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PenFed Credit Union auto loans review

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Low-APR financing and refinancing for new and used cars.’s rating: 4.03 / 5.0


Credit unions often offer car loan rates lower than traditional banks — and PenFed membership isn’t as restrictive as others. It also offers financing for new and used cars, in addition to refinancing. But while its rates start low, most people can’t qualify for the starting APR.


Min. Loan Amount


Max. Loan Amount

Starting at 1.04%



Product NamePenFed Auto Loans
Min. Loan Amount$500
Max. Loan Amount$100,000
APRStarting at 1.04%
Interest Rate TypeFixed
RequirementsActive membership with PenFed

First, do I qualify?

To be eligible for an auto loan, you’ll need to have an active membership with PenFed. Though membership is limited, it’s not restricted to just military service members and their families. You may be eligible through:

  • Employment
  • Volunteering
  • Association membership
  • Living with an active or qualified member

Even if you don’t meet those eligibility requirements, PenFed lets you join at a cost of just $5.

Car loan eligibility

PenFed doesn’t give specific auto loan eligibility criteria. But in general you must be at least 18 years old and a permanent resident or citizen of the US. You also typically need at least good credit to get a competitive deal — usually above 670.

Eligible states

While PenFed car loans are available to residents of all 50 states, it only has store locations in Florida, Guam, Hawaii, Maryland, North Carolina, New York, Puerto Rico, Tennessee, Texas, Virginia and Washington, DC.

What makes PenFed auto loans unique?

This credit union offers some of the lowest rates out there for a car loan. It’s also available in all 50 states — most credit unions only serve a few states or even a few counties. Membership also isn’t as restrictive as some other credit unions, with an option to donate if you can’t meet the military requirement.

What types of car loans does PenFed Credit Union offer?

PenFed offers your standard used and used car loans, as well as car loan refinancing. Here’s how it breaks down:

Car loan typeStarting APRMax termLoan amount
New auto loan1.04%84 months$500 – $100,000
Used auto loan2.39%72 months$500 – $100,000
Refinance new car loan1.04%84 months$500 – $100,000
Refinance used car loan1.64%72 months$500 – $100,000

PenFed car loan programs

PenFed also offers auto loans through its car buying service and a payment saver loans.

  • Car buying service loans. With the car buying service, you buy and finance your car through PenFed and its partner dealership, in exchange for lower rates.
  • Payment saver loans. The payment saver loan allows you to get lower monthly payments throughout the life of the loan with a balloon payment at the end of your term.
Loan typeStarting APRMax termsAmounts
Car Buying new auto loan1.04%84 months$500 – $100,000
Car Buying used auto loan1.64%72 months$500 – $100,000
Payment Saver new auto loan2.99%60 months$10,000 – $100,000
Payment Saver used auto loan3.74%60 months$10,000 – $100,000

What are the benefits of PenFed Credit Union auto loans?

  • Low starting rates. A 1.04% starting APR is pretty hard to beat when it comes to low-interest car loans. An excellent credit profile, among other factors, is usually necessary to qualify for the lowest rates.
  • Car-buying service. You can stay in one place to find your car and your financing — and potentially get a lower rate for doing so.
  • Reduced payments. If you can’t afford the repayments on a typical loan, the Payment Saver loan could get you a deal that fits your budget.
  • Extended warranty available. Three extended warranty plans are available through PenFed, with pricing starting at $955. All three include a $0 deductible and 24-hour roadside assistance.
  • Potential hardship relief. When life spins out of control, even the smallest hand can soften the impact. PenFed allows customers having a hard time making their loan payments apply for financial hardship assistance with a simple form and a few supporting documents.

What to watch out for

  • Preapproval only for prior members. You must be a member for at least 90 days before you apply to qualify for preapproval on a car loan.
  • Higher minimums for longer terms. Longer terms come with minimums sometimes $9,500 longer than lower terms.
  • Balloon payments on Payment Saver loans. These loans may give you a break on payments upfront, but when the remaining amount is due, it can be a big one. Refinancing is not a guarantee either, so be careful and plan for the full cost of this loan.
  • Potential fees. Though it may feel like a long way off once you pay off your loan, you’ll still have at least a savings account with PenFed. Leaving that account alone may cause it to fall into an idle state and accumulate inactivity fees.
  • Almost exclusively online. Sometimes a brick-and-mortar location can be helpful, especially when it comes to complicated loans. PenFed only has a handful of locations, and none of them are in the Midwest or the West Coast.

How does PenFed auto loans stack up against the competition

PenFed Credit Union reviews and complaints

BBB accredited No
BBB rating A+
BBB customer reviews 1.3 out of 5 stars, based on 58 customer reviews
BBB customer complaints 207 customer complaints
Trustpilot Score 2.5 out of 5 stars, based on 11 customer reviews
App Store Score 4.1 out of 5 stars, based on 5,719 customer reviews
Google Play Score 4.5 out of 5 stars, based on 12,349 customer reviews
Customer reviews verified as of 16 October 2020

You won’t find much in terms of customer reviews on Trustpilot and the Better Business Bureau (BBB) for PenFed — and much of what is there is negative. Of the few reviews, only two mention car loans. But there’s a trend of customers complaining of misapplied payments on other products, which may carry over.

How do I apply?

Applications vary based on if you’re an existing customer or not. Members may log into their account and apply for an auto loan from the online portal.

Those who aren’t PenFed members should follow these steps:

  1. Go to the PenFed site.
  2. Hover over Auto in the main navigation and select the auto product you want.
  3. Click Apply now on the left-hand side, then Apply now again in the pop-up window.
  4. Fill out the requested information.

The application should only take around 10 minutes to complete if you have the information on hand. Decisions vary based on the type of loan, but may be available within just a few business days. You can contact customer service at any time at 800-247-5626.

What documents do I need to apply?

Different loans may require more information, but these are the basics that you’ll need:

  • Loan amount and term you’re requesting. This amount should include the total financing amount, including title, tags and any additional fees.
  • Your name, date of birth, email, phone number, home address and Social Security number.
  • Your employment and income information.

When applying with a coapplicant, you’ll also need their name, date of birth, email address, phone number and Social Security number if they’re your spouse. For nonspouse coapplicants, you’ll need to call PenFed to complete your application.

I got the PenFed Credit Union auto loan. Now what?

Once you’ve hit the open road with your new car, it’s time to maintain both your car and your loan. PenFed offers recurring and one-off online payments. To make a payment, simply go to the PenFed site and select Log In at the top of the page. You can then make a payment through the online portal.

Membership with PenFed also comes with tools, an advice center and exclusive discounts. Check out the auto, finance, home, personal and retail discounts available. Some of these include savings on your home and auto insurance with Travelers insurance, special offers when renting a car with National or Alamo, up to $20 off with TurboTax and more.

Bottom line

Auto loans from PenFed come with low starting rates. The Payment Saver loan offers a unique feature you may not find with other lenders, but carries a high final payment that might require selling, trading or refinancing your car. As exciting as it is to get into a new car, it’s also important to take your time and compare auto lenders to find one that can best support your needs.

Frequently asked questions

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