PenFed Personal Loans: 2023 Review

PenFed offers flexible personal loans that fund quickly, and borrowers can pre-qualify.
By Annie Millerbernd 

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Our Take

5.0

NerdWallet rating 

The bottom line:

PenFed’s personal loans are best for good- to excellent-credit borrowers looking for a wide range of amounts and terms to choose from.

PenFed Credit Union Personal Loan
Est. APR
7.74-17.99%
Loan amount
$600-$50,000
Min. credit score
700
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Pros & Cons

Pros

  • Option to pre-qualify with a soft credit check.
  • Co-sign and joint loan options.
  • Can fund loans within one week.
  • Wide range of loan amounts.

Cons

  • No rate discount.
  • Reports payments to only one of the three major credit bureaus.
  • No direct payment to creditors with debt consolidation loans.

Compare to Other Lenders

Discover
SoFi
NerdWallet rating 
NerdWallet rating 
Est. APR

6.99-24.99%

Est. APR

7.99-23.43%

Loan term

3 to 7 years

Loan term

2 to 7 years

Loan amount

$2,500-$35,000

Loan amount

$5,000-$100,000

Min. credit score

660

Min. credit score

None

Compare estimated rates from multiple lenders

Compare Rates

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Full Review of PenFed Credit Union Personal Loan

PenFed offers personal loans that can be easily customized to fit most borrowers’ needs. Though PenFed is best known for serving military members, anyone can join by funding a savings account with a minimum of $5.

According to the lender, it’s currently accepting only good- and excellent-credit borrowers. However, you can pre-qualify without hurting your credit score to see if you get a loan offer. 

Table of Contents

PenFed personal loans at a glance

Minimum credit score

700.

APR

7.74% - 17.99%.

Fees

  • Late payment: $29.

  • Non-sufficient funds: $35.

Loan amount

$600 to $50,000.

Repayment terms

1 to 5 years.

Time to fund after approval

Borrowers can receive funds electronically within 48 hours after signing the loan documents.

Loan availability

Loans available in 50 states and Washington, D.C.

Personal Loan rates range from 7.74% to 17.99% APR.Rates and offers current as of October 2022 and are subject to change.* Your actual APR will be determined at the time of disbursement and will be based on your creditworthiness, which includes an evaluation of your credit history and the length of your PenFed membership. Not all applicants will qualify for the lowest rate. Rates quoted assume excellent borrower credit history. Other eligibility requirements may apply. All loans are subject to a minimum monthly payment of $50.Insured by NCUA. To receive any advertised product, you must become a member of PenFed. Equal Housing Lender.

Where PenFed personal loans stand out

Soft credit check to pre-qualify: Unlike other credit unions or even some major banks, PenFed lets you pre-qualify online to see your potential rates and loan amounts without affecting your credit score.

Wide range of loan amounts and repayment terms: PenFed loans start at $600 and go to $50,000, meaning borrowers can fund a wide range of expenses, from a small emergency repair to a major home improvement project. Paired with the lender’s terms of one to five years, loans can be easily customized to fit your needs.

Joint and co-signed loans: You can add a co-borrower or co-signer to your loan application to help improve your chances of qualifying or getting a lower rate. This person would share responsibility for repaying the loan.

Quick approval and funding time: PenFed can approve your application within one business day, and once you’ve signed the loan documents, send the funds electronically within 48 hours. If you prefer a check, you’ll have to wait longer — about five to seven days, according to the lender. 

Where PenFed personal loans fall short

Reports payments to only one major credit bureau: PenFed only reports payments to Experian, which is a rare drawback among lenders. This means if your credit report is pulled from TransUnion or Equifax, it won’t show your personal loan’s payment history. On-time payments typically help build your credit.

No direct payments to creditors: Unlike lenders that focus on debt consolidation, PenFed does not send payments directly to creditors when you consolidate debts with a loan. Instead, the funds are deposited into your checking account and you pay off other debts yourself.

No rate discount: PenFed doesn’t offer a rate discount to borrowers. This discount, which some lenders offer if you set up autopay, for example, usually ranges from 0.25 to 0.50 percentage points and is applied directly to the loan’s annual percentage rate, saving you money on interest.

How to qualify for a PenFed personal loan

Though you don’t need to be a PenFed member to apply for a personal loan, you’ll have to become a member before you’re funded, which should only take a few minutes. Other requirements include:

  • Minimum credit score: 700.

  • Must provide name, address, date of birth, Social Security number and employer information.

  • Must show at least two years of credit history, two accounts and no bankruptcies.

  • Average borrower annual income: $55,000.

  • Average borrower debt-to-income ratio: 40%.

Before you apply

  • Check your credit. You can get your free credit report on NerdWallet or at AnnualCreditReport.com. Doing so will help you spot and fix any errors before you apply.

  • Calculate your monthly payments. Use a personal loan calculator to determine what APR and repayment term you’d need to get a loan with affordable monthly payments.

  • Make a plan to repay the loan. Review your budget to see how the loan’s monthly payments impact your cash flow. If you have to cut other expenses in order to repay the loan, it’s better to know that before you borrow.

  • Gather your documents. PenFed may request proof of income, which can be a W-2 or paystub, as well as photo identification, like a driver’s license or passport. Having these documents handy can speed the application process.

How to apply for a PenFed personal loan

  1. Pre-qualify on PenFed’s website. You’ll be asked how much you want to borrow, what the funds are for and your desired repayment term, as well as some personal information. There’s no hard credit pull at this stage.

  2. Preview loan offers and accept the one that fits your budget. Once you accept a loan offer, you’ll submit a formal personal loan application. This step could require more documents, like W-2s, pay stubs and bank statements to confirm the information you gave during pre-qualification. PenFed will also do a hard credit check when you apply, so your credit score could temporarily dip.

  3. Make a plan to repay the loan. PenFed reports payments to Experian, so on-time payments will help build your credit, but missed payments will hurt it. Setting up automatic payments and keeping an eye on your budget are two ways to manage your loan payments.

Compare PenFed to other lenders

Personal loan lenders offer different rates, loan amounts and special features, so it pays to weigh other options. The best personal loan is usually the one with the lowest APR.

Discover and Achieve offer similar repayment terms, fast funding and pre-qualification with a soft credit check.

PenFed vs. Discover

Similar to PenFed, Discover personal loans are also available to borrowers with excellent credit (720 credit score or higher). Though Discover offers a smaller range of loan amounts, you’ll find other perks like direct payment to creditors with debt consolidation loans, quicker funding time and a 30-day money-back guarantee.

PenFed vs. Achieve

Achieve accepts borrowers with a minimum credit score of 600 and offers multiple rate discounts that can help you save money on interest. You can pre-qualify to see your potential rate, but you’ll likely pay an origination fee with this lender. 

How we rate PenFed personal loans

NerdWallet writers rate lenders against a rubric that changes each year based on how personal loan products evolve. Here’s what we prioritized this year:

Category

Star rating

Affordability

Transparency

Loan flexibility

Customer experience

Overall

Affordability

An affordable loan has low rates and fees compared with other similar loans and may offer rate discounts.

Transparency

A transparent lender makes information about the loan easy to find on its website, including rates, terms and loan amounts. Transparency also means allowing users to pre-qualify online to preview potential loan offers and reporting payment information to the major credit bureaus.

Loan flexibility

A flexible loan is one that lets users customize terms and payments. That means offering a wide range of repayment term options, allowing the borrower to change their payment date, offering loans in most states and funding it quickly.

Customer experience

A good customer experience can include a fully online application process, financial education on the lender’s website and a customer service team that’s available most of the time and can be reached in multiple ways.

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Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.