ALEXANDRIA, VA, Mar 22, 2010 (MARKETWIRE via COMTEX) -- Pentagon Federal Credit Union (PenFed) announced today the newest addition to their education loan portfolio; the Private Student Loan. The Private Student Loan is a line of credit that will allow members to borrow for educational expenses at a competitive, low rate. As with other student loans, payments will be deferred until the student graduates or separates from school.
"This is an exciting opportunity for PenFed to provide affordable lending services to college students," says Shashi Vohra, Vice President of Business Development, PenFed. "With the cost of higher education on the rise, PenFed sees this as an innovative lending solution at a very competitive interest rate to assist college students and their parents with college funding."
Designed to be used in addition to -- or in lieu of -- other types of funding such as grants or Federal Student Loans, PenFed's Private Student Loan is a line of credit that students utilize for qualified education expenses.
Members apply for the loan with PenFed; however, they must also apply for funding at their school's financial aid office. It is the school that determines the member's needs while funds are disbursed straight to the school.
"What is unique about our Private Student Loan program is that conventional student loans require borrowers to re-apply every year -- or even every semester," says Vohra. "With PenFed's lending program, a student need only apply once, whether they are at the beginning or in the middle of their schooling, to secure funding for the remainder of their educational career."
The Private Student Loan program is convenient and easy for members to use. Since the loan is a line of credit, members are only responsible for repaying the amount borrowed, not the full line of credit. All borrowers on the loan are required to be a member of PenFed to participate in the program.
For more information about PenFed's Private Student Loan program and to apply, visit www.penfed.org or call 800-247-5626.
About Pentagon Federal Credit Union
Pentagon Federal Credit Union, established in 1935, has more than 950,000 members and assets in excess of $14.5 billion, and provides worldwide service to Army, Air Force, Coast Guard, Department of Defense, and Department of Homeland Security personnel; members of the VFW; employees or volunteers of the American Red Cross; and others in the defense community and their families.
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posted: Mar. 22, 2010 @ 5:58p
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posted: Mar. 22, 2010 @ 6:31p
I wonder if there is any way to take over existing student loans and transfer to PenFed?
posted: Mar. 23, 2010 @ 8:27a
Like with most student loans, they will loan up to the entire cost of attendance including room, board and expenses. If you have a positive balance after all school fees are paid, the school will refund you. You could take the extra refund and apply it to older student loans.
Otherwise you should call them and see if they can refinance existing student loans under this program. If you call, come back and let us know.
posted: Mar. 23, 2010 @ 10:33p
I wonder if their lending standards for the student (Read: no income) loan are any lower than.. every other product they offer
posted: Mar. 23, 2010 @ 11:24p
Yes, that would be good to know about the lending standards. Anybody have some input on this?
posted: Mar. 24, 2010 @ 9:24a
Anyone apply and get an interest rate? The range is kind of high with only a little bit falling under the 6.8 grad rate.
posted: Mar. 24, 2010 @ 12:03p
In reading the terms, it says 3 month libor + margin of 3% which would only be about 3.28% today. I didn't see any mention of a floor, but yet it says the lowest starting interest rate is 5.5%
The language is vague in my opinion on what the rate will set to after graduation and grace period. It says "The fixed interest rate you pay on your installment loan will be based on market conditions in effect on the first day of the 5th month of the Grace Period. However, the fixed rate will not be set below 6.5%. " "Market Conditions" seems vague to me. I'm assuming they mean the most recent 3 month libor rate or something very close to that.
I currently have 1 mo libor plus 3% on some private loans, but I'm thinking that putting a cap on the interest rate after graduation (I'm guessing it will be 6.5% as I dont think libor will get to 3.5% anytime soon) for part of my loans is a good idea.
I'm in the process of applying for funds for my summer classes and soon for the fall. I'll post any further information I get from PenFed.
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