PenFed Review 2020: Consolidate your Student Loans

PenFed is one of many student loan financiers out there. It can be hard to know which business is your best choice, so check out this review to decide whether to dismiss PenFed as an option or not.

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    Established in 1935, Pentagon Federal Credit Union, or PenFed, has slowly grown to the size that it is today, being one of the USA’s strongest financial institutions, with over 2 million members and more than $25 billion in assets. It offers student loan financing options to members across all 50 states.

    Why get a student loan from PenFed?

    If you’re eligible, this lender has some deals that make financing your education with it quite reasonable. One great addition is the ability to take two separate student loans and combine them, lowering the overall cost and your workload through consolidation. This is great for married graduates.

    What student loans does PenFed offer?

    There's the option to refinance your current loans at PenFed, and you can also take out new student loans alongside those that are already active.

    Student loan refinancing information

    You can only refinance if you have a credit score of 670 or more, which isn’t too high, but still might mean some people are ineligible. 

    Fixed rates from: 

    3.23% - 5.53%
    Variable rates from: 2.18% - 5.54%
    Loan repayment terms:   5, 8, 12 or 15 (Years)
    Loan amount:$7,500 to $300,000
    Late fees:        20% of the payment’s interest after five days ($25 max)
    Returned payment fee: Not stated
    Prepayment penalty:        None

    Private student loans

    This lender has a very large range of different options for private student loans, depending on your course, when you graduate, where you attend(ed) school, and if you’re in the military. As such, there’s absolutely no information on rates and fees, and to have any idea of what you’ll be offered, you’ll need to fill in the online forms and complete a soft credit check.

    More about rates and fees of PenFed’s loan options

    Here’s all the available information on what's on offer:

    Fixed rates from: 

    Dependent on loan
    Variable rates from:  Dependent on loan
    Application fee:  None
    Origination fee: None
    Disbursement fee: None
    Late fee:    Dependent on loan
    Returned payment fee: Not stated
    Prepayment penalty:Dependent on loan

    PenFed pros and cons


    • Option to combine two loans
    • Well rated with low starting rates on refinancing


    • It’s very ambiguous what a new student loan will give you, and you’ll have to become a member and apply to find this out

    How to apply for a PenFed student loan

    You’ll need to become a member of the credit union if you’d like to apply, but you can do this easily online. Those who are ineligible can simply donate $15 to a charity to qualify. 


    PenFed has some reasonable rates on refinancing your current student loan, and it has an unusual option for you and your partner to combine your loans, which will work great for couples. But with such vague terms on new loans, it’s hard to recommend it for any reason other than this.

    Two better options would be College Ave or Ascent. While these lenders don't offer consolidation, they’re transparent with all their costs, rates and terms, and have some extra perks, such as the ability to release a cosigner, and your death will end the loan, unlike at PenFed.