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PenFed Credit Union: Auto Loan Benefits and Review

PenFed Credit Union: Auto Loan Benefits and Review

PenFed has gone the extra mile offering a 0.45% competitive APY (annual percentage yield), with the ability to withdraw cash at an extensive number of ATMs. With that said, PenFed is our auto loan service for this article, and we’ll walk you through its prequalification process, requirements, and all other issues that help a borrower make a smart financial decision.


Bonus cash offers on select car models
GAP Insurance & ADR
Low APR rates
Approval within 48 hours
Competitive APR (annual percentage rate) as low as 2.09%
Great deals with huge discounts when purchasing a car through its auto-buying service
Offers for credit union members
Auto loans can go up to 110% of the vehicle value
Simple and straightforward online application


Membership required to get a loan
Social Security number required with initial application
Best rates are available only for excellent credit scores
You need to open a saving account before you can get a loan


Quick Stats

Average Approval Time
24 hours
Maximum Loan Amount
Maximum Loan Term
84 Months
Minimum Credit Score
Minimum Starting APR (Annual Percentage Rate)
Pre-Qualification Valid For
60-90 days

You can benefit from PenFed's competitive rates by having an excellent credit score, over 800, and whether you are a PenFed member or not, you can make use of its financing products.


Who Is Eligible to Join PenFed?

PenFed used to offer its products exclusively to former and current governmental or military personnel, along with their family members. Fortunately, things have changed, and now everyone can join PenFed, become a member to take advantage of the discounts, and use its financial solutions.

All you need is to have a savings account with the minimum deposit amount. But if you are a military service member or have someone in your family who is serving or served in the military, you’ll get better offers and interest rates.


Get APR as low as 0.99%


Filters and Features

PenFed has multiple and flexible auto financing options whether, for new or used autos, it also have refinancing option with different interest rates depending on the loan amount. Before going any further, let’s tell you what benefits you will get when financing with PenFed:

  • APRs are as low as 2.09% for short-term loans and members.
  • Auto loans can get up to 110% of the car value, allowing borrowers to cover all other expenses if there are any.
  • Simple and easy online application.
  • Long loan terms are available.
  • Discounts when purchasing through PenFed car buying service (TrueCar).

You can choose from 41 different car make and multiple models. Then, you can get PenFed to calculate the monthly payment, interest rate, and total loan value for you. All calculations are made depending on your purchase price, down payment, annual income, and other factors.



Before you even get prequalified, you can check all the makes and models on the PenFed official website or mobile application. You can start with choosing the car make. As we said earlier, you can choose from a vast selection of makes; then, you'll get all the available models.


Compared to other websites, PenFed might not allow customizing the results as you want; it doesn't have filters for color, features, other specifications. Still, for both new and used cars, you'll get a decent number of options that guarantee that you find the right vehicle for you.

Become a member to get a discount!


Financing and Prequalification

Interest rate and the overall loan value also depend on what car make and model you choose and whether it's a new or a used vehicle. To help you make up your mind, here are calculations to estimate your costs.

In a nutshell, here's how financing your car with PenFed works:
Step 1: Search for a new or used car.
Step 2: Fill the contact form and open your savings/share account with a $5 deposit.
Step 3: When you have selected your vehicle already, apply online and allow PenFed time to review your application.
Step 4: Visit your dealer, give your car a test drive, and if you like it, complete the purchase.


New autos cost estimation

Minimum APR Loan Term Loan Amount Approximate Payment
2.89% 36 months $500 - $150,000 $581.87
3.09% 48 months $7.500 - $150,000 $444.48
3.14% 60 months $10,000 - $150,000 $361.44
3.49% 72 months $15,000 - $150,000 $309.06
4.59% 84 months $20,000 - $150,000 $279.78


Used autos cost estimation

Minimum APR Loan Term Loan Amount Approximate Payment
3.69% 36 months $500 - $150,000 $589.29
3.99% 48 months $7.500 - $150,000 $452.80
3.99% 60 months $10,000 - $150,000 $356.15
4.19% 72 months $15,000 - $150,000 $315.60


New refinance cost estimation

Minimum APR Loan Term Loan Amount Approximate Payment
2.89% 36 months $500 - $150,000 $581.87
3.09% 48 months $7.500 - $150,000 $444.48
3.14% 60 months $10,000 - $150,000 $361.44
3.49% 72 months $15,000 - $150,000 $309.06
4.59% 84 months $20,000 - $150,000 $279.78


Choosing the shorter terms is always recommended since you can benefit from the low APRs and various vehicle options. Longer terms can also limit your options in terms of the model year. As for PenFed, rates are available on all model years up to 60 months.

However, the 72-month term is available on 2016 model years and newer, which might not be a good option for those who want to buy older cars.

You won't be waiting for more than minutes until you get prequalified by filling a very simple and short form providing your basic information, residence info, and income info. However, after you fill the qualification form, you'll need to apply for a membership that won't take much effort or time either to get done.

Setting up your PenFed membership requires also opening a savings/share account with a $5 minimum bank balance in your account.

When you click on the "Get Started" option, the website will ask you to login with your username and password, but you don't have to go through this step if you're not a member yet, in that case, click on "not a member yet,"

Right after that, you'll have this page to start your prequalification form.



What's next? After you fill the loan amount and term, you'll need to provide some basic information, such as:

  • First, middle, and last name
  • Date of birth
  • Phone number
  • Email address


In the following steps, you'll be asked to share a bit more information about your residence and annual/monthly income. Besides the employment status to get you the most accurate rates and approximate monthly payment.


Any available discounts?

Yes, but you must be a PenFed active member for 60 days or more to get a discount from selected manufacturers, including Audi, Jeep, PMW, Mercedes, Dodge, Volvo, Ram, Chrysler, Alfa Romeo, Mini, and Fiat. So, for instance, if you want to buy a jeep for $32.545 and you're a member already, you can make use of the average savings of ($4.040), and the OEM bonus cash ($1,000), dropping the car value to ($27,535).


Online purchase doesn't mean you can't get a test drive, most dealers allow a delivery option for your vehicle, and when it is delivered to the location, you choose to check it physically or drive it to check everything is okay before you finalize your purchase.


Discounts are available on selected manufacturers!


Warranty and Protection

PenFed has a lot of options when it comes to your vehicle's protection and safety. Before you finalize your purchase, a test drive can make you more confident with your decision. However, you might not get a money-back guarantee or a refund with PenFed, but you can make use of PenFed's extended warranty, GAP warranty, or debt protection.


Extended warranty

Most car manufacturers offer a limited warranty, which is a good option that will let you rest assured for a short time. Still, once your limited warranty expires, nothing will guarantee your car's safety. PenFed offers more lasting protection with its extended warranty.

Compare the three extended warranty solutions offered by PenFed:

  Easy Street Protection for Newer Cars Easy Street Protection Main Street Protection
 Model year For current year plus 2 model years older For vehicles 8 model years old or newer For vehicles 8 model years old or newer
Mileage Vehicles with 0-15,000 miles on the odometer Vehicles with 75,000 miles or less on the odometer Vehicles with 75,001 - 125,000 miles on the odometer
Coverage 6 years or until the odometer reaches 100,000 miles; whichever comes first 5 years or until the odometer reaches 100,000 miles; whichever comes first 36 months or 36,000 miles from the time of purchase; whichever is first
Price $995

Standard Vehicles: $1,495

Premium and Hybrid Vehicles: $2,995

Standard Vehicles: $1,495

Premium and Hybrid Vehicles: $2,995


GAP warranty

As the name indicates, the GAP warranty covers the difference (GAP amount) between the actual car value and the loan balance. For example, if the car's actual value is $10,500 and the loan balance is $15,000, then the GAP warranty will get you $4,500 back, which is the $15,000 minus the $10,500 actual car value. GAP warranty is offered for $499 and is available for both new and used cars, with a maximum eligible loan amount of $100,000 and 84 month maximum loan term.


Debt protection

In case you can't make timely payments for any reason, like disability, becoming unemployed, or death, this option can give the borrower or his family time to recover financially. Depending on the plan, you can cancel 6 and up to 12 payments. 


Customer Support

PenFed supports its clients in the following ways:

  • Phone calls
  • Email
  • Articles and guides


Get prequalified in minutes!

Final Verdict

In a nutshell, do we recommend PenFed? PenFed's APRs are relatively low compared to other lenders; it also allows you to apply online in a few minutes. Getting approved takes 48 hours maximum, which means you don't have to wait for too long, but you still have the time to weigh your options and make up your mind on whether or not you want to finance with PenFed. So, overall, we recommend it.

What credit score allows me to qualify for an auto loan from PenFed?
How long does PenFed pre-approval take?
Which credit report will PenFed use?
Does PenFed Credit Union operate nationwide?
Do I need to become a union member to get a loan?
What other loans does PenFed offer?
Does PenFed have a money-back guarantee?
What guarantees does PenFed offer?
How long does it take to get approved by PenFed?
How long does the prequalification last?
Does PenFed offer an online application?
Who is eligible to join PenFed?
Does PenFed require a minimum credit score?
What information I need to provide when apply for a prequalification?
What is the maximum loan amount I can get with PenFed?
What is the maximum auto loan term?