Business Insider's personal finance team compared PenFed Student Loans to the best private student loans of 2025 and found it to be a standard offering.
PenFed doesn't originate undergraduate or graduate student loans, and instead refers you to its partner, Sparrow, when you go to apply for one on its website.
Members of the military and employees of qualifying organizations will automatically qualify for a membership. But anyone can become a member by opening a savings account with a $5 minimum deposit. You need to be a member to get a loan.
Always consider your federal student loan options before refinancing into any low-interest private student loan, including one with PenFed. You'll usually get better terms and protections through the government.
PenFed offers 24/7 customer service through its website. You can fill out a form to talk to somebody on the phone or use the credit union's chatbot.
Aside from Penfed student loans, the lender also offers PenFed checking and savings, the Pathfinder Rewards Visa Signature credit card, and PenFed personal loans, as well as PenFed mortgages.
PenFed Student Loans Overview
Who is PenFed Best For?
PenFed is best for borrowers who are looking to refinance student loans and who are already members of the credit union — or who don't mind paying a nominal $5 fee to become one. Additionally, if you want to refinance a large amount of debt, in this case up to $500,000, you may like PenFed.
Fixed: 7.74% - 9.93%
late fee of 20% of the interest owed, with a minimum of $5 and a maximum of $25
670
$7,500 to $500,000
- Cosigners allowed
- Fast application process
- High maximum loan amount
- Membership required
- Undisclosed timeline on approval process
- No variable rate loans
- Late fees
PenFed is a solid lender for borrowers who want to refinance a large amount of student loan debt. However, the credit union charges late fees, and it doesn't offer variable-rate loans.
- Members of the military and employees of qualifying organizations will automatically qualify for a membership, but anyone can become a member by opening a savings account with a $5 minimum deposit
- PenFed doesn't disclose the length of its approval process
- Five, eight, 10, and 15 year repayment term lengths
Compare PenFed Student Loans
4.64% - 15.99% variable and 3.54% - 15.99% fixed (with AutoPay discount)
N/A
Undisclosed
Minimum of $1,000
- No origination fees, prepayment penalties, or late fees
- Solid APR
- Several options for repayment term length
- Quick application process
- Credit check required
SoFi is an excellent lender for borrowers who want a competitive APRs. It's also a great lender for those who don't want to worry about fees.
SoFi Undergraduate Student Loans- Apply through your computer or mobile device
- Customer service available via phone, mail, and social media
- Five, seven, 10, or 15 year repayment terms available
- Loan minimum of $1,000, maximum up to 100% cost of attendance
- Loans are originated by SoFi Lending Corp. or an affiliate
5.01% - 14.67% variable and 3.39% - 14.85% fixed (with AutoPay discount, varies by plan)
None
Fair to Excellent
$2,001 - $200,000 ($200,000 aggregate total)
- N/A
- N/A
Ascent provides a variety of repayment term lengths on its student loans and low minimum interest rates on fixed-rate loans. You may also qualify for a 1% cash-back reward that will be paid to you after graduation.
Ascent- Loan amounts available: $2,001* minimum, up to $200,000 for undergraduates, and $400,000 for graduates
- *The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.
- Repayment options available:
- Deferred: No payments for up to nine months after leaving school
- Interest only: Only make payments on the loan's interest while in school
- Partial payments: Pay $25 per month while in school
- Immediate Repayment:Begin making full payments (principal + interest) on the loan right away
4.44% - 17.99% variable and 3.47% - 17.99% fixed (with AutoPay discount)
late payment of 5% of the amount due, capped at $25
mid-600s
Minimum of $1,000
- No prepayment or origination fees
- International students eligible with an eligible cosigner
- Low APR
- Multiple options for repayment term length
- Many ways to contact customer support
- Credit check required
- Late payment fee
College Ave is a great lender for borrowers who want multiple options for repayment term lengths and are after a low APR. College Ave also offers many options for contacting customer support.
College Ave- Apply through your computer or mobile device
- Customer service available via phone, text, email, and live chat
- Five, eight, 10, or 15 year repayment terms available
- Loan minimum of $1,000, maximum up to 100% cost of attendance
- Repayment options available:
- Deferred: No payments for up to six months after leaving school
- Interest only: Only make payments on the loan's interest while in school
- Partial payments: Pay $25 per month while in school
- Full repayment immediately: Start making full payments while still in school
- Loans made through Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC
How to Apply for a PenFed Student Loan
- PenFed's website will redirect you to Sparrow. You'll enter your email address to check rates. To find pre-qualified rates you must enter your name, date of birth, citizenship status, home address, loan amount, income, housing expenses, school name, degree information, and expected graduation date.
- Apply to lender and submit documents to verify your identity. This may include income information, employment information, and address verification.
- Accept your loan offer. After you get all your documents in order, you will be sent a formal loan agreement.
Pros and Cons of PenFed Student Loans
Pros of PenFed Student Loans
- Cosigners allowed. Enlisting a cosigner on your student loan can help you qualify for financing more easily or get you a lower rate.
- High maximum loan amount. You can borrow up to $500,000 with PenFed, making it a great choice for borrowers who want to refinance a considerable amount of debt.
Cons of PenFed Student Loans
- Membership required. You'll need to be a member to get a loan. You're automatically eligible if you're in the military or an employee of a qualifying organization. But anyone can become a member simply by opening a savings account with a $5 minimum deposit.
- Undisclosed timeline on approval process. Neither PenFed's website nor a customer service representative was able to detail how long the approval process takes. Other lenders are more transparent about the amount of time it takes to get approved.
Alternatives to PenFed Student Loans
PenFed vs. SoFi Student Loans
If your credit isn't in the best shape, SoFi's maximum interest rate is lower than what you could pay with PenFed.
SoFi also offers highly competitive APRs and a "Good Grade" bonus, which rewards students with a GPA of 3.0 or higher. PenFed offers no such incentive program.
PenFed vs. Earnest Student Loans
You could get a great rate with Earnest and PenFed if you have a good credit score.
There are no origination fees or prepayment penalties with either lender. Earnest does not charge borrowers any fees, including delayed payment fees. Earnest also allows borrowers to miss one payment per year, in the event of financial hardship. However, that will extend the loan's term length.
PenFed Student Loans Customer Experience
PenFed has an A+ rating from the Better Business Bureau, a non-profit organization focused on consumer protection and trust. The BBB determines its score by evaluating a company's response to customer complaints, truthfulness in advertising, and transparency about business practices.
PenFed doesn't have any recent public controversies.
Between its top-notch BBB score and clean history, you might decide you're comfortable taking out a personal loan with PenFed.
Why You Should Trust Us: How We Rated PenFed Student Loans
We rate all student loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths (15% of rating)
- Repayment options while in school (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
Each category's weighting is determined based on its importance to your borrowing experience. Rates and fees have the most significant impact on the total cost of your loan, so we weigh those the most heavily. Customer support and ethics are still crucial parts of the borrowing experience, but do not directly tie to a student loan's terms, so they have less of an impact on the overall rating.
Read more about how we rate student loans >>
PenFed Student Loans FAQs
Is PenFed good for student loan refinancing?
Yes, PenFed is a good option for student loan refinancing. However, you may find lower rates elsewhere with other lenders.
Will PenFed student loans be forgiven?
No, PenFed student loans will not be forgiven. No private loans are eligible for forgiveness.
Do I need to be a PenFed member to refinance my student loan?
Yes, PenFed student loan refinancing requires membership in the credit union. However, anyone can become a member simply by opening a savings account with a $5 minimum deposit.
** SoFi Private Undergraduate Student Loans Disclosure: Interest Rates: Eligibility and Important Details. Fixed rates range from 3.54% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from 4.64% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi rate ranges are current as of 1/7/2024 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
** SoFi Private Graduate Student Loans Disclosure: Interest Rates: Eligibility and Important Details. Fixed rates range from 3.54% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from 4.64% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi rate ranges are current as of 1/7/2025 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi's underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 8/5/24 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).
* The SoFi 0.25% autopay interest rate reduction requires payments by an automatic monthly deduction from a savings or checking account. This benefit is suspended during periods of non-payment through ACH, deferment and forbearance. Autopay is not required to receive a loan from SoFi.
* 0.125% Continuing Scholar Discount: Terms and conditions apply. Offer good for private student loan customers who have previously borrowed a private student loan from SoFi and are taking out a subsequent loan only, select a term and repayment type that is eligible for the discount, and is subject to lender approval. To receive the offer, you must: (1) complete a loan application with SoFi; and (2) meet SoFi's underwriting criteria. Once conditions are met and the loan has been disbursed, the interest rate shown in the Final Disclosure Statement will include an additional 0.125% rate discount because you have borrowed a private student loan from SoFi in the past. Offer good for existing private student loan borrowers only. Offer cannot be combined with other rate discounts, with the exception of the 0.25% autopay rate discount. SoFi reserves the right to change or terminate the Rate Discount Program to unenrolled participants at any time with or without notice.
