PenFed Auto Loans Review

You need to be a member for PenFed loans products — if you aren’t part of its membership base, you can’t sit with them. Membership is, however, open to everyone.

Fixed APR
Max. Loan
36–84 months
4.8 / 5.0
SimpleScore PenFed 4.8
New Car Rates 5
Loan Size 5
Used Car Rates 5
Customer Satisfaction N/A
Fees 4
  • Very competitive rates
  • Large loan amounts
  • Car-buying service available
  • Need to be member for at least 90 days
PenFed Disclosure

New Auto Loans: Loan rate applicable to new vehicles only. New vehicles are where you are the original owner and the untitled vehicle is a current (2020) or prior model year (2019). Up to 110% financing is available. Vehicle weight restrictions apply. Minimum loan amount is $15,000 for 61-72 month term. Rate also depends on term.

Used Auto Loans: Maximum used car loan advance will be determined by PenFed using a NADA value. Financing is available up to NADA average retail value plus tags, title, taxes and extended warranties not to exceed 110%. Some restrictions apply. Call 1-800-247-5626 for details.

Financing for 61-72 month term is valid for model years 2015 – 2020. Rate depends on term. Other restrictions including vehicle and mileage limitations may apply.

Refinance Auto Loans: New vehicles are where you are the original owner and the vehicle is a current (2020) and prior model year (2019). For used vehicles, maximum used car loan advance will be determined by PenFed using a NADA value. Up to 100% financing is available to qualified members. PenFed does not permit internal refinances of an existing PenFed auto loan.

There’s a lot to like about PedFed auto loans. Founded in 1935, PenFed Credit Union serves over 1.2 million members and manages $16 billion in assets today. Its auto loan rates are some of the most competitive on the market, and it has lending products to cover new purchases, used vehicles and refinancing. Offering some of the best personal loans and auto loans around, PenFed is definitely worth considering — if you’re eligible for membership.

In this article

    PenFed at a glance

    New Car APRStarting at 0.99%
    Eligibility RequirementsMust be a credit union member and hold at least $5 in an account
    Best ForGood to Excellent credit borrowers
    Not ForPeople who want in-person loan service
    Standout FeaturesCar-buying service
    Pre-approval options

    Source: PenFed

    What we like about it

    Low rates

    PenFed auto loans rates are some of the lowest on the market for both new purchases and refinancing. Loan options are extensive — borrow to buy a new or used vehicle, or refinance an existing auto loan. Terms range from 36 to 84 months, and you can take out anything from $500 to $100,000, up to 110% of the purchase price.

    Car-buying service available

    PenFed offers a car-buying service, meaning you can shop for your vehicle and arrange your financing in one place. Buying this way could even get you additional discounts and lower APRs.

    Check Your Auto Loan Rates

    View our top-rated lenders and find the best rates today. It’s quick and easy.

    Hardship assistance program

    PenFed’s hardship assistance program is useful In the current economic climate. What’s more, PenFed is light on fees with no application, origination or prepayment fee.

    PenFed’s hardship assistance program is useful In the current economic climate. What’s more, PenFed is light on fees with no application, origination or prepayment fee.

    Things to consider

    While the PenFed auto loan rates are low, you’ll need excellent credit to qualify for them. If your credit is less-than-perfect, take a look at our review of the best auto loans for bad credit.

    As PenFed doesn’t have a strong brick-and-mortar presence across the country, you’ll need to do most things online.

    PenFed auto loans rates and fees

    You can borrow as little as $500, or up to $100,000 depending on the product you choose. Longer terms come with higher borrowing minimums. For a new vehicle auto loan or refinancing, loan terms range from 36 to 84 months and APR can be as low as 0.99%. For a used vehicle auto loan or refinancing, loan terms range from 36 to 72 months, and APR starts at 2.24%.

    PenFed auto loan rates can be even lower if you purchase through its car buying service, with the APR starting at 0.99% for a new vehicle and 5.59% for a used vehicle. Using its car buying service could also land you special discounts and offers on specific brands.

    PenFed auto loans offer payment saver loans, too. These allow you to make lower monthly payments throughout your loan, but you’ll have to make a balloon payment at the end. Borrowing minimums start at $10,000 and go up to $100,000, with loan terms between 24 to 60 months.

    In terms of fees, PenFed charges up to $29 for late payments. Membership comes with a share/savings account which requires a $5 deposit.

    How to apply for a PenFed Credit Union auto loan

    You can apply for an auto loan online, through the mail or by fax. Here is the step-by-step application process if you’re applying online:

    1. Pick the type of loan you would like and click “Apply Now.”
    2. If you’re an existing PenFed member, log in. If you’re not a member, you can continue the application process then become a member after.
    3. You’ll need to fill out the online form with loan details such as the borrowing amount and preferred term. You’ll also have to provide information such as your name, date of birth, residence and contact details, as well as income and employment information.

    PenFed auto loans criteria and eligibility

    Remember, you have to be a member to be considered for PenFed auto loans. This includes applying for membership and funding an account with $5.

    Your actual APR depends on a number of factors, including your credit history or credit score. That means you won’t get the advertised auto loan rates unless you have excellent credit.

    For used vehicle auto loans, you can only get a loan term of 61 to 72 months for model years 2015 to 2020. Other restrictions including vehicle and mileage limitations may apply. Keep in mind, you can’t refinance an existing PenFed auto loan.

    PenFed auto loans vs. the competition


    SimpleScore: 4.75/5

    USAA is another lender catering to military personnel and there are great things about its auto loans — expect no application or prepayment fees, an easy application through your mobile phone and loan offers that are good for 45 days.

    However, PenFed ratings would be higher in our minds because it offers lower APRs and has less restrictions. For example, USAA APRs for new auto loans start from 2.89% but you’ll have to enroll in automatic payments and purchase through its car buying service for 2019 models or newer. USAA APRs are just as competitive as PenFed for used car loans and can be as low as 3.29%, but again, you’ll need to purchase through its car buying service for those rates.

    Bank of America

    SimpleScore: 4.4/5

    If you don’t want to join a credit union to access decent rates, then Bank of America is a good alternative. With 2.59% APR for new auto loans and 2.89% APR for used auto loans, Bank of America rates are relatively competitive. What’s more, if you already have an account with Bank of America and are enrolled in its Preferred Rewards program, you can get an interest rate discount of 0.25% to 0.50% depending on your membership status.

    Most applications are decided within 60 seconds. Apart from new and used auto loans, you can refinance, buy from a private dealer, buy out your lease and finance specialized vehicles like accessible or small business vehicles.

    Check Your Auto Loan Rates

    View our top-rated lenders and find the best rates today. It’s quick and easy.

    PenFed in the news

    • In October 2020, Credit Union Times announced PenFed Credit Union’s acquisition of Sperry Associates Federal Credit Union in Long Island, New York. This acquisition comes soon after Sperry Associate’s CEO had written about the viability of medium-sized credit unions. 
    • PenFed president and CEO, James Schenck wrote an article for Forbes in October 2020, advising business owners and business leaders to stay the course throughout the pandemic, despite economic uncertainty.
    • Credit Union Times also reported PenFed Credit Union’s two-millionth customer celebration in May, 2020. This celebration was accompanied by the credit union donating $2 million to local charities and veterans.

    We welcome your feedback on this article and would love to hear about your experience with the auto loans we recommend. Contact us at with comments or questions.



    We’ve created the SimpleScore™ to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore™

    We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.

    Why do some brands have different SimpleScores™ on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores™ because they offer more than one financial solution — like auto loans, home loans, personal loans and banking.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore™ to each financial solution, we’re able to give you a more accurate view of their services and how they compare to competitors’ services.

    Minimum new car rate

    Companies that look out for new car buyers with lower rates receive higher scores from us.

    Minimum used car rate

    We also give higher ratings to companies that look out for used car buyers by offering lower rates.

    Maximum loan size

    Having enough money to cover your auto loan is important –– that’s why companies with higher maximum loan amount receive better scores from us.

    Customer satisfaction

    We use the J.D. Power 2019 Consumer Lending Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)


    Fees can add up very fast –– that’s why we give a higher score to companies who have fewer fees.

    Kristie Kwok

    Contributing Writer

    Kristie Kwok is a finance content writer with in-depth knowledge of the banking industry from her previous work experience in banks such as UBS, Lloyds Banking Group and Royal Bank of Scotland. She is a qualified accountant with a Bachelor of Commerce degree, specializing in Accounting and Finance.

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to,, and elsewhere.