PenFed Personal Loans Review 2024

PenFed is best for consumers who want a personal loan from a credit union instead of a major bank or online provider. Although PenFed was created to serve U.S. military members and veterans, in addition to federal employees and retirees, it has expanded its membership to nonmilitary members.

Anyone can apply for a loan through PenFed; however, if you’re approved and choose to move forward with your loan, you’ll need to become a member of the credit union. Becoming a member is easy, and it typically only takes a few minutes. While the membership is free, you’ll need to deposit at least $5 into a new PenFed savings account.

PenFed Personal Loan Purposes

Loan Amounts and Terms

• Loan amounts. Personal loan amounts range from $600 to $50,000. These amounts are similar to other personal loan lenders.
• Loan terms: You can choose from a 12-, 24-, 36-, 48- or 60-month term.

Personal Loan Costs

• APR. Rates range from 7.99% to 17.99%.
• Origination fees. PenFed does not charge any origination fees.
• Late fees. PenFed may charge a late fee of up to $50.
• Prepayment penalty fees: PenFed does not charge any prepayment penalties. This means borrowers can pay off their loans at any time without additional fees.

Perks and Features

• Easy membership access. While some credit unions have strict membership rules, you only need to create a PenFed account and deposit $5 to be eligible for PenFed personal loans.
• Use the mobile app. PenFed has a mobile app where you can make payments and track your loan. If you end up using your PenFed savings account regularly, you can also deposit checks with the mobile app.

Personal loan applications are approved or declined based on a number of factors. All lenders have their own unique underwriting requirements, but these typically include information from an applicant’s credit profile and other factors that demonstrate the ability to repay the loan, such as income. Meeting the requirements below won’t guarantee approval, but they can help you decide if a personal loan is the right fit for you.

Credit Score Requirements

PenFed requires a minimum credit score of 650. While this score can help you qualify, it won’t get you the most favorable terms. We recommend a score of 720 to receive the lowest interest rates and largest loan amounts.

Income Requirements

PenFed does not list a minimum income necessary to qualify for a personal loan. Use the prequalification form on PenFed’s website to verify if your income is sufficient.

Co-signers and Co-borrowers

PenFed allows applicants to include a co-borrower, who is equally responsible for monthly payments, on their application to help qualify for more favorable terms. If your co-borrower has a better credit score or higher income than you do, you may be able to get a lower rate and save money. Co-signers, on the other hand, who become responsible to repay the loan only if the primary borrower fails to do so, are not permitted.

Related: Co-Borrower Vs. Co-Signer: Which Should You Use On Your Loan?

Applying for a personal loan typically involves prequalifying for a rate, submitting a formal application and awaiting loan approval. Follow these steps to apply for a PenFed personal loan:

1. Check your interest rate. Before applying for a personal loan, you can fill out a prequalification form. You’ll submit the loan purpose, term and desired loan amount. You’ll also include your address, date of birth, Social Security number (SSN), annual income, monthly rent or mortgage payment and if you’re applying with a co-borrower.
2. Submit your information. After you submit your information, PenFed will show if you qualify for a loan and the approximate interest rate you’ll receive. Prequalifying results only in a soft credit check—which has no impact on your credit score.
3. Complete the official application. After prequalifying, submit your formal application. The final application will require a hard credit check, which will appear on your credit report and can temporarily drop your score by up to five points. You may also have to submit additional information to complete the application.
4. Become a PenFed member. While you don’t have to be a PenFed member to apply for a personal loan, you must become one to finalize your loan and receive the funds. You must keep a minimum balance of $5 in a PenFed savings account to maintain your eligibility.
5. Start making payments. Once the loan is finalized and the funds are sent, you can log in to your account and check your payment due date. At this point, you can sign up for automatic or manual payments.

Time to Receive Funds

You may be able to receive funds within one to two business days if you select direct deposit or ACH. If you prefer a check, it may take five to seven business days to arrive. If you want to receive your check sooner, you’ll need to visit a local PenFed branch to pick up your check or pay for expedited shipping.

PenFed Credit Union has a TrustPilot rating of 4.6 out of 5 from about 400 reviews. However, its
Better Business Bureau (BBB) rating is 1.17 out of 5, and there were 360 complaints reported and closed within the last three months. Most of the recent complaints made were regarding account issues, such as pending applications, payment complications and mischarges.

The best personal loans offer competitive rates, flexible loan amounts and a wide range of terms. Here’s how PenFed personal loans stack up against other popular lenders:

PenFed vs. Navy Federal

Navy Federal offers two types of personal loans. Its basic personal loan includes terms of up to 60 months and loan amounts ranging from $250 to $50,000; its home improvement personal loan has terms of up to 180 months. If you plan on using your funds for home improvement projects, Navy Federal may be your best option.

However, Navy Federal charges higher interest rates than PenFed, with a minimum rate of approximately 7% compared to PenFed’s 6%. Membership criteria for Navy Federal are also more strict than PenFed. To become a member, you or one of your family or household members must have ties to the armed forces, Department of Defense or National Guard.

PenFed vs. USAA

The maximum loan amount available through USAA is $20,000—far less than what PenFed offers. Term lengths for a USAA loan range from 12 to 84 months but also depend on how much you want to borrow. Unlike PenFed, you must be a current or former military member or family member to be eligible for USAA membership.

Related: USAA Personal Loans Review

PenFed vs. SoFi®

SoFi offers personal loans ranging from $5,000 to $100,000, which is much higher than PenFed’s $50,000 limit. SoFi’s starting interest rate is also lower than PenFed’s but is available only to highly qualified applicants.

If you need to borrow a large amount, SoFi may be a better option. However, if you need less than $5,000, PenFed’s $600 minimum limit may be beneficial to you.

Related: SoFi Personal Loans Review

We reviewed PenFed based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We rated PenFed based on the weighting assigned to each category:

• Loan cost: 35%
• Loan details: 20%
• Eligibility and accessibility: 20%
• Customer experience: 15%
• Application process: 10%

Within each category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at credit score requirements, whether the lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated PenFed’s support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.