There are different reasons for getting a personal loan. You may want to consolidate debt or make home improvements. Or you may need a loan for an unexpected expense.
Regardless of the reason, it’s important to choose the right lender when you plan to borrow.
PenFed Credit Union, short for Pentagon Federal Credit Union, is one option you might consider when you need a personal loan.
PenFed offers personal loans of up to $50,000 with low competitive rates for eligible borrowers.
This PenFed review offers a closer look at how loan options work to help you decide if it’s right for you.
Pros and Cons of PenFed Credit Union
While getting a personal loan from PenFed has some advantages, there are also some potential drawbacks. Weigh these pros and cons before applying for a loan.
Pros
- Check your loan rates without affecting your credit scores
- No prepayment penalties, origination fees, or hidden fees of any kind
- Get funding as soon as the next business day
- Become a member automatically when you apply for a loan
- Apply for a personal loan with a coborrower
- Competitive, low fixed interest rates
- Financial hardship program for borrowers
- Members enjoy special discounts and benefits
- User-friendly mobile app and website
Cons
- No autopay discount
- No option to change your loan payment due date
- No direct payment to creditors for debt consolidation
Overall, there’s a lot to like about PenFed. Consider how much you need to borrow and how long you’ll need to pay back your loan. Again, if you need to borrow more than $50,000 or want a loan term longer than five years, you may need to consider a different lender.
Top Features of PenFed Credit Union
If you’ve never belonged to a credit union before, you may not be aware of just what they have to offer to members. Here are some of the top features and benefits associated with PenFed Credit Union.
Who Is a PenFed Personal Loan For?
PenFed personal loans are designed for borrowers with good credit and consistent income who need to borrow between $600 and $50,000. You might consider a PenFed personal loan if you:
- Are already a PenFed member or are interested in joining the credit union
- Want a personal loan with a low fixed rate
- Are interested in avoiding prepayment penalties and loan origination fees
- Need or want to apply with a co-borrower
- Need up to 60 months to pay back what you borrow
- Don’t want to have to provide collateral for a loan
These loans are suited for borrowers who want an unsecured loan option with competitive interest rates. If you need to borrow more than $50,000, then a PenFed personal loan may not be the best fit.
Where Will You Find the Best Personal Loan Rates?
Finding the right lender will save you money. The best way to know if you’re getting a competitive loan rate is to compare offers from competing lenders like those below.
What Is PenFed Credit Union?
PenFed Credit Union was established in 1935 and currently serves approximately 2.5 million members.
PenFed operates in all 50 states, with headquarters located in Tysons, Virginia.
The credit union was originally created to serve military members, veterans, and their families but has since expanded its membership to include federal employees as well as those without military affiliation.
Today, PenFed offers personal loans as well as other banking products and services, including checking and savings accounts, credit cards, auto loans, and mortgages.
Compare PenFed to Other Lenders
PenFed is not the only option for getting a personal loan online. You might consider other banks, credit unions, and online lenders. Before choosing a personal loan, it’s helpful to compare rates, terms, and features across different lenders.
Here are three other personal loans you might consider.
Marcus by Goldman Sachs
Marcus by Goldman Sachs offers personal loans of up to $40,000, slightly less than what you can borrow with PenFed. Marcus personal loans have no fees and low fixed rates, though the lowest rate is above the lowest rate offered by PenFed.
SoFi
SoFi offers personal loans ranging from $5,000 to $100,000, which may be appealing if you need a larger loan amount. Rates are fixed, though the lowest rate is also above the lowest rate offered by PenFed. However, eligible borrowers can receive same-day funding.
Navy Federal Credit Union
Navy Federal Credit Union serves military members, veterans, and their families. Loans range from $250 to $50,000 and rates are fixed, though the lowest rate is higher than PenFed’s lowest rate.
What Kinds of Loans Does PenFed Credit Union Offer?
PenFed offers personal loans and personal lines of credit. The main difference between the two is that a personal loan provides you with a lump sum of funding while a line of credit can be drawn against as needed, similar to a credit card.
Some of the options for using PenFed personal loans include:
- Debt consolidation
- Home improvement
- Medical and dental expenses
- Vehicle repairs
- Weddings
- Vacations
- Large expenses
- Other life events
PenFed personal loans are fee-friendly, with no origination fees, prepayment penalties, or hidden fees of any kind.
You can check your rates without affecting your credit. Once you’re approved for the loan, you can get next-day funding.
You don’t need to be a PenFed Credit Union member just to apply for a loan.
However, if you decide to borrow from PenFed, you’ll need to complete the membership process and open a PenFed savings account.
This can be done online, and it takes just a few minutes. You will need to make a minimum deposit of at least $5 into your PenFed account.
The PenFed personal line of credit allows you to borrow up to $25,000 at low fixed rates. If approved, you can get free checks to use to make withdrawals or purchases against your credit line anywhere you would use a credit card. You only pay interest on the amount of your credit line you use.
How to Get Started
The first step in applying for a personal loan with PenFed is checking your rate. You can do this online, and it won’t affect your credit scores. You’ll be given a selection of pre-approved loan offers to choose from. If you see one that fits your needs and budget, you can move forward with the full loan application process.
You’ll need to give PenFed some basic information, including your:
- Name
- Date of birth
- Social Security number
- Address
- Phone number and email address
- Annual income
- Housing payment
You’ll also need to tell PenFed how much you want to borrow, what you need the money for, and your desired repayment term. If you’re applying with a co-borrower, you’ll need to provide their personal information as well.
At the time you apply for a personal loan, PenFed will create your membership account. You’ll need to provide a routing number and a bank account number to make your initial $5 deposit into your PenFed savings account.
Once your loan is approved, you can get funding in as little as one to two business days. There’s no application fee or origination fee to get a PenFed personal loan.
Rating the Features
Before committing to any lender, it’s important to understand how it measures up. Here’s more on what you can expect if you decide to borrow with PenFed.
User Experience
Applying for a personal loan with PenFed is easy, and you can do so online. You have the option to check your rates first before going ahead with the full loan application. If approved, loan funding is fast if you choose direct deposit. You can also opt for a paper check, which can take five to seven business days. Customer service is available if you need help 24/7.
Fees and Rates
PenFed offers some of the most competitive rates on personal loans among online lenders. In terms of fees, these are minimal. Again, you won’t pay an origination fee or application fee and you won’t be hit with a prepayment penalty if you decide to pay the loan off early.
Transparency
PenFed offers information about its personal loans in a straightforward way. The loan application process walks you through everything you need to provide, step by step, so you don’t have to worry about missing anything along the way. PenFed also saves you the additional trouble of creating a member account by doing it for you at the time you apply for a loan.
Flexibility
You get flexibility with PenFed loans in that you can use them to meet a variety of financial needs. Whether you need money for a major car repair or just want to get ahead with expenses, you can use a PenFed personal loan for those goals.
Customer Support
You can access your PenFed account online or through the free mobile app, which is available in the App Store and Play Store. If you need answers to questions, there’s an extensive help center, and you can send a secure message to customer support online 24 hours a day, 7 days a week, 365 days a year.
Bottom Line
PenFed Credit Union could be a good option if you’re looking for a personal loan of up to $50,000 and want a great rate.
If you’re approved, you may also consider opening other accounts with PenFed, such as Free Checking or one of PenFed’s credit cards.
If you’re ready to take the next step, you can check your rates with PenFed and begin your loan application today.
Frequently Asked Questions (FAQs)
PenFed does not limit personal loans to military members. Anyone can apply. But you will need to become a PenFed member before you can be approved for a loan. You can complete your membership application at the same time you complete your loan application.
Generally, you’ll need a good to excellent credit score and steady income to get approved for a PenFed personal loan. If you have less than perfect credit, you may still be able to get approved by applying with a co-borrower. A coborrower could also help you to secure a lower interest rate on a loan.
PenFed’s loan application and approval process are fairly quick. Once you’re approved, it’s possible to get your loan funded within one to two business days via direct deposit. If you prefer a paper check, that may take five to seven business days to arrive after approval.
PenFed does not charge an origination fee for its personal loans, something that you might pay with other lenders. You also won’t pay an application fee or a prepayment penalty fee if you repay your loan at an accelerated pace. PenFed, does, however, charge fees for late payments and returned payments.
