PenFed personal loan review: Low rates for good credit

Two smiling women outside, looking up penfed personal loans on digital tabletImage: Two smiling women outside, looking up penfed personal loans on digital tablet

In a Nutshell

PenFed Credit Union offers personal loans at competitive rates to people with strong credit. You don’t need to be a member to apply, but you’ll have to join the credit union in order to receive a personal loan.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.


  • Ability to prequalify and check your rate
  • Competitive rates for people with strong credit
  • No application or origination fees


  • Only starting rate is disclosed
  • Must become a credit union member to receive funding

What you need to know about a PenFed personal loan

Founded in 1935, Pentagon Federal Credit Union is the second largest credit union in the country. PenFed provides financial services to two million members across the United States, as well as Guam, Puerto Rico and Okinawa. In addition to personal loans, PenFed offers its members checking and savings accounts, IRAs, credit cards and auto loans, along with mortgages and home equity loans.

PenFed’s personal loans can be used for a variety of purposes, including debt consolidation, home improvement projects, vehicle repair expenses, or medical and dental costs. You can even use the loans for other big purchases like paying for a wedding. Its loans are unsecured and available in amounts from $600 to $35,000. Terms range from 12 months to 60 months.

Competitive interest rates for people with strong credit

People with strong credit may be able to qualify for a lower annual percentage rate, which PenFed offers to people with “excellent borrower credit history.” But PenFed isn’t transparent about its full APR range — it only discloses the lowest rate it offers. That makes it difficult to gauge how truly competitive its rates are if your credit isn’t in strong shape. You’ll have to apply for prequalification first to find out your potential rate.

Must be a member to receive a personal loan

If you’re not already a member of PenFed Credit Union, you can still apply for a personal loan. But if you’re approved and want to move forward with the loan, you’ll have to become a member.

Membership is open to everyone, and it only takes a few minutes to join. You can sign up as part of your loan application process, join through an association employment or military affiliation, or apply online. To join, you’ll have to open a savings account with a minimum deposit of $5. Members have access to a range of discounts, including savings on tax preparation costs, home insurance and car rentals.

Prequalify without hurting your credit

When you start your application online using the “Check Your Rate” feature, you can see your loan options without affecting your credit score. But keep in mind that once you do decide to apply, you’ll be asked to authorize a hard credit inquiry — and your approval, along with the terms you were preapproved for, isn’t guaranteed.

A closer look at a PenFed personal loan

Comparing lenders is a good idea when you’re shopping around for the best personal loan to fit your financial situation. Here are a few more details you should consider when deciding if a PenFed personal loan is right for you.

  • You can apply with a co-borrower — If your credit isn’t great, you may want to consider applying with a co-borrower to help secure approval — and a lower interest rate.
  • Potential to get your loan quickly — Once approved, you can stop by a local PenFed branch to pick up your check or have the money sent overnight — but you’ll pay a fee to have it expedited.
  • Late payment fees may apply — You may be charged a $30 fee for a returned payment and a $29 late fee if you’re behind on a payment.
  • No start-up fees or prepayment penalties — It doesn’t cost anything to apply for a PenFed personal loan, and there no origination fees. And if you decide to pay off your loan early, you won’t be hit with a penalty.

Who is a PenFed loan good for?

A PenFed personal loan may be a good fit for people with strong credit who are looking to borrow money to help pay for debt consolidation, home improvements, medical costs or other expenses up to $35,000. With starting loan amounts at just $600, it’s a particularly good option for people who only need a little bit of money and want to avoid high-interest options like payday loans.

If you don’t have great credit, you can consider applying for a PenFed personal loan with a co-borrower. Just keep in mind that if you decide to apply with a co-borrower, you’ll both be on the hook for the life of the loan.

How to apply with PenFed

You can start a personal loan application online using PenFed’s “Check Your Rate” tool. If you prequalify, you’ll have the option to select from a few offers. To apply you’ll need to provide some basic personal information, including your name, address, annual income, Social Security number and housing payment information. You’ll also have to specify the reason for the loan, the terms you want and how much money you’re looking to borrow.

Not sure if PenFed is right for you? Consider these alternatives.

  • OneMain Financial: If you have less-than-perfect credit, a personal loan from OneMain Financial might be worth exploring.
  • LightStream: A personal loan from LightStream is a good option to consider if you have strong credit.

About the author: Jackie Lam is an L.A.-based money writer who is passionate about helping creatives with their finances and cultivating community among entrepreneurs. Her clients include Fortune 500 companies and FinTech startups, and… Read more.