go back to grad school or pay ahead, don’t expect your loans to go into deferment.

Note: In some cases hardship waivers are possible for forbearance, interest still accrues during this time.

My takeaway for Penfed Student Loan Refinancing:

Before ever refinancing your student loans always check to make sure you read the fine print and understand things like:

  • Interest Rates
  • Is the interest rate variable or fixed?
  • Loan terms & payback length
  • Any fees
  • Perks and what-ifs (Private loans don’t offer deferment, so play out the what if scenarios)
  • Income requirements

Overall Penfed ranks highly when compared to the likes of Lenkey and Citizens Bank. College Investor gave Penfed an overall score of 85.

When you use Penfed to refinance your student loans the process is very simple, and as I alluded to earlier, you don’t have to worry about secret rates or fees.

Penfed refinancing only offers fixed rates or variable rates and there is zero application fees.

My biggest recommendation is to make sure the rate is fixed OR if you want to use a variable rate just make sure you know what the variable amount can possibly be.  At the end of the day if you are not comfortable with the terms or don’t understand them – seek clarification or simply don’t follow through with refinancing.

For Lauren and I, refinancing our student loans saved us over $2,700 per year in just interest alone when we dropped our rate from 7.9% to 4.75%. That was an extra $250 per month to use to payoff our student loans even faster!

So if you have decided that refinancing some or all of your student loans is a good idea, be sure to check out Penfed powered by Purefy and simply answer 5 simple questions to find your new interest rate!