When I began my student loan refinance search, it was really difficult to find information or reviews that weren’t from a lender (SoFi’s marketing game is strong) or from a financial technology company (e.g. Credible, NerdWallet, BankRate). While these are both good sources, the information they provide is generally pretty generic until you submit an application (which is usually a soft credit pull initially) AND they are both financially invested in you completing a refinance. I was looking for more of a Yelp nitty-gritty, “This is what happened to me, YMMV…” sort of review. To that end, I have decided to make my contribution to the student loan refinance interwebs here.

Lender Search/Decision – Pentagon Federal Credit Union (PenFed)

I began my search by using one of the financial technology companies listed above to do a preliminary search for student loan refinance lenders. As I have stated previously, my top refinance priority was securing a much lower fixed interest rate. A second priority was securing a monthly payment that was manageable should I no longer have a full-time position. Ultimately, my search yielded PenFed as the best option for my refinance. If your priority is guaranteed forbearance in case of economic hardship, in-school deferment, discharge of loans in case of death or permanent disability, or if you are not a citizen of the United States, there are better lender options. In a low-interest-rate environment, PenFed is also probably not the best option for someone who is risk-tolerant of a variable rate as PenFed does not offer them. Something else I liked about PenFed is that they are both the lender AND the servicer which means no more third-party services (by forever Heartland ECSI!). While I have had good experiences with third-party services that have relatively responsive, easy-to-use, and up-to-date platforms, I have found that this is the exception more than it is the rule. And while you would expect the amount that you interact with your student loan servicer to be pretty rare, on those times you do have to interact with them, it’s because something bad has happened and you don’t want poor customer service contributing to what are already heightened emotions.

PenFed Criteria
Something else that I liked about PenFed is that they are direct and specific about their lending criteria. I found that some lenders said really nebulous things like, “well will take into consideration your whole financial picture.” I wholeheartedly support lenders moving beyond a FICO score, and other “traditional measures” of creditworthiness, to increase lending opportunities for consumers; especially to the extent that it increases opportunities for credit in underserved markets. That being said, if traditional measures are still a part of that decision calculus, then I think lenders should be upfront about what those requirements are so that consumers are not wasting their time. Here I would share that 1) PenFed’s minimum FICO score is 670, 2) the applicant must be a U.S. citizen, and 3) their income minimum is $42,000.00 without a co-signer. Another quirk is that because PenFed is a credit union, you must become a member of the credit union. Application is pretty easy and you qualify with an electronic application that is a part of your loan verification documents and a $5.00 deposit into a savings account.

Application Process
This was perhaps the most confusing aspect of the student loan refinance process with PenFed for me. The process itself, in terms of document request and upload, was pretty simple, what was confusing was figuring out the different actors and how they fit into the process…you know, since I was suddenly getting emails about three different entities and three different websites. For anyone who should search for this…

– PenFed (Pentagon Federal Credit Union) – Lender/Servicer – PenFed is the lender and the servicer which means they are the bank that is making the lending decision and to whom you will make monthly payments on the loan.

– Purefy – “Purefy is a student loan comparison site, and it also originates refinanced student loans and parent loans via a partnership with Pentagon Federal Credit Union.” I didn’t use Purefy to search for student loans and as far as I can tell, the only two student loan companies for which they offer a comparison are PenFed and SoFi (I assume no one would be shocked to learn that they ultimately rate PenFed as the better option). Thus, I was surprised when I received an email from Purefy following my initial application. That being said, my experience with them was pretty great. Throughout the process, I had a couple of questions, and Dallas, my customer service representative, responded to me almost immediately. If you are approved for a loan with PenFed then Purefy exits the banking relationship once the loan is approved, documents are uploaded, and the loan is funded. If you are not approved, it seems like they are open to an ongoing relationship to help you become a PenFed customer.

– CampusDoor (Campus Door Holdings Inc.) – CampusDoor is just the loan processor. Their website is where you upload verification documents; their website is also where you can view updates and respond to any additional requests for information.

Experience Thus Far
It is cliche but…so far, so good. I was able to create an account on the PenFed website four business days after my loan was approved. It took a bit longer than I would have liked for my loans to be paid off (14 business days) but the former servicers of loans I included in this refinance were pretty terrible…which was a small reason I wanted to re-fi and end my relationships with them. Thus, I am unwilling to lay blame for the delay at the feet of PenFed. My federal loans did end up going to another servicer (yea…ugh…I can’t talk about it) but thankfully they all ended up at one servicer. I am once again grateful that I did this now as opposed to in January because the interest pause on federal loans means I don’t have to do any magical math to figure out what my current student loan balance is.

Alright, that was a far deeper dive than most folks needed but it is my contribution to the personal finance interwebs. Part 3, my last and final post about my student loan refinance will be much briefer and will just be information about the loan itself.