Due to the tight competition for jobs and the need to boost one’s earning potential, students are taking on debt to finance their studies. I was one of these students during my time in college.
With nearly one in three students taking on student loans in the U.S., according to the Federal Reserve Bank of New York, outstanding loans have amounted to $1.57 trillion. The average student loan debt is $38,792.
It’s important to choose loans that are designed to help students and not add to their future financial burden. This is why I will talk about the PenFed student loans offered in partnership with Ascent Funding.
- Things to Consider When Getting a Student Loan
- A Look at the PenFed Student Loans
- PenFed Undergraduate Student Loans
- Benefits of the PenFed Undergraduate Student Loans
- Fees and Interest Rates for the Undergraduate Student Loans
- Applying for a PenFed Student Loan
- Downloading and Installing the PenFed Mobile App
Things to Consider When Getting a Student Loan
I have heard countless horror stories regarding student loans and how some people ended up buried in debt due to these loans. Borrowers who weren’t able to earn a degree find it the most difficult to repay them.
Student loans can only be considered good debt if they’re used to earn a degree that translates to a well-paying job capable of repaying them. You should limit your debt to repayments of up to 10% of your possible income.
Since you won’t instantly feel the impact of student loans, there’s a tendency to overborrow. To avoid this, make sure to compute how much you will eventually need to repay with interest and stick to what’s realistic.
Educate Yourself More About Student Loans
One of the reasons why some people get buried in debt from student loans is their lack of financial education before deciding to borrow money. It is imperative that you understand how the loan would impact you in the future.
Before borrowing, you must seek information on how much the typical earnings would be in the field of study you chose. Then determine how much your future monthly student loan payments would be.
Also, keep in mind how student loan interest works so you can select the best one available that suits your needs. Know the penalties and fees that you would possibly face if you can’t make payments.
A Look at the PenFed Student Loans
Speaking of student loans, I recently came across the student loan options being offered by PenFed Credit Union in partnership with Ascent Funding LLC. These loans are worth considering if you’re looking to get one.
PenFed offers several undergraduate student loans, which you may choose from depending on which best suits your needs and qualifications.
The undergraduate loans are classified as Cosigned Credit-Based Loans, Non-Cosigned Credit-Based Loans, and Non-Cosigned Outcome-Based Loans.
About PenFed and Ascent Funding
The student loans I mentioned above are not made by Pentagon Federal Credit Union (PenFed) and are only being offered in partnership with Ascent Funding, funded by Bank of Lake Mills.
PenFed is the third-largest federal credit union in the US. It provides its over 1.8 million members with loans, savings and deposit accounts, credit cards, and other financial services and has assets of $25 billion.
Meanwhile, Ascent Funding is a private loan organization focused on providing financing for college education and coding bootcamps. Its private student loans have been recognized by Forbes Advisor and NerdWallet.
PenFed Undergraduate Student Loans
These undergraduate student loans can cover up to 100% of the cost of attendance and other school-related expenses, with a maximum of $200,000 aggregate total. They can be used at more than 2,200 colleges in the country.
The Cosigned Credit-Based Loan is designed for students with a creditworthy cosigner, while the Non-Cosigned Credit-Based Loan is for those who qualify based on their own income and credit.
On the other hand, the Non-Cosigned Outcomes-Based Loan is for junior and senior college students without a credit score but who maintain a grade point average (GPA) of 2.9 and above.
Other Loan Details
For all three loan options, the loan amounts could be between $2,001 to $200,000. For Cosigned and Non-Cosigned Credit-Based Loans, the terms of repayment could be 5, 7, 10, 12, or 15 years.
Repayment options for these two options can either be deferred repayment or in-school interest-only repayment. The minimum payment is set at $25.
Meanwhile, the Non-Cosigned Outcomes-Based Loan only has terms of 10 and 15 years, and the only repayment option is deferred repayment, which could start up to nine months after graduation.
Benefits of the PenFed Undergraduate Student Loans
I found several notable benefits from these undergraduate student loans from PenFed and Ascent. The loans give a 1% cashback reward upon graduation, which is significant money you can use for other things.
I mentioned earlier the option to start repayments up to nine months after finishing school, which gives time for the student to find work and establish an income to finance the repayment.
The Non-Cosigned Outcomes-Based Loan can be used as a tool for building your credit score.
You may also do this by releasing your cosigner after 24 consecutive on-time payments with the cosigned loans.
Other Benefits Provided
A 1% automatic debt discount is also given to those who apply for the Non-Cosigned Outcomes-Based Loan.
The loans are considered affordable because of the option to get either fixed or variable interest rates. They also do not have application, origination, or disbursement fees.
No penalty is imposed for early repayments. Students are also given access to free resources and apps from Ascent, which they can use to thrive at school.
Fees and Interest Rates for the Undergraduate Student Loans
What I like most about the undergraduate student loans from PenFed is that people are not burdened by any additional fees and charges. Interest rates depend on the loan amount and the borrower’s credit history.
The Cosigned Credit-Based Loan offers the lowest annual percentage rates (APR), with the variable APR ranging from 1.51% to 9.09% and the fixed APR at between 3.24% to 11.33%.
The Non-Cosigned Credit-Based Loan has a variable APR of 4.09% to 10.84% and fixed APR of 5.91% to 13.09%.
The Non-Cosigned Outcomes-Based Loan’s variable APR is between 8.93% to 11.34%, and its fixed APR is at 10.62% to 12.46%.
Eligibility Requirements for the Undergraduate Student Loans
For the Cosigned Credit-Based Loan, borrowers need to be enrolled at least half-time and should be U.S. citizens whose cosigner is also a citizen or permanent resident. International students and students with DACA status may also apply.
The Non-Consigned Credit-Based Loan requires borrowers to be enrolled at least half-time and must be U.S. citizens or permanent residents and DACA students. At least two years of credit history is also needed.
Lastly, Non-Cosigned Outcomes-Based Loan borrowers should be enrolled full-time or graduating within the next nine months. They should maintain a GPA of 2.9+ and must be a U.S. citizen or permanent resident.
Applying for a PenFed Student Loan
Applications for the undergraduate student loans will be processed by Ascent. The first step is to complete an application through a computer or a mobile device, which can be done in just a few minutes.
You can check your prequalified rates without affecting your credit score after your application submission.
You can then choose whether to avail of a fixed or a variable rate for your loan.
Once you get approved and certified, the last step is to review and sign the final loan offer that Ascent will send to you via your Ascent account.
Important Contact Information
For queries and concerns, you may get in touch with PenFed via its U.S. toll-free number at 1-800-247-5626. It can also be reached through its main line at 724-476-6333 or by fax at 1-800-557-7328 or 1-800-278-2212.
PenFed is headquartered at 7940 Jones Branch Drive, McLean, Virginia, United States.
You may also contact Ascent via phone at 877-216-0876 or through email at [email protected]. Its headquarters is located at C501 W. Broadway Ste. A150 San Diego, California 92101.
Downloading and Installing the PenFed Mobile App
The PenFed mobile app is a useful tool to keep track of and manage your student loan. The app is available to both Android and iOS platforms, so you don’t have to worry about compatibility.
For Android users, you will find the app on the Google Play Store in the Finance category under the name “PenFed”.
The app has a file size of 33 MB and requires Android 4.4 and up to function properly.
Tap on the Install button to initiate the download and installation on your device.
Think Money Mobile App for iOS
Meanwhile, iOS users will find the app on the Apple App Store in the Finance category under the name “PenFed Mobile”.
This version has a file size of 49.7 MB and requires iOS 11.0 or later for both the iPhone and iPod touch. For the iPad, iPadOS version 11.0 or later is required.
To download and install, simply tap on the “Get” button.
Conclusion
While others say that student loans are a debt trap, I think that it’s a great resource to pursue higher education and establish a great career later. You just have to be properly informed about its benefits and risks and make sure that you make payments as soon as you can.
Note: There are risks involved when applying for and using credit. Consult the bank’s terms and conditions page for more information.