PenFed may be a good fit for borrowers with fair credit who need access to small personal loans. While this lender offers the option to pre-qualify for a loan, it's not transparent about its eligibility requirements for borrowers.
- Pros & Cons
- Key Takeaways
Applicants can pre-qualify with a soft credit check
Allows joint applications
Accounts can be managed online or via mobile app
Eligibility requirements are not disclosed online
Only offers personal loans up to $50,000
Borrowers must belong to PenFed Credit Union
- PenFed is an excellent option for borrowers who need access to low, flexible loan amounts.
- Funding is quick, and borrowers may receive funds as soon as the next day.
- The credit union’s interest rates are competitive, and it charges no origination fees.
- Borrowers can apply for financial hardship protection if they struggle to make payments.
- APR Range 5.99% to 17.99%
- Loan Amounts $600 to $50,000
- Loan Terms 12 to 60 months
- Recommended Minimum Credit Score Not disclosed
- Average Origination Fee Not applicable
- Late Fee $29
- Applicants can pre-qualify with a soft credit check: Prospective PenFed borrowers can use the credit union’s rate checking tool to see what annual percentage rate they’re likely to qualify for. This process only requires a soft credit check and does not impact the applicant's credit score.
- Allows joint applications: Applicants can add a co-borrower to their application to help them qualify for a lower interest rate.
- Accounts can be managed online or via mobile app: In addition to PenFed’s online account tools, borrowers can manage their personal loans via a mobile banking app. The credit union’s app lets borrowers make loan payments, update their profiles, and otherwise manage loans, credit cards, and accounts.
- Eligibility requirements are not disclosed online: PenFed requires borrowers to become credit union members but does not share additional eligibility requirements. Even though applicants can pre-qualify without a hard credit check, this lack of transparency makes it difficult for borrowers to estimate their approval odds.
- Only offers personal loans up to $50,000: Many traditional and online lenders let borrowers access $100,000 loan amounts or more. PenFed imposes a maximum of $50,000 on each personal loan, making it less appealing to borrowers who need to cover major expenses.
- Borrowers must belong to PenFed Credit Union: While prospective borrowers do not need to be PenFed members at the time of application, they must join before loan funding. That said, PedFed automatically opens and funds an account for each new borrower to streamline this process.
Pentagon Federal Credit Union—often referred to as PenFed—is a credit union that offers unsecured personal loans online and through its network of branches. Loans range from $600 to $50,000, and they can be repaid over loan terms between 12 and 60 months.
PenFed’s annual percentage rates (APRs) range from 5.99% to 17.99%, depending on the borrower's creditworthiness and the length of their PenFed membership. The credit union does not charge personal loan borrowers origination fees or prepayment penalties, but late payments incur a $29 fee.
PenFed Credit Union was founded in 1935 and is headquartered in McLean, Virginia. This financial institution offers customers a wide range of products, including personal loans, auto loans, mortgages, credit cards, and checking and savings accounts. And, while the credit union is a popular choice among U.S. service members, membership is not limited to military members.
PenFed’s website indicates it serves customers in all 50 U.S. states and on military bases in Puerto Rico, Guam, and Japan.
Type of Personal Loans Offered by PenFed
Loans can be used for various purposes, including debt consolidation, home improvements, medical and dental expenses, relocation, weddings and events, and other large purchases. The credit union doesn’t specifically identify prohibited uses for its personal loans, but lenders generally prohibit using funds for things like post-secondary education and illegal activities.
PenFed doesn’t disclose its minimum borrower qualifications online. However, its rate-checking tool makes it easy for prospective borrowers to see what APR they’re likely to qualify for without affecting their credit.
Pre-qualifying for a loan can be useful if you're interested in comparing rates and terms from different lenders before you submit a full application.
Time to Receive Funds
Generally, PenFed borrowers who select a direct deposit option receive loan funds within one to two business days after application verification. Those who opt to receive their loan by check can expect funds within five to seven business days. However, these times vary based on the borrower’s financial institution and what time of day their loan is processed. What’s more, some customer reviews report longer funding times than those mentioned on PenFed’s website.
PenFed Personal Loan Features
Personal Loan Calculator
PenFed makes it easy to estimate your loan payment with its personal loan calculator. The calculator requires users to enter their estimated credit rating and desired loan amount. Based on that information, it estimates a monthly payment range and APR range. You can also customize your estimated monthly payment by selecting the desired loan term.
Prospective borrowers can see what rates they’ll qualify for without a hard credit inquiry. To do so, navigate to “Check Your Rate” from the PenFed personal loans page, indicate whether you’re already a PenFed member, and then enter the necessary personal information. Checking your rate does not impact your credit score.
PenFed allows joint applications, which can help some borrowers qualify for a lower interest rate. To take advantage of this option, select “Yes” under “Applying with a Co-Borrower” when checking your rate.
Financial Hardship Assistance
Eligible PenFed borrowers can take advantage of the credit union’s financial hardship assistance program. To do so, borrowers must submit a financial hardship form describing the reason for the hardship and the borrower’s financial situation. The credit union’s loss mitigation analysts work with each applicant to determine the nature of the hardship and find a solution that meets their needs.
If you're facing financial hardship and unable to make your loan payments, lenders may be willing to work with you to adjust your repayment term.
Apply for a PenFed Personal Loan
If you’re considering a personal loan from PenFed, you can use the credit union’s personal loan calculator to estimate your monthly payments. You can also check the rate you’re likely to qualify for with just a soft credit inquiry that won’t impact your credit score.
After checking your rate, take the following steps to complete your loan application:
- Choose from pre-approved loan offers: Based on the information you provide during the pre-qualification process, PedFed generates loan offers for which you are pre-approved.
- Verify your application and provide documentation: As part of the application process, you will be asked to provide details that verify your identity, employment, and income. PenFed simplifies this process by offering applicants a secure upload portal.
- Await approval: Depending on your application, you may receive instant approval, but it can take a few days to receive a response. Applicants typically receive loan application status updates via email and phone. If you’re rejected for the loan, you will receive an adverse action letter by mail.
- Join PedFed: Prospective borrowers don’t need to be credit union members to apply for a personal loan through PenFed. However, it is necessary to join before the credit union funds the loan. After loan approval, PenFed opens a savings account in your name and preloads it with $5 to establish your membership. If you’re not approved, your credit is not impacted, and you are not required to join as a member of the credit union.
Can I Refinance a Personal Loan With PenFed?
PenFed does not disclose whether borrowers can refinance their existing PenFed loans with another PenFed personal loan. That said, PenFed loan funds can be used to consolidate third-party debts.
Current and prospective PenFed borrowers can contact the credit union via telephone, Monday through Friday from 7 a.m. to 11 p.m. Eastern time, Saturday from 8 a.m. to 11 p.m. ET, and Sunday from 9 a.m. to 5 p.m. ET.
PenFed also offers an online help center where users can search for common questions and a chatbot to answer specific questions. Finally, a support request form lets users describe their questions and choose how they’d like to be contacted by a service agent.
PenFed reviews are generally positive, and it receives 4.6 out of 5 stars across over 480 Trustpilot reviews. Satisfied PenFed customers find that the credit union provides high-quality and responsive customer service. Others share that the application process is streamlined, and rates are competitive.
Still, some personal loan customers are disappointed with the credit union’s application and approval process. More specifically, some customers with strong credit profiles mention problems getting approved; others report a lack of communication from PenFed when awaiting approval. Similarly, some borrowers report extended approval and funding times.
PenFed customers can log in to their account online by clicking on “Login” from the personal loans page. PenFed also offers a mobile banking app for Android and iOS users that lets borrowers update their banking profiles, make payments, and otherwise manage their personal loans.
How PenFed Compares to Other Personal Loan Companies
Both PenFed and PNC are traditional financial institutions that offer personal loans online and at their branches. Neither charges prepayment penalties or origination fees, and APR ranges are comparable, with PNC charging between around 6.39% and 16.39%, depending on your location.
That said, there are a few key differences between the two providers:
- Both PenFed and PNC offer varying loan amounts and APRs between states. PNC offers a customized borrower experience where applicants can enter their zip code to see available loan offers. Applicants can access PenFed’s available offers during pre-qualification.
- PNC does not offer pre-qualification with a soft credit inquiry like PenFed. Instead, prospective borrowers must submit a complete application with PNC to view specific loan offers.
- PNC borrowers are limited to $35,000 loan amounts, whereas PenFed offers a maximum loan limit of $50,000. PenFed also offers lower minimum loan amounts in many states.
- Neither lender is very transparent about personal loan qualifications like credit score and income requirements.
PNC and PenFed offer comparable APRs and fee structures, but PenFed may be the better option for borrowers who want to see what rates they’ll qualify for without submitting a full loan application. What’s more, PenFed offers a wider range of loan amounts and more flexible repayment terms.
Read our full review of PNC here.
PenFed Credit Union is a good option for borrowers with fair credit who only need access to a small loan. The pre-qualification process makes it easy to see the rates you’re likely to qualify for without any impact on your credit score. Personal loan amounts are also flexible and start at just $600, so you don’t have to borrow more than you need. That said, some borrowers may feel limited by the $50,000 maximum.
Still, loan repayment terms range up to five years, and APRs are more competitive than those available through some online lenders. Applicants can also add a co-borrower, which may help them qualify for a lower interest rate. Finally, while you don’t have to be a PenFed member or a member of the U.S. military to apply, the credit union is an excellent resource for service members.
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders. We collected over 25 data points across more than 50 lenders including interest rates, fees, loan amounts, and repayment terms to ensure that our content helps users make the right borrowing decision for their needs.
PenFed. "Personal Loans." Accessed Nov. 29, 2021.
PenFed. "About Us." Accessed Nov. 29, 2021.
PenFed. "How to Apply for Personal Loans." Accessed Nov. 29, 2021.
PenFed. "Application." Accessed Nov. 29, 2021.
Trustpilot. "PenFed Credit Union Reviews." Accessed Nov. 29, 2021.
PenFed. "Mobile App." Accessed Nov. 29, 2021.
PNC. "Personal Loans." Accessed Nov. 29, 2021.