Could you be eligible for a low APR car loan from this well-known credit union?A new car can mean a new adventure, less hassle and — unfortunately — a loan. Whether you’re still looking, or you’ve found the right car, making sure you find the right loan is vital. Credit unions often offer rates lower than traditional banks, and PenFed membership isn’t as restrictive as others. We’ll take you through everything from offerings to applying — and all the gritty details in between.
|Product Name||PenFed Auto Loans|
|Min. Loan Amount||$500|
|Max. Loan Amount||$100,000|
|APR||1.99% (Starting at)|
|Interest Rate Type||Fixed|
|Requirements||Active membership with PenFed|
- Active 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 servicemembers and their families. You may be eligible through:
- Association membership.
- Living with an active or qualified member.
Even if you don’t meet those eligibility requirements, PenFed lets you join either Voices for America’s Troops or the National Military Family Association during the membership application process. Joining either charity costs $17 — nonrefundable cost even if your PenFed membership application is denied.
Specific auto loan eligibility criteria aren’t given, but in general you must be at least 18 years old and a permanent resident or citizen of the US.
What types of car loans does PenFed Credit Union offer?
- New auto loans. Current model years may pull rates as low as 2.49% APR and terms up to 84 months for qualified borrowers. Loan amounts range from as little as $500 to as much as $100,000.
- Used auto loans. Slightly older or previously titled cars have terms that only go up to 72 months and rates take a jump to 3.49% APR. The amount range stays the same at $500 to $100,000.
- Refinancing for new and used cars. You’ll find the rates, terms and loan amounts to be the same as PenFed’s other new and used auto loans. Financing is available up to 100%, and the borrower must be the original owner for new cars.
- Payment Saver new and used auto loans. A unique option that allows buyers to pay a higher rate upfront, but incur lower monthly payments. You’ll find APRs starting at 2.99% for new cars and 3.74% for used cars. Terms are available up to 60 months, and loan amounts range from $10,000 to $100,000. At the end of the term, the remaining balance of the loan are due.
- Car Buying new and used auto loans. Buy your car using PenFed’s partner, TrueCar, with APRs from 1.99% (Starting at) for new cars and 2.49% for used. Terms only reach 36 months with this program.
- Leisure vehicle loans. You’ll find motorcycle, boat and RV loans under Adventure Loans on the PenFed website. A new boat or RV loan fetches a starting APR of 6.15% with terms up to 10 years. New motorcycle loans have a higher starting APR of 6.49% and terms that only reach 60 months.
What are the benefits of PenFed Credit Union auto loans?
- Low starting rates. A 1.99% (Starting at) 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.
- 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
- High cost of 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. So you’re likely to experience PenFed’s car loan process completely online. You may need to look elsewhere if in-person service is a must.
Compare more car loan providers
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:
- Go to the PenFed site.
- Hover over Auto in the main navigation and select the auto product you want.
- Click Apply Now on the left-hand side, then Apply Now again in the pop-up window.
- 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.
How to apply step-by-step with screenshots
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.
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
Image source: penfed.org