While searching for a personal loan, you may come across PenFed and SoFi — two lenders that offer loans with competitive rates. Founded in 1935, PenFed is a federal credit union that serves almost 3 million members. SoFi is an online lender that offers a variety of financial products, including personal loans with optional fees.

These two lenders both have stellar ratings from Bankrate’s editorial team. However, comparing their differences can help you determine which option could better fit for your unique borrowing needs.

PenFed vs. SoFi at a glance

PenFed and SoFi offer competitive starting rates. But some key differences — such as loan amounts, maximum advertised rates and repayment terms — make them a better fit for certain types of applicants.

Penfed SoFi
Bankrate Score 4.7 4.8
Better for
  • Low APR range
  • Small loan amounts
  • Large loan amounts
  • Long repayment terms
Loan amounts $600-$50,000 $5,000-$100,000
APRs 7.99%-17.99% 8.99%-25.81% (with autopay and direct deposit discount)
Loan term lengths Up to 60 months 24-84 months
Fees $29 late payment fee (5-day grace period) Optional fees
Minimum credit score 700 680
Time to funding 1-2 business days As fast as the same business day

PenFed personal loans

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  • Competitive APR range.
  • Wide range of loan amounts.
  • Financial hardship assistance available.
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  • Lower maximum loan amount.
  • Longer funding speed.
  • Membership required.

PenFed offers loans up to $50,000 with a low APR range and no origination fees. Qualified applicants can borrow as little as $600, which makes it a good choice if you only need to borrow a small amount of money for just about any purpose. To qualify, you must become a member, which requires depositing $5 into a PenFed savings account.

But PenFed really stands out with its rates. Both its minimum and maximum rates are lower than SoFi’s range of APRs. So if you are able to qualify with PenFed, you may be able to secure a lower rate without needing to opt into an origination fee.

SoFi personal loans

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  • Same-day funding.
  • Flexible repayment terms.
  • Member benefits.
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  • Need good credit to qualify.
  • Higher minimum APR.
  • Higher minimum loan amount.

SoFi personal loans may be a good choice for borrowers with good credit — the minimum credit score requirement is 680. However, applicants with lower credit scores may qualify for a personal loan through one of SoFi’s partner lenders. It offers one of the highest loan amounts in the personal loan space and a wide range of repayment terms. Plus, it doesn’t require origination fees, though you can opt to pay an origination fee in exchange for a lower APR.

SoFi also offers member benefits, including access to rewards, discounts and member-only events. However, a potential downside is that the lender’s minimum loan amount is $5,000, which might be more than you need to borrow.

How to choose between PenFed and SoFi

PenFed and SoFi are solid options for borrowers seeking competitive rates and those who want to apply with a co-borrower. Since each lender offers a prequalification process, you can check your rate with both to see which will be the better choice for your needs.

PenFed is better for smaller loans and lower rates

If you need to pay for a small expense, Penfed is a better option than SoFi. Penfed’s minimum loan amount is $600, while SoFi’s is $5,000. You can use a small loan from PenFed to cover just about any expenses, such as a car repair or medical bill.

PenFed may also be the better option if you’re seeking a lower interest rate. It offers a slightly lower advertised minimum APR than SoFi and has a much lower maximum APR. That said, the rate you’re offered could be higher or lower, so it’s best to prequalify with both companies.

SoFi is better for larger loans with more flexible repayment terms

By comparison, SoFI’s maximum loan amount is double PenFed’s — $100,000. This makes SoFi a better option than PenFed if you want to take out a larger loan for nearly any purpose, including consolidating high-interest debt or home improvements.

SoFi also has more flexible repayment terms than PenFed — two to seven years versus three to five years. Choosing a loan with a longer term can lower your monthly payments, but keep in mind you’ll pay more interest over the life of the loan.

Compare lenders before applying

PenFed and SoFi are both solid loan options. However, SoFi is the better choice if you need to borrow more than $50,000. On the other hand, PenFed is a better choice if you want to take out a smaller loan. Since each lender allows you to prequalify without affecting your credit, it’s a good idea to compare rates before you submit a formal application.