Availability: Loans only available to members. Membership based on military service, government employment, school district employment, volunteer work, donation, or qualification by association.
Pentagon Federal Credit Union (PenFed) is the third largest credit union in the nation and is headquartered in Virginia. PenFed offers a variety of financial services including loans, savings, deposit accounts, credit cards, and more. Since PenFed is a credit union, they are membership based. PenFed’s membership program focuses on military banking. This means, their members are people who serve America through military service or active participation in the nations government and school systems. If you’re not a government employee or related to one, you can simply volunteer or donate to the military to gain membership.


Rank Chart
Loan Amount
Term Length
Our Score
36-75 months
$5k-No Max
12-84 months
36-72 months
36-72 months

The Good

PenFed is a large credit union that offers personal, auto, home, and recreational loans. They have many easy loan options with low APR interest rates. As long as you’re a PenFed member you can apply easily online and they respond quickly, sometimes even instantly. This is what we liked:

  • APR as low as 0.99%
  • Small loan options (as low at $500)
  • Up to 110% financing available
  • Easy online application
  • Preapproved auto drafts available to qualified buyers
  • After 12 months you can appeal to extend and lower your payments
  • No early pay off penalty
  • No mileage or car age restrictions
  • Free Carfax reports
  • Free TrueCar price reports
  • Discounts on car insurance with membership
  • Discounts on tire services with membership

Not only does PenFed have these great options, but they also have a comprehensive website that offers financial tips. Their car search options allow you to shop for your new car and find the perfect loan at the same time. Not only do they help you shop for cars, but their members also report an estimated $3,000 in savings off of MSRP on their new cars. Additionally, PenFed offers member discounts on purchasing a Mercedes-Benz. They are also one of the few companies that still offer a payment saver option. Essentially, you can make smaller payments for 60 months and then pay the remaining amount of your loan in a balloon payment at the end of the 60 months.

The Bad

The only catch to PenFed banking is you have to be a member. Since PenFed is a credit union they are member based and you have to qualify for membership based on any of the following; military service, government employment, school district employment, volunteer work, donation, or qualification by association. Other things that PenFed doesn’t offer are free credit checks and bad credit loans. Additionally, PenFed has a helpful customer service phone number; however, this is their only customer service option so if you need assistance you have to call in during business hours.

The Bottom Line

We would recommend PenFed as a great place for your auto loan. If you qualify for membership and you have an excellent credit score, then you can’t beat an APR of .99%. PenFed is a reliable federal credit union and would be an excellent place to get competitive loan rates.

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