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PenFed auto loans: 2024 review

2024-02-22 01:00:00

At a glance

Rating: 4.4 stars out of 5

Bankrate Score

  • Availability
    Rating: 4.6 stars out of 5
  • Affordability
    Rating: 3.3 stars out of 5
  • Customer Experience
    Rating: 4.6 stars out of 5
  • Transparency
    Rating: 5 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

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.

PenFed pros and cons

PenFed encourages prequalification, which can be a great way to compare its rates versus competitors, but the lender puts restrictions on which used vehicles you can fund with its loans.

Green circle with a checkmark inside


  • Online vehicle buying service
  • Wide range of loan amounts
  • Many loan terms available
Red circle with an X inside


  • Traditional underwriting criteria
  • Several potential fees
  • 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 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. 

Read our PenFed vs. U.S. Bank breakdown

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.

See our PenFed vs. CCU comparison

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.


  • 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.

Features and perks

PenFed works with TrueCar to expedite the car shopping process for its borrowers. While other banks and credit unions have a similar partnership, not all offer a rate discount for using it. 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 4.4
Availability 4.6 PenFed offers high maximum loan amounts and a wide range of repayment terms.
Affordability 3.3 PenFed doesn’t offer flexible eligibility criteria and charges several fees.
Customer experience 4.6 Online access and 7-day customer support give PenFed a high score.
Transparency 5 APRs and fees are available, and you can prequalify to preview these figures.


The Bankrate team assessed more than 35 auto lenders to find the best. Bankrate considered 18 criteria, such as acceptance criteria, loan amounts and APR range. These scores are broken into four categories.

  • Availability: Loan amounts, repayment options, dealership requirements and state availability all contribute to this category. Lenders that serve customers nationwide with flexible loan amounts rank higher.
  • Affordability: This section houses APR ranges, acceptance criteria, fees and discounts. Lenders with the lowest rates, fewer fees and most generous acceptance criteria receive higher scores.
  • Customer experience: Our team looked at how easy it is for customers to apply for and manage their loans. Criteria include how long you have to shop, customer service hours, whether there’s an app and autopay availability.
  • Transparency: This includes prequalification and disclosure of rates and fees. We favored lenders that make it easy for customers to preview possible costs.
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 and Auto Loans