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
New Car Term Length
Our Score
#1
$5k-$100k
24-84
6.2
#2
$8,000 - ?
36 - 72 Months
6.1
#3
$1k-$100k
36-84
5.0
#8
pen_fed_credit_union
$15k+
Undisclosed
3.5

The Good

  • Low APR
  • Free Carfax reports
  • Membership discounts

Loan Options

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

Advantages

  • APR as low as 1.49 percent
  • Up to 110 percent financing available
  • Easy online application
  • Pre-approved auto drafts available to qualified buyers
  • After 12 months you can appeal to extend and lower your payments
  • No early pay off penalty
  • Free Carfax reports
  • Free TrueCar price reports
  • Discounts on car insurance with membership
  • Discounts on tire services with membership

Perks and Discounts

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

  • Members only
  • No free credit checks
  • Limited customer service

Members Only

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.

No Free Credit Checks

PenFed doesn’t offer are free credit checks. Some companies offer free credit checks, or provide a third party option to get your score for free. 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. A lot of companies in the industry offer other options, such as live chat and email. Only offering customer service over the phone limits customers who may not have access to a phone, or cannot call during regular business hours.

The Bottom Line

Pentagon Federal Credit Union offers low APR, discounts, and free reports. However, their services are only available to members, which greatly limits who can benefit from their services. We would recommend PenFed as a great place for your auto loan. If you qualify for membership and have an excellent credit score, then you can’t beat an APR of 1.49 percent. PenFed is a reliable federal credit union and would be an excellent place to get competitive loan rates.

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