PenFed Auto Purchase and Refinance
  • Multiple Pre-Qualified Offers: PenFed offers up to six pre-qualified loan options, each specifying the interest rate and payment amount for various loan terms. These pre-qualified offers are determined through a soft credit check.
  • Rate and Offer Consistency: The pre-qualified loan terms provided by PenFed remain consistent throughout the preapproval and approval stages, unless there are changes to the selected vehicle.
  • Online Car Buying Service: PenFed provides an online car buying service that streamlines the process of finding, financing, and purchasing a vehicle. This service may also offer potential rate reductions or cash bonuses.
  • Convenient Online Application: Borrowers can complete the entire loan application process online, from submission to document upload.
  • Seven-Day Customer Service: PenFed offers customer service assistance seven days a week, providing support when needed.
  • Credit Union Membership Required: To obtain a PenFed auto loan, individuals must be members of the credit union. Although membership is accessible, it is still a prerequisite.
  • No Automatic Payment Rate Discounts: PenFed does not offer rate discounts for borrowers who set up automatic payments, which some other lenders provide as an incentive for automatic payment scheduling.
  • Initial Application Requires Social Security Number: Applicants are required to provide their Social Security number as part of the initial application process, which may be considered sensitive information by some individuals.
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PenFed loans review

PenFed, or Pentagon Federal Credit Union, provides auto loans for both new and used car purchases, along with options for refinancing. Membership with the credit union is a prerequisite, and individuals can become members after obtaining auto loan approval as part of the application process. Typically, members are expected to open a primary savings account with a $5 deposit, but PenFed covers this $5 requirement for auto loan applicants.

Applying for an auto loan through PenFed can be done online, via phone, or at a PenFed branch, although the branch network is somewhat limited. Applicants receive up to six pre-qualified loan offers, each detailing the rate and payment amounts for various terms. Notably, pre-qualification relies on a soft credit check, which has no impact on the applicant's credit score. A hard credit inquiry occurs only if the applicant proceeds with a specific loan offer. According to PenFed, the information collected during the initial application typically expedites the final approval process, often without requiring additional documentation.

In contrast to many other financial institutions, PenFed's rate discounts or cash bonuses are not contingent on setting up automatic payments. Instead, these benefits may be available when purchasing a vehicle through PenFed's online car buying service. The credit union provides "as low as" rates, which are typically reserved for borrowers with excellent credit, on its website.

PenFed's car buying service enables applicants to find a car online, request member pricing from a dealer, apply for financing online, receive approval, and then visit the dealership. A unique feature of this service is the reimbursement of car insurance deductibles, up to $500 twice a year, in the event of a filed claim. It's important to note that using the car buying service may result in multiple inquiries from participating dealers.

PenFed may be a suitable choice for individuals who:

  1. Plan to use PenFed's auto buying service to find, finance, and purchase a vehicle, streamlining the process.
  2. Prefer to compare loan terms, as PenFed offers up to six pre-qualified offers with rate and payment details for various terms.
  3. Seek the benefits of credit union membership, as securing an auto loan through PenFed entails opening a savings account, providing access to additional credit union services. Borrowers can conveniently manage their loan and other accounts through online banking and a mobile app.

PenFed Auto Loans at a glance:

  1. Origination Fee: None.
  2. Required Personal Information: Social Security number or ITIN, address, phone, email, birthdate, employment status, employer name, housing payment amount.
  3. Pre-qualification Available: Yes. Offers up to six pre-qualified options, detailing payment amounts for various terms, based on a soft credit check. These offers remain valid for 30 days.
  4. Application Methods: By phone, in-branch, or fully online, including document submission.
  5. Approval Speed: Within 10 minutes with automated decisioning; 24-48 hours may be required for manual decisions.
  6. Funding: One day or less after loan closing.


  1. Minimum FICO Credit Score: Not disclosed.
  2. Minimum Credit History: None specified.
  3. Minimum Annual Gross Income: Not specified.
  4. Maximum Debt-to-Income Ratio: Relies on PTI (Payment to Income) ratio for approvals but does not disclose the exact ratio.
  5. Bankruptcy Restrictions: Applicants with a bankruptcy within the past two years will not qualify.
  6. Geographic Coverage: Available in all 50 states.
  7. Membership: Military service is not a requirement. PenFed operates under an open charter, meaning anyone with a valid Social Security number or ITIN can become a member.