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2022 review

PenFed offers a wide range of products, including home, personal, and auto loans. Its Power Buyer and First Time Homebuyer programs make mortgages easier and more affordable, with available credit toward your closing costs.

8.5 / 10
Editorial Score
Ginny Dorn
Personal finance and mortgages specialist
April 17, 2022


PenFed is a credit union with banking services as well as home, personal, student, and auto loans. This reputable lender has decades in business, millions of members, and billions in assets. Its most notable product is its mortgages, and you can easily check your rates on the website.

The First-Time Homebuyer program could help you get a home for just 3% down with no minimum income if you are a mid-income earner. However, it’s important to note that higher-income earners cannot access this program.

PenFed also offers the Power Buyer program, which is particularly helpful in a competitive housing market because it locks in your rates for 90 days while helping you compete against cash buyers with an up-front approval letter.

This lender’s personal loans and student loan refinances also offer potential interest rate savings. Both have lower starting APRs than comparable lenders by several percentage points. Plus, it’s easier to get a personal loan with PenFed’s lower credit requirements.

8.5 / 10
Editorial Score
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Editorial Score
8.5 / 10
Online Services
Applications, Quote management, etc.
10 / 10
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8.0 / 10
Available in all states
10 / 10
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8.0 / 10
10 / 10

Check Your Rates with PenFed

Products & Services

PenFed has a wide array of loan products, including mortgages, personal loans, lines of credit, auto loans, and student loan refinancing.

Although PenFed advertises student loans, the loans are actually through Ascent.


PenFed offers a wide range of mortgages, including conventional, adjustable-rate mortgage (ARM), jumbo, VA, home equity line of credit, and refinance loans. You can check your rates with no obligation, but to get any loan with PenFed, you must become a member and open a savings account.

It’s free to join, and PenFed rewards you for getting a mortgage with a lender credit that applies to your closing costs. Very few lenders offer similar credits.

Lender credits depend on your loan amount:

  • Loan amounts up to $199,999 earn a $500 credit
  • Loan amounts of $200,000 to $699,999 earn a $1,000 credit
  • Loan amounts of $700,000 or more earn a $2,500 credit

PenFed also has a unique Power Buyer program. It provides you with a 60-day pre-approval that shows sellers that you can purchase immediately, which helps you compete with cash offers.

It also locks in your interest rate for 90 days. If rates go down during this time period, PenFed allows you to lock in the new lower rate. It’s worth noting that some but not all lenders provide similar rate-lock programs, but not all do.

This lender also offers a First Time Homebuyer Advantage program which requires a 3% down payment, which is even lower than government first-time homebuyer programs. PenFed won’t charge you any origination fees if you get this type of mortgage. It also gives you a $500 reward when you hit your 60th on-time mortgage payment.

The purpose of this program is to ensure that low-to-mid income earners are able to purchase a home. So, although it doesn’t have an income minimum, it does have a maximum of 80% of the median income in an area.

PenFed’s fixed-rate conventional loans go up to $548,250 while jumbo loans go up to $1.5 million. You’ll need a minimum credit score of 650 for conventional loans and 700 for jumbo loans. Meanwhile, ARM loans require a credit score of at least 620. In general, most lenders require at least a 620 for conventional loans, so PenFed’s credit expectations are in line with the industry average.

With all of these types of loans, you’ll need 1 to 2 months of paystubs and at least 1 year of W-2s. However, jumbo loans will require that you have at least 2 years of employment history and 6 months of reserves, or savings, to pay for the mortgage.

Check Your Rates with PenFed

Home Equity Line of Credit (HELOC)

PenFed’s HELOCs allow you to use the equity you have in your home to fund other major expenses. You can borrow $25,000 to $1 million. This lender has an introductory APR of 0.99% for your first six billing cycles. Fixed rates start at 3.75% and variable rates include a prime rate of 3.25% plus a margin that fluctuates with the market.

HELOCs have 10-year draw periods and 20-year repayment periods. During the draw period, you’ll only pay interest. It also allows you to switch from fixed interest rates to variable on some or all of your interest payments, which is an uncommon feature. To qualify for a PenFed HELOC, you’ll need a credit score of at least 660.

Most lenders’ introductory rates are higher, although their interest rates are on par with PenFed. However, some other lenders do accept lower credit scores. If you have a great credit score, PenFed could offer significant interest savings in those first 6 months

Student Loan Refinancing

You can refinance student loans and parent loans with PenFed. You can also refinance with your spouse and use combined income. This means you could get a better interest rate than you would if you refinance on your own.

PenFed offers fixed interest rates ranging from 2.89% to 4.98%. It determines interest rates based on your level of degree and application terms. You can also add a cosigner to get better rates. Terms are 5, 8, 12, or 15 years and you’ll need a minimum credit score of 670 to qualify.

It’s worth noting that other lenders offer variable interest rates while PenFed does not. Variable interest rates often offer a lower starting rate, but it can increase with the market. Other lenders’ fixed rates also have a higher maximum than PenFed’s, up to 7.75%.

Check Your Rates with PenFed

Personal Loans

PenFed’s personal loans go up to $50,000 and start at 4.99% APR. You can get terms up to 60 months. Other lenders offer personal loans up to $100,000, so you might need to look elsewhere for a larger loan. However, PenFed’s interest rates are in the lower range, with some lenders starting as high as 9.99% APR.

PenFed doesn’t charge any application, origination, or early payoff fees on its personal loans. You may be able to get a loan even if your credit score is as low as 580 – something you don’t see very often.

Once approved, you can get funds delivered via direct deposit within 1-2 business days, or by check within 5 to 7 business days. Funding is fairly quick compared to both online lenders and traditional banks.

Personal Line of Credit

A personal line of credit may be a better option than a loan if you’re concerned about paying interest. With PenFed, you can get a credit line of up to $25,000 and you only pay interest on what you use. If you need a higher credit limit, some lenders provide up to $100,000.

Fixed interest rates start as low as 5.99%, so it could be a more affordable option than a credit card. Still, a few competing lenders offer lines of credit with interest rates as low as 2.49%. PenFed also gives you free checks so that you can access your line of credit. Approval occurs within 24 hours and a 3-day waiting period applies before you can access the funds.

Check Your Rates with PenFed

Auto Loans

PenFed has auto loans for new or used cars, as well as refinancing. Interest rates for purchase loans start between 1.79% to 3.99% APR. Most lenders have starting APRs around 2% to 2.49%, so PenFed could be a more affordable option. Terms range from 36 months to 84 months and loan amounts can be anywhere from $500 to $100,000. Your options will vary depending on whether you’re getting a new or used car.

Auto loan refinancing for 2021 or newer cars starts at 1.79% APR for 36-month terms or 3.99% APR for 84-month terms. 48, 60, and 72-month terms are also available. Loan amounts range from $500 to $100,000. Used cars with 7501 miles have APRs starting at 2.39%, with terms ranging from 36 to 72 months, and loan amounts of $500 to $100,000.

PenFed’s Car Buying Service partners with TrueCar to help you find a vehicle. This partnership gives you discounted pricing on the car and discounted auto loan rates. On average, you could save $4,010 off MSRP for new cars. For new cars, rates start at 0.99% APR on 36-month terms and 1.49% APR on 60-month terms. Used cars start at 1.99% APR for 60-month terms and 3.14% APR for 72-month terms. This service also offers a $1,000 deductible reimbursement.

Check Your Rates with PenFed

Rates and Terms

Since PenFed has such a wide range of products, its rates and terms vary. You can get a personalized estimate using the rate checker on the website.

Terms start at just 3 years for auto loans and could go up to 30 years for mortgages. Interest rates are as low as 0.99% for auto loans, but could go up to 18% for HELOCs.

PenFed claims to charge no fees on its loans, so there are no origination, application, or early payment fees. However, the lender has many other potential fees. For example, if you pay off your HELOC early and PenFed covered the closing costs, you’ll have to pay the closing costs back to PenFed.

Additional fees include:

  • Returned loan payment via check or ACH – $30
  • Late loan payment – $29
  • Car lien placement charge – actual fee incurred
  • Mortgage lien release processing – $20

You may also be subject to late fees on your mortgage or equity loan, depending on what is in your promissory note. Since PenFed has such a wide variety of products, it could be helpful to ask your loan officer to go over any potential fees before you sign.

Application Process and Qualifications

PenFed lets you apply for a loan online. You’ll have to enter some personal and financial information and upload some documents. You can also apply over the phone or in person at a branch office.

You can expect to have to provide the following information:

  • Personal information, like name, birth date, and Social Security number
  • Contact information, including phone number, address, and email
  • Loan type and amount
  • Where you’re at in the process (searching for or already found a home or car, etc)
  • Income
  • Employer information
  • Financial documentation, including W-2s, recent paystubs, and tax returns

Credit score minimums vary from product to product, but generally range from 620 to 670, although jumbo loans do require at least a 700. It’s also worth noting that VA loans do not have a minimum credit score, though you will need to meet government-set qualifications.

Check Your Rates with PenFed

Approval Time

You can complete your loan application with PenFed online in under 20 minutes. Approval time will depend on what type of loan you want and how complete your documentation is. For example, PenFed can process, approve, and fund personal loans within 24 hours.

Meanwhile, if you apply for a loan with the Power Buyer program, you’ll need to go through a full underwriting review, loan documentation approval, and other creditworthiness checks that can take several days. Still, most loan products can get approval in a matter of hours or a couple of days. This is on par with the competition, although some online-only lenders provide approvals in hours.

Customer Service

PenFed’s customer service is available via phone, email, and regular mail. Plus, you could go into a PenFed branch office for in-person service. Its hours of support are Monday through Friday 7:00 AM to 11:00 PM, Saturday 8:00 AM to 11:00 PM, and Sunday 9:00 AM to 5:30 PM EST.

These are fairly standard customer service hours for a credit union, but they’re extensive when compared to online lenders. It’s also worth noting that online lenders rarely offer in-person service. If you prefer a high-touch experience, PenFed could be a good option.


PenFed’s incentive programs set it apart from the competition. When you choose to get a mortgage with PenFed, it rewards you with credits toward closing costs. When you purchase a new car, it rewards you with a reimbursement. It also doesn’t charge any lender fees, which saves you more money. Plus some loans, like personal loans, get approval and funding in just days.

Still, it’s worth noting that there are some fees, like late and returned payment fees, even though PenFed advertises “no fees.” Plus, you have to join the credit union which is free, but requires that you open a savings account with at least $5.

Despite the drawbacks, PenFed’s savings incentives could be worth it. PenFed’s rates are in line with its competitors, but it could be easier to get approved with PenFed. You can check your rates on the website.

It’s also helpful that PenFed has extensive customer service hours, so there’s always a representative to help you throughout the process.

Check Your Rates with PenFed


What credit score is needed for a PenFed loan?

PenFed’s credit score requirements vary by loan type. You’ll need a minimum score of 580 for personal loans, 620 for mortgages, and 670 for student loan refinancing. VA loans do not have credit score requirements.

Can anyone get a PenFed loan?

PenFed is a credit union, so you’ll need to become a member in order to get a loan. However, you can apply for a loan without being a member. If you accept a loan offer, it’s free to join. You will need to open a savings account with at least $5.

Is it easy to get approved for a PenFed loan?

To get approved for a PenFed loan, you’ll need to meet certain qualifications, like a minimum credit score of 580. You’ll also need to provide proof of income. Some loans rely heavily on your credit score for approval, while others, like home loans, are backed by collateral so it’s easier to get approved.

Ginny Dorn
Written by

Ginny Dorn is a freelance personal finance writer. She specializes in credit card debt, personal loans, and mortgages. She graduated from Western Illinois University with a bachelor's degree in family and consumer sciences.

  • Credit rewards for mortgages and auto loans
  • Accepts credit scores as low as 580 for personal loans
  • Offers home loans for 3% down with no minimum income
  • Must open PenFed savings account to get a loan
  • No autopay discount, which most lenders offer
  • Lots of potential fees
Bottom Line

You might consider PenFed if you’re purchasing a home and want to save on closing costs. It could be a good choice if you’re a first-time homebuyer, as you can get a loan with only 3% down. Plus, its personal loans require a lower credit score than most lenders. You might also check PenFed out if you’re refinancing student loans with a spouse.

Still, PenFed is a credit union and you’ll have to open a savings account to get a loan. There are a lot of potential fees and no customization for terms or payments.