PenFed auto loans: 2024 review

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. Prequalifying with multiple lenders allows you to compare different loan options simultaneously.

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 purchasing, 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.

Do you qualify?

PenFed doesn't share many application requirements on its website. It statses it only finances vehicles with fewer than 125,000 miles. 

Other applicant requirements will probably be similar to most other lenders. You generally need a credit score of at least 600 to qualify for an auto loan. It may also look at your income to see if you have enough cash flow to make your monthly payment.

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. 

PenFed versus Consumers Credit Union 

Consumers Credit Union offers similar perks to PenFed. Both lenders have a car buying service available that allows borrowers to shop and secure financing all in one spot. 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 discounts and potential fees, PenFed has 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, used car and auto refinance loans come with terms between 36 and 84 months. 

What we don’t like

• Traditional underwriting criteria: PenFed uses credit scores as the primary criteria for loan approval. This is common among banks and credit unions but makes it harder for people with past struggles to access credit.
• Several potential fees: PenFed has a late charge of $29 and returned payment fee of $30, on top of other potential fees. Some lenders have discontinued all fees.
• Membership requirement: Borrowers must join as members 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. PenFed can be reached by phone at 724-473-6333 or 800-247-5626. You can reach a customer service representative on the phone between 8 a.m. and 8 p.m. EST, Monday through Saturday. You can also use the online chat tool to get additional assistance 24/7.

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. 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, or 6.79 percent if you are not using the car-buying service.

Plus, you can purchase added protections to give you peace of mind.

PenFed sells an extended warranty that covers you when your auto manufacturer’s warranty expires and debt protection for if you can’t afford to make the monthly loan payments. If you are interested in these products, compare them to options sold by other providers.

Refinancing 

• 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 $191 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

Applying 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.