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PenFed: 2022 Auto Loan Review

2022-05-24 11:56:00

At a glance

Rating: 4.1 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

    $500 to $150,000

  • Credit Good

    Min. credit score

    Not specified

  • Rates

    APR from


  • Funds available in

    Not specified

PenFed features

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

    High minimum APRs

  • Close X

    Traditional underwriting criteria

  • Close X

    Several potential fees

Pentagon Federal Credit Union, more commonly known as PenFed, is a credit union that offers loans for new and used car loans, auto refinance loans and lease buyout 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 also offers key benefits to its members that other lenders may not be able to provide. Drivers borrowing from the Virginia-based credit union can benefit from gap protection, extended warranty and debt protection.

Pros and cons of PenFed auto loans 

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


  • Online vehicle buying service. The program carries additional savings, cash incentives, loan discounts and deductibles.  
  • Wide range of loan amounts. Qualified borrowers can finance a vehicle for as little as $500 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. 


  • High minimum APRs. A minimum APR of over 4 percent is significantly more than competitors. 
  • Traditional underwriting criteria. PenFed uses credit scores as the primary measure 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.  

Who is PenFed best for? 

If you prefer handling financial conversations in-person, PenFed can be a great source for you. With branches across the country, you can get a new or used car loan or an auto refinance loan with the help of a lending officer. And the car buying program offered via PenFed can be great for drivers who are unsure which vehicle is right for them and their budget. 

But starting APRs that are higher than competing lenders means PenFed may not be ideal for borrowers with excellent credit who could find better deals elsewhere. And those high interest rates coupled with the wide range of repayment terms can be especially problematic. A longer repayment term results in more interest being paid over the life of the loan. 

Types of auto loans offered  

Drivers can apply for new and used vehicle and auto refinance loans with PenFed.  

New and used vehicle loans  

Financing a new vehicle through PenFed requires a minimum loan amount of $500 and a max of $150,000. The same goes for a used car and both can be purchased through the car buying program offered by PenFed.  


If you are looking to sign off on an improved loan, PenFed offers refi loans with a range of terms. Terms range from 36 to 84 months and loans can be refinanced between $500 and $150,000. Unfortunately, you are not able to refinance an existing PenFed loan.  

Interest rates and terms  

Finance terms range from 36 to 84 months for new car loans and vehicle refinance loans. Used auto loans can be financed from 36 to 72 months.  

The most competitive rates will go to those with excellent credit. 

Loan product Starting APR
New car 4.44%
Used car from a dealer 5.24%
Used car from an individual 5.84%
Lease buyout 6.04%
Auto loan refinance 5.24%

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.  

    1. Gather necessary information. When you are ready to apply, be prepared to provide your employment and annual income along with basic identity information.
    2. Choose a loan product. After exploring the site, determine which loan product you are interested in. 
    3. Apply. Follow the prompts depending on if you are a member yet or not.   

If you choose to use the available PenFed car buying service, do the following:  

    1. Search for your vehicle. Check out the extensive online inventory of both new and used cars.  
    2. Get preapproved. Once setting your sights on a vehicle connect with a certified dealer to ensure membership pricing. 
    3. Apply online. Once your online application has been submitted, connect with PenFed over the phone to finalize your loan and receive your check and loan documents. 
    4. Visit the dealer. Give the vehicle a test drive and inform the dealership you have already been approved by PenFed.  

Auto loan requirements  

PenFed holds a few restrictions in terms of refinancing, be sure your vehicle fits the following criteria if you are considering a loan.  

  • New vehicle refinance: vehicle’s model year must be 2021 or newer 
  • Used vehicle refinance: pre-owned vehicles or vehicles with over 7501 miles  

Customer service  

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. 

How Bankrate rates PenFed

Overall score 4.1  
Availability 5.0 PenFed offers high maximum loan amounts and a wide range of repayment terms.
Affordability 4.8 Starting APRs are higher than competitors and PenFed mainly considers traditional underwriting criteria.
Customer experience 4.4 Online access and close to 24/7 support leaves PenFed scoring high for customer service.
Transparency 4.0 While APRs and fees are available, the option to prequalify is not disclosed.
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
Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely borrowing money to purchase a car.