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PenFed Credit Union Personal Loans: 2024 Review

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Jennifer Calonia
Jennifer CaloniaUpdated January 2, 2024

Overview of PenFed Credit Union

The Pentagon Federal Credit Union, better known as PenFed, is one of the largest federal credit unions in the United States. It offers a variety of personal loan options from $600 to $50,000, and repayment terms as long as five years. The annual percentage rate (APR) ranges from 7.99% to 17.99%, and there are no origination or application fees.Although you don’t need to be a PenFed member to apply, you typically must agree to open a PenFed Credit Union share account with a minimum deposit of $5 to receive your loan funds.The Takeaway: A PenFed Credit Union personal loan might be a good option for borrowers who have good credit, need a small loan amount quickly, and don’t want to pay origination fees.

Pros and Cons of PenFed Credit Union

Pros of PenFed Credit Union

As the nation’s second-largest federal credit union by membership, PenFed offers a handful of advantages, including:

Streamlined Prequalification 

Whether you’re a member or nonmember, you can check your rates for a PenFed Credit Union personal loan online without any obligation. The credit union conducts a soft credit check when you request your rate, which doesn’t impact your credit score.If you’re preapproved, PenFed gives you an easy-to-read overview of the personal loan options you’re prequalified for. If you decide one of them is a fit for you, you can submit a formal application on the platform. You can get preapproved and receive a loan application decision in minutes.

No Origination Fees

PenFed doesn’t charge its members an origination or application fee. There are also no hidden fees, and you won’t be charged a penalty fee for paying off your personal loan early.

Multiple Repayment Terms

PenFed Credit Union personal loans have 12-, 24-, 36-, 48-, or 60-month repayment periods. 

Co-Borrowers are Allowed

Members have the option of including a co-borrower on the loan. Adding a borrower with good credit might improve your chances of qualifying for a loan or getting a lower interest rate.

Cons of PenFed Credit Union

Low Borrowing Limit

Compared to some lenders that offer large personal loans up to $100K, PenFed’s $50,000 maximum borrowing amount is low. PenFed Credit Union personal loans might not meet the funding needs of borrowers looking to finance a large expense, such as costly medical bills or high-value debt consolidation.

Lack of Transparency About Eligibility

While PenFed mentions many of its benefits on its website, when it comes to personal loan eligibility requirements, the institution provides little information about what it takes to qualify for its personal loan. Critical Information, like the minimum credit score and income requirements are not easily accessible without contacting the lender.

No Direct Payments to Creditors 

Members who plan on using their personal loan funds for consolidating existing debt will need to do so on their own. Unlike other lenders that offer direct payoff to creditors for debt consolidation, PenFed simply provides borrowers with lump-sum funding.

Hefty Late Fees

PenFed charges hefty late fees. Having a returned loan payment, returned check, or returned ACH transaction may cost you $30, and you may face a late charge of $29 if your payment is more than five days late.

PenFed Credit Union Personal Loan Terms, Rates, and Fees

Loan amounts: $600 to $50,000APR range: 7.99% to 17.99%Loan terms: 12, 24, 36, 48, or 60 months (1 to 5 years)Prepayment penalty: NoneApplication fee: NoneCo-borrowers allowed: YesApproval speed: Within minutesInformation accurate as of Jan. 2, 2024.

Who May a PenFed Credit Union Personal Loan Be Right For?

A PenFed personal loan may be right for the following demographics:
  • Borrowers who need a small loan. With a minimum loan amount of $600 and a $50,000 maximum, PenFed is an option for those in the market for a modest loan.
  • Borrowers who have strong credit. Although the credit union doesn’t publicize the required minimum credit score for a personal loan, there’s no option to include a cosigner on a PenFed Credit Union personal loan. You can apply with a co-borrower if you’re willing to share the loan proceeds with another person.
  • Borrowers looking for a quick decision. Existing PenFed members can apply for a personal loan through their online account. It takes just a few minutes to receive an application decision. 

Who PenFed Credit Union May Not Be Right For

A PenFed personal loan may not be right for the following demographics:
  • Borrowers with bad credit. If you have poor credit, you may have trouble qualifying, since you can’t have a cosigner on a PenFed personal loan.
  • Borrowers looking for a high loan amount. If you need access to funds above $50,000, you’ll have to search elsewhere for a loan.
  • Borrowers who want an easier debt consolidation experience. PenFed does not pay off your creditors directly after you’re approved. Instead, you must pay each creditor individually.

What to Watch Out for With PenFed Credit Union Personal Loans

  • Although there are no PenFed personal loan origination fees, you might incur fees for late payments or if an ACH payment has insufficient funds.
  • If you’re using a PenFed Credit Union personal loan for debt consolidation, you’ll need to pay off your existing creditors manually.
  • Membership isn’t required at the time of application, but to receive loan funds you typically must be a member with a share savings account. A $5 minimum deposit is required.

PenFed Credit Union Personal Loan Eligibility Requirements

  • General requirement. Must become a credit union member.
  • Minimum credit score. Not disclosed.
  • Income requirement. Not disclosed.
  • Maximum debt-to-income ratio. Not disclosed.
  • Cosigners allowed? No.

Repayment Options for PenFed Credit Union Personal Loans

PenFed offers repayment terms of 12 months, 24 months, 36 months, 48 months, or 60 months. You can choose which timeline works best for you after receiving your preapproval offer.If you experience a temporary or permanent hardship during your repayment period, PenFed offers various relief options. For example, it might offer temporary deferment or propose an alternative repayment plan that can make your payments more manageable.To request a financial assistance program, submit a financial hardship request form. You’ll typically get a decision within 30 days.

How to Apply for a PenFed Credit Union Personal Loan

  1. Fill out the online form to check your rate. Existing members can access this form by logging into their account. Nonmembers can simply click on “Check your rate” on the PenFed Credit Union personal loan web page. On the form, include the reason for the loan, the amount you’re requesting, your personal information, annual income, and housing information, and whether you’re applying with a co-borrower.
  2. Enter your employment information. You’ll need to include your employment status, occupation, employer name and contact information, and how long you’ve been employed.
  3. Choose your preapproval offer. Assuming you’ve met PenFed’s requirements by this step, it will provide you with the loan amount, and the rates and terms you’ve been preapproved for. It will also outline details, like the estimated monthly payment and total interest you’ll pay for each option. Review your offer(s) carefully and select an offer that’s right for you.
  4. Read and sign the loan disclosures and notices. You’ll be presented with a page with the terms and conditions of the loan, and related disclosures. Read through it carefully. If you’re comfortable with the terms, check each box to confirm that you’ve read it and agree.
  5. E-sign your loan agreement and receive your funds. You’ll receive a confirmation that your loan is approved, along with your loan details. At this stage you can select how you’d like to receive your funds and electronically sign the lending agreement.

Alternatives to PenFed Credit Union Personal Loans to Consider

PenFed personal loans have pros and cons, as discussed, so it can be smart to compare lenders when searching for online personal loans:
LenderLoan amountsAPR rangeMaximum term
Achieve (formerly FreedomPlus)$10,000 to $50,0008.99% to 35.99%60 months
Avant$2,000 to $35,0009.95% to 35.99%60 months
Best Egg$2,000 to $50,0007.99% to 35.99%60 months
LendingClub$1,000 to $40,0009.57% to 36%60 months
OneMain Financial$1,500 to $20,00018% to 35.99%60 months
Prosper$2,000 to $40,0007.95% to 35.99%60 months
Universal Credit$1,000 to $50,00011.69% to 35.99%60 months
Upgrade$1,000 to $50,0008.49% to 35.99%60 months
(The above information on APR range, loan amounts, and maximum term lengths will be updated weekly, every Monday.)Some other options you might want to consider include:With Lantern by SoFi, you can quickly and easily compare personal loan offers from multiple lenders all in one marketplace. Just fill out one simple form, explore your financing options, and apply for a personal loan that fits your needs.Lantern can help you find personal loan offers.

Frequently Asked Questions

What credit score do you need for PenFed?
Who qualifies for PenFed?
Is it hard to get a loan with PenFed?
Is PenFed a good place to get a personal loan?

About the Author

Jennifer Calonia
Jennifer CaloniaJennifer Calonia is a Los Angeles-based finance writer who has covered the gamut, including student loans, credit card rewards, consumer loans, and debt. Her work has been featured in outlets like Bankrate, NerdWallet, Business Insider, Yahoo Finance, and U.S. News.
Brand namesNo brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.