PenFed Credit Union Car Loans
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Pentagon Federal (PenFed) Credit Union offers auto loans with low-interest rates to credit union members. Loan options include refinanced auto loans, used-car and new-car loans, plus optional debt protection in case you lose your job or experience financial hardship. Of course, to get the lowest advertised interest rates, you’ll need excellent credit.
PenFed is a direct lender based in Louisville, Kentucky with 2.1 million members with fewer than 50 physical bank branches. Originally founded to serve members of the military, PenFed membership is now open to everyone.
PenFed Credit Union Financial Loan Types and Terms
| Loan types | Refinanced car loan, used car loan, or new car loan |
| Loan amount | $500-$100,000 (depending on term) |
| Repayment terms | 36-84 Months |
| APR | 0.99% |
| Minimum credit score | 500+ |
| Lender type | Direct lender |
| Good for | Low-interest auto loans |
PenFed Credit Union Pros
- APRs as low as 0.99% for new cars when you use PenFed’s TrueCar service
- Lowest rates for 36-month loans among competitors
- Loan amounts as low as $500
- Offers free credit score check
PenFed Credit Union Cons
- Must be a U.S. citizen or permanent U.S. resident to become a member
- Low-interest rates reserved for members with excellent credit
- Late payments may incur a 20% charge
Application Process
Before you apply for a car loan or auto loan refinance, you must become a member of PenFed Credit Union. If you aren’t a current or former member of the U.S. military or Uniformed Services and you aren’t related to someone who is, you can join the National Military Family Organization or Voices for America’s Troops for $17 to become eligible for a PenFed Credit Union Membership. You can also become a member if you are currently involved with any of these associations:
- American Red Cross
- American Society of Military Comptrollers
- Coast Guard Auxiliary Association
- Military Officer’s Association of America
- National War College Alumni Association
- Navy League of the United States
- Marine Corps League
- United States Department of Energy
- United States Army Warrant Officers Association
New members must open a PenFed savings account and deposit $5 before they can apply for an auto refinance loan or new/used car loan.
Members who’ve been with PenFed for more than 90 days can go through the pre-approval process to find out if they may qualify and what interest rate they’ll pay for an auto loan. With pre-approval, PenFed conducts only a soft-pull of your credit. If you like the terms they offer, you can move forward with the formal loan approval process, which involves a hard pull of your credit and may reduce your FICO credit scores by a few points.
You can apply for a PenFed auto loan on their website. Log in, choose the appropriate loan category, and click, “apply now.”
The application form asks for information about your desired loan amount, your income, and your identity. You’ll also submit photos of your government-issued ID if they don’t already have it on file. Your pre-approval terms aren’t guaranteed. If approved, you’ll get an estimate of your interest rate, fees, and loan terms. You’ll find out your actual loan terms and interest rate if you like the pre-approval terms and decide to authorize PenFed to check your credit and make a final decision.
Terms & Requirements
PenFed partners with TrueCar to help you find a good deal on a vehicle. You can search the TrueCar site by zip code and car model. You can also buy gap insurance and extended warranties through PenFed.
Car Loan Requirements
To get an auto loan with PenFed Credit Union, you must be a member. PenFed’s minimum credit score requirement is 500, but there are other factors that contribute to your approval, like steady employment, your ability to afford the loan payment, and the size of your other debts.
Car Loan Terms
PenFed offers new and used car loan interest rates start at 1.79% APR on 36-month loans. Loan amounts range from $500 to $100,000. You can also get your current loan refinanced with PenFed if they aren’t already the owners of the loan.
Repayment Terms
PenFed’s interest rates are low when compared to competitors. To get the lowest advertised rates, you’ll need to have excellent credit and agree to a repayment term of 36 months. The credit union allows loans on new cars that stretch to 84 months, but the lowest interest rate offered is 3.99% and the minimum amount they’ll lend for that term length is $20,000.
Refinanced auto loans have the same interest rates and repayment terms as loans for new or used cars.
Privacy & Security
PenFed Credit Union has a decent reputation as a lender. They have an A+ rating with the Better Business Bureau (BBB) and have closed 208 complaints from customers in the past 12 months. The credit union has 354 reviews on Trustpilot, with an average score of 4.6 out of five stars. Auto loan customers note that they received fast approval and conducted the entire process of getting their car loan online.
PenFed members concerned about the security of their private information can call (800)247-5626 to ask PenFed to limit sharing with affiliates about your creditworthiness.
Customer Support
PenFed customer service is available via phone, email, and chat 24/7.
Final Thoughts
While PenFed offers some of the lowest interest rates and flexible terms on new car, used car, and refinance loans, you must be a member for at least 90 days before you can use their pre-approval process to find out your potential terms. In general, you’ll need excellent credit and stable income to qualify for the lowest interest rates. Unless you have a great deal of confidence in your financial situation and have an established relationship with PenFed, you may be better off looking elsewhere for an auto loan. Plus, late payment fees are 20% of the missed payment, which is far more expensive than many competitors.
Current PenFed members with good credit are in the position to take advantage of the low interest rates offered by their credit union.
Address
Please write the company’s physical address in the US.
1101 Grade Ln
Louisville, KY 40213-2673