PenFed Credit Union Personal Loans Review 2024

Pros Explained

• Broad range of loan amounts: With some lenders, you can only borrow $3,000 or more. If you have a smaller expense, you may be forced to borrow more than you need, and more interest could accrue. But with PenFed, the minimum loan amount is $600, which makes it great for small personal loans.
• Co-borrowers permitted: Not all personal loan companies allow people to apply with a co-signer or co-borrower, but PenFed encourages applicants to have a co-borrower to improve their chances of getting a loan.
• Financial hardship programs available: PenFed has financial hardship programs that can help you avoid defaulting on your loans and damaging your credit if you lose your job or become seriously ill.

Cons Explained

• Term maximum is 60 months: Some personal loan companies offer loan terms as long as seven years, but PenFed’s maximum loan term is five years (60 months). If you’re borrowing a large amount, the shorter term will mean a larger monthly payment than you may get with a lender that offers longer terms.
• It can take several business days to receive funds: Some lenders offer loan disbursements the same day you apply, but PenFed’s loans typically take longer. Depending on whether you select direct deposit or a check, it could take one to seven business days to receive your loan funds.

Types of Personal Loans Offered by PenFed

PenFed Credit Union only offers unsecured personal loans, meaning you don't need to use a car or home as collateral. The company doesn't stipulate any specific restrictions, so its personal loans can be used for a wide range of expenses, including:

• Debt consolidation
• Medical bills
• Home renovation projects
• Veterinarian bills
• Car repairs
• Vacations
• Weddings

Time To Receive Personal Loan Funds

While some lenders boast same-day funding, PenFed can take a bit longer to process and disburse loans. Depending on your loan application and the disbursement method, it can take up to seven days to receive your loan funds.

Opting for electronic transfer is the fastest way to get the money; loan funds disbursed via electronic transfer usually arrive within one to two business days, while a paper check will take five to seven days.

Borrower Requirements

To qualify for a loan from PenFed Credit Union, you must meet the following requirements:

• You must be the age of majority in your state (18 years old in most states).
• You must have a verifiable source of income.
• You must have a good or better credit score, or apply for a loan with a creditworthy co-borrower.
• You must have a valid Social Security number or individual taxpayer identification number.

PenFed Personal Loan Features

PenFed offers the following benefits:

• Member discounts: Membership to the PenFed Credit Union gives you access to valuable discounts. You can get discounts on car insurance, auto rentals, tax preparation services, financial literacy programs, and purchases at select retailers.
• Financial hardship protection: If you experience a significant financial hardship, such as a job loss, death of a loved one, or illness, you may be eligible for PenFed’s financial hardship program. If you qualify, you can temporarily pause your payments.

Co-Signers, Co-Applicants, Co-Borrowers

If your credit isn’t as strong as it could be or you have other debt, applying with a co-signer or co-borrower can improve your chances of qualifying for a loan. Although not all lenders allow co-borrowers, PenFed does, and adding a co-borrower with a strong credit score to your application can help you qualify for a better rate.

Can You Refinance With PenFed?

PenFed Credit Union does now allow personal loan refinancing. However, it does offer student loan refinancing.

Customer Service

PenFed offers an online Help Center, as well as customer service reps that you can talk to via phone. There's also a mobile app you can use to manage your accounts, make loan payments, and transfer funds. The app is available for both iOS and Android devices.

Customer Satisfaction

PenFed is a well-respected credit union. It was ranked 6th out of 22 lenders in the 2022 J.D. Power Consumer Lending Satisfaction Study and scored above the industry average. PenFed did not make the 2023 study. PenFed has a Trustpilot score of 4.4 out of 5, which is considered excellent.

PenFed Credit Union Membership Requirements

If you're applying for a personal loan, you do not need to be a member at PenFed. If you are approved, you'll be granted membership to PenFed once you receive the loan—the credit union will open a savings account for you with a pre-loaded $5.

To join PenFed outside of a personal loan application, you can sign up online. Anyone is allowed to join, and all you need to do is provide your information and deposit $5 into an account.

How to Apply for a PenFed Personal Loan 

With PenFed, you can check your eligibility for a loan and apply entirely online. Use the pre-qualification tool to check your rate without affecting your credit score (PenFed will do a soft credit check). Based on the basic information you provide, PenFed will give you several loan offers, and you can choose the term that best fits your needs.

If you proceed with the application, PenFed will ask you to provide your Social Security number or taxpayer identification number, address, birth date, and income. You will have to consent to a hard credit check.

If you aren’t already a PenFed credit union member, you’ll also have a PenFed savings account opened in your name with a pre-loaded $5.

You should receive your loan funds in one to seven business days, depending on you choose to have the money disbursed.

Alternative Personal Loan Lenders

Other Banking Services and Loans Offered by PenFed

PenFed also offers checking and savings accounts, certificates of deposit, IRAs, auto loans, mortgages and home equity loans, student loans and student loan refinancing, and credit cards.

The Bottom Line

PenFed is a good option for borrowers looking for a small personal loan amount. It offers loans for as little as $600—far lower than other lenders—so you can borrow only what you need, and interest rates are competitive, especially for those with good or better credit scores.

However, PenFed’s loan terms are limited. The maximum term is five years (60 months), so those borrowing larger sums may want to consider other lenders that offer longer loan terms to get a more manageable monthly payment.

What Is PenFed Credit Union?

PenFed Credit Union is the Pentagon Federal Credit Union. It's open to anyone who wants to join, and provides banking and loan products and services. It was established in 1935, and now services 2.9 million people worldwide.

Is PenFed Credit Union Legitimate?

Yes, PenFed Credit Union is a legitimate credit union. It's full name is Pentagon Federal Credit Union, and it was established in 1935. Customers money at PenFed is insured by the National Credit Union Administration (NCUA).

How Do I Get a Personal Loan at PenFed?

You can get a personal loan at PenFed by applying online. Fill in your information and you can check your personal loan rates and offers without a hard credit check. If you decide to get the personal loan with PenFed, you will complete the rest of the application, select how you want to receive the funds, and then wait one to seven business days. Once you get the loan, PenFed will open a member savings account for you with pre-loaded funds of $5.

Methodology

To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more. To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas:

• Loan costs (advertised APR, fees, and six other factors): 29.25%
• Loan terms (loan amount, repayment term, and three other factors): 22.25%
• Borrowing requirements (credit score, membership requirement, and six other factors): 28.5%
• Additional features (online application, pre-qualification, and eight other factors): 20%

Learn more about how we evaluated personal loans in our complete methodology.