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PenFed vs. SoFi: Which offers better personal loans?

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Published on June 24, 2024 | 3 min read

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Key takeaways

  • PenFed has some of the lowest rates on the market, and they offer small loan amounts.
  • SoFi offers flexible loan terms and large loan amounts with no membership requirement.
  • You may get quicker funding with SoFi, but you can prequalify with both lenders to see which works best for you.

PenFed and SoFi are two highly ranked lenders that offer personal loans with competitive rates. The major difference between the two is cost and speed. You may be funded more quickly with SoFi, but PenFed has a significantly lower maximum APR.

Since you can prequalify with either lender, compare the rates from both to see which one is better for your finances.

PenFed Credit Union vs. SoFi at a glance

PenFed and SoFi each offer competitive starting rates. But some key differences — such as loan amounts, maximum advertised rates and repayment terms — may be more important for your borrowing experience.

 

PenFed

SoFi

Bankrate Score

4.7

4.7

Better for

Low APR range, small loan amounts Large loan amounts, long repayment terms

Loan amounts

$600–$50,000

$5,000–$100,000

APRs

8.99%-17.99%

8.99%-29.49% (with autopay)

Loan term lengths

12–60 months

24–84 months

Fees

$29 late payment fee

Optional origination fee of up to 7%

Minimum credit score

700

300 (with a co-applicant)

Time to funding

1-2 business days

As fast as the same business day

PenFed personal loans

PenFed Credit Union logo
Best for a low maximum APR

Rating: 4.7 stars out of 5
4.7
Learn more in our Bankrate review
  • Green circle with a checkmark inside

    Pros

    • Competitive APR range
    • No origination fee
    • Financial hardship assistance available
    Red circle with an X inside

    Cons

    • Membership required
    • Less flexible loan terms
    • Longer funding timeframe

SoFi personal loans

SoFi Automated Investing
Best for long repayment terms and borrower perks

Rating: 4.7 stars out of 5
4.7
Learn more in our Bankrate review
  • Green circle with a checkmark inside

    Pros

    • Same-day funding possible
    • Flexible repayment terms
    • Unique member perks
    Red circle with an X inside

    Cons

    • Optional origination fee
    • Less competitive interest rates
    • High minimum loan amount

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.

APR range

PenFed is the clear winner when it comes to APR. Like all federal credit unions, PenFed caps its rates at 18 percent. SoFi’s rates start higher and go up to 29.49 percent — and if you don’t opt for autopay or accept the optional origination fee, that APR could be higher.

Minimum credit score

SoFi is more accessible since it doesn’t set a minimum credit score, as long as you apply with a co-applicant. PenFed, on the other hand, requires a good credit score: a minimum of 700. Both require good credit to qualify individually. However, SoFi seems more flexible with credit scores, so it’s worth applying if your credit score is lower. To get the lowest rates with either lender, you will likely need excellent credit.

Repayment terms

SoFi wins again for its flexibility — your loan term can be as long as 84 months, but this isn’t necessarily a positive. A longer loan term means lower monthly payments, but you’ll pay more in interest over the life of the loan.

Still, you aren’t obligated to take out a loan for 84 months. You can always opt for a shorter term, and SoFi’s flexible loan terms make it easier to find an option that fits your budget. If you’re seeking a short-term loan, PenFed offers repayment options as short as 12 months, versus SoFi’s 24-month minimum.

Time to receive funds

Both lenders offer fast underwriting, making them suitable options for emergency loans. SoFi can fund some loans on the same day you apply, provided you finalize your application before 7 p.m. ET on a business day. PenFed is slightly slower, with a turnaround of one to two business days.

For most people, this likely won’t be a significant difference. Just because SoFi can fund more quickly doesn’t mean it will. Plus, your bank will still need time to process the deposit.

Fees

PenFed doesn’t charge origination fees to finance your loan. However, you may need to pay late or returned payment fees if you miss a payment.

SoFi has an optional origination fee of up to 7 percent in exchange for a lower interest rate. But it’s unclear exactly how much lower your rate might be, and it’s worth remembering that SoFi’s lowest rate of 8.99 percent is only possible with an origination fee attached. Still, this lender may be worth considering, especially since SoFi doesn’t charge other fees, including late fees.

Bottom line: Which lender is better?

PenFed and SoFi are both solid, industry-leading options. SoFi offers larger, more flexible loan terms, while PenFed is a better choice if you want to take out a smaller loan at more competitive rates.

Compare lenders before applying

Because you can prequalify without affecting your credit, it’s a good idea to compare personal rates with these lenders and others before you submit a formal application.