Student loans don’t have to be a "til death do you part" relationship. PenFed has a unique solution for married couples seeking to refinance through our Spouse Loan. With the Spouse Loan, both spouses refinance their student loans together into one monthly payment, one low interest rate, and a term of your choice.
When refinancing with your spouse, the interest rate and eligibility is determined jointly. Here is how it works.
Your income doesn’t affect the rate you get but does allow you to qualify for refinancing. With traditional refinancing, if you are a stay-at-home parent or don’t generate enough income to meet the minimum requirement, it usually becomes impossible to qualify. With PenFed’s Spouse Loan, the income requirement is determined by both spouses’ combined income. So, if one of you makes $0 per year and the other meets the requirement, you can still refinance.
When refinancing with your spouse, we determine your interest rate using the higher of the two credit scores. You do still need a minimum 670 credit score to refinance with your spouse, and one of you needs a credit score of 700 or higher. If your loan amount is above $150,000, one of you will need at least a 725 to refinance. You can find your rate and select “spouse cosigner” so you know exactly what you will save before you apply.
The second factor that determines your interest rate is the type of degree you earned. If you both have the same education level, it doesn’t matter who applies as the main applicant but if one of you has an advanced degree, that spouse should apply as the main applicant to ensure the lowest rate. Unlike traditional refinancing, only one person needs to have completed a bachelor’s degree or higher to refinance. There are no degree or income requirement for the other spouse.
If one of you has student loans and the other doesn’t, you can still refinance with the Couple Loan. Similarly, if you both have loans and want to refinance together you can do that too! The sum of all the loans just needs to meet our minimum of $7,500 and not exceed our maximum of $300,000.
Like any cosigned loan, the Spouse Loan will appear on both credit reports and both parties are considered jointly responsible for the loan. Many married couples share their income and expenses, and this will be just business as usual. But for some couples, there may be a desire or need to keep student loans separate, and in that case, the Spouse Loan may not be an attractive option, compared to a non-cosigned loan.
Getting organized is always a good first step. You should know how much you owe, the interest rate on each loan, and what type of payment plan you are on. This will help you know exactly how much you can save and to make sure you aren’t on any federal repayment plans you want to keep. With refinancing, the federal benefits on your current federal student loans will no longer apply, so make sure you double check what type of repayment plan you are on.
The Spouse Loan allows for a flexible option for married couples who are looking to jointly refinance their student loans. It’s easier to qualify since we consider both spouses together to meet the credit, degree and income requirements. Spouse Loan refinancing is exclusive to PenFed Credit Union. To apply, use our Find My Rate tool and select “spouse cosigner” under the “type of loan” section. As always, give us a call if you have any questions!