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PenFed Credit Union: 2023 auto loan review

2023-06-09 00:00:00

At a glance

Rating: 4.3 stars out of 5

Bankrate Score

  • Availability
    Rating: 5 stars out of 5
  • Affordability
    Rating: 2.8 stars out of 5
  • Customer Experience
    Rating: 4.4 stars out of 5
  • Transparency
    Rating: 4 stars out of 5
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About PenFed

  • Moneybag

    Loan amount

    Up to $150,000

  • Credit Good

    Min. credit score

    Not specified

  • Rates

    APR from


  • Funds available in

    Not specified

PenFed auto loans are best for prequalification 

To help you find the right auto loan for your needs, you can receive prequalified loan offers without impacting your credit. If you hesitate to finance due to your credit score, applying with PenFed and receiving quotes can ensure you sign off on what you can afford. The prequalification process also allows you to compare different loan options simultaneously.

PenFed pros and cons

PenFed encourages preapproval, which can be a great way to compare its rates versus competitors, but it comes with unspecified used vehicle restrictions.


  • Checkmark

    Online vehicle buying service

  • Checkmark

    Wide range of loan amounts

  • Checkmark

    Many loan terms available


  • Close X

    Traditional underwriting criteria

  • Close X

    Several potential fees

  • Close X

    Membership requirement

Pentagon Federal Credit Union, more commonly known as PenFed, is a Virginia-based credit union that offers loans for new and used car loans and auto refinance loans. If you are buying a new vehicle PenFed boasts a car buying service that comes with lower rates and vehicle prices. 

While PenFed is a member-based organization, the $5 membership fee is waived for those applying for auto loans.

PenFed versus U.S. Bank

For borrowers looking for similar rates and terms to that of PenFed but prefer in-person support, U.S. Bank is an excellent option. With a nationwide footprint and branches across the country, borrowers can secure new or used vehicle loans or refinance their current ones. U.S. Bank is an especially strong option if you have a previous relationship with the institution. Similar to the credit union experience, bank customers will be offered more competitive rates.  

PenFed versus Consumers Credit Union

A membership-based lender just like PenFed, Consumers Credit Union boasts a very similar experience to that of PenFed. Both lenders have a car buying service available that allows borrowers to shop and secure financing all in one spot. Though Consumers Credit Union discloses slightly less information regarding qualifications, loan amounts and funding timeline. Keep this downside in mind when comparing the two options.

What we like and what we don’t like

Between available discounts and potential fees, PenFed carries several benefits and drawbacks to consider.  

What we like

  • Online vehicle buying service: The program carries additional savings, cash incentives, loan discounts and deductibles.  
  • Wide range of loan amounts: Qualified borrowers can finance amounts up to $150,000.  
  • Many loan terms available: New car and auto refinance loans come with terms between 36 and 84 months, while used car loans range from 36 to 72 months.  

What we don’t like

  • Traditional underwriting criteria: PenFed uses credit scores as the primary criteria for loan approval. 
  • Several potential fees: PenFed has a late charge of $29 and returned payment fee of $30, on top of other potential fees.  
  • Membership requirement: Borrowers must join as a member of the credit union in order to benefit from available rates and terms.   

How to contact PenFed

PenFed boasts customer service in person, over the phone or by email. Specifically, the 24/7 help center allows for questions regarding your loan application to be answered by available agents. To secure help over the phone, PenFed can be reached at 724-473-6333 or 800-247-5626. You can also use the online chat tool to get additional assistance. 

Auto loan types offered 

New and used cars can be purchased through PenFed’s car-buying service

New and used auto loans 

  • Amounts: Up to $150,000
  • Terms: 36 to 84 months 
  • APR: From 5.24%, if using the car-buying service; from 5.94% if not

PenFed’s new and used auto loans' best rates aren't the lowest on the market but are still competitive. Plus, you can get access to added protections to give you a peace of mind, including an extended warranty that covers you when your auto manufacturer’s warranty expires and debt protection if the unexpected happens and you can’t afford to make the monthly loan payments. 

The lowest rates go to those who both have excellent credit and use PenFed's car-buying service. Note that used auto loan rates start at 6.49 percent and their terms cap out at 72 months.


  • Amounts: Up to $150,000
  • Terms: 36 to 84 months
  • APR: From 5.94%

Whether you’re looking to get a lower interest rate, monthly payment that works better for your budget or modify the vehicle’s title, PenFed may be able to assist. According to its site, customers save $108 per month on average by refinancing. Plus, you can refinance up to 125 percent of the amount you owe, allowing you to easily access cash and use it however you see fit.

How to apply for a loan with PenFed

The process to apply for an auto loan with PenFed is fairly straightforward and can be done online, in person at a PenFed branch or over the phone. As with any auto loan application, you can expect a hard credit pull before final approval.

Features and additional perks

PenFed works directly with TrueCar to expedite the car shopping process for its borrowers. This is a significant perk not every lender offers. Drivers can easily search for new or used vehicles in their area. You can specify makes and models while shopping.

Fees and penalties 

PenFed outlines a few fees, including returned loan payments, late charges, automobile lien placement charges and check stop payments. Look out for these additional costs when signing off on your loan agreement.


How Bankrate rates PenFed

Overall score 4.3
Availability 5 PenFed offers high maximum loan amounts and a wide range of repayment terms.
Affordability 3.8 Starting APRs are higher than competitors and PenFed mainly considers traditional underwriting criteria.
Customer experience 4.6 Online access and close to 24/7 support leaves PenFed scoring high for customer service.
Transparency 4 While APRs and fees are available, the option to prequalify is not disclosed.


Bankrate considers 18 data points when rating auto loan lenders. Acceptance criteria, whether rates and fees are available and APR range all influence lender scores. These scores are broken up into four categories.

  • Availability: Loan amounts, repayment options, dealership requirements and state availability all contribute to this category.
  • Affordability: This section houses APR ranges, acceptance criteria, fees and discounts. 
  • Customer experience: How long you have to shop, customer service availability, whether there’s an app and autopay availability are accounted for in this section.
  • Transparency: This category accounts for the availability of fees and rates along with whether prequalification is available.
Editorial disclosure: All reviews are prepared by staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.
Written by
Rebecca Betterton
Writer, Auto Loans and Personal Loans

Rebecca Betterton is a writer for Bankrate who has been reporting on auto loans since 2021. Through her writing, Rebecca aims to provide clarity and accessibility to the automotive loans industry as the cost to finance new and used vehicles continues to climb due to steep inflation.

Edited by Editor, Personal Loans, Auto Loans, and Debt