A personal loan can be an affordable way to manage financial needs such as debt consolidation, home improvement, or unexpected medical expenses.
One of the lenders providing personal loans to qualified borrowers is Pentagon Federal Credit Union. Better known as PenFed, this Virginia-based lender operates in all 50 states, offering its members access to affordable personal loans for just about any financial need.
PenFed Credit Union was established in 1935 and has since grown into a well-known credit union with more than 1.8 million members. PenFed is federally insured through the National Credit Union Administration (NCUA) and advertises some of the best rates on its loan products.
PenFed personal loans are only available to current or eligible PenFed members. You may be eligible for PenFed membership based on association membership, your employment, a military affiliation, or something else.
In this review:
- Applying for a PenFed Personal Loan
- PenFed Loan Rates, Terms, Fees, and Limits
- Benefits of a PenFed Personal Loan
- Downsides of a PenFed Personal Loan
Applying for a PenFed Personal Loan
Obtaining a personal loan with PenFed starts with a brief application process. Borrowers can submit a loan application online, in person at a branch location, or over the phone, so long as they have the following required personal information:
- Name, date of birth, and Social Security number
- Home address
- Employment information
- Income sources
- Amount of loan requested
- Reason for the loan
- Identification, such as a driver’s license or passport
Current PenFed members can simply log into their online banking account to apply for a personal loan. The financial institution can review and approve a loan instantly; upon credit approval, you’ll gain access to the funds the same business day.
If you are not a current PenFed member, you can still apply for a personal loan. If approved, you will need to fill out a membership application and pay a one-time $5 membership fee before you can receive your funds.
PenFed is a more conventional lender compared to online personal loan providers. This means that although the application process is quick and easy, the credit requirements for getting a PenFed personal loan are a bit more stringent than alternative lenders. Borrowers may qualify if they have a strong credit history, a high income, or a combination of the two.
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PenFed Loan Rates, Terms, Fees, and Limits
Personal loans offered through PenFed can meet the needs of many different types of borrowers, regardless of the reason for the loan funding.
- Fixed interest rates as low as 6.49%
- No origination fees or prepayment penalties, unlike competitors such as LendingClub or Avant
- Loan terms from 12 to 60 months, based on loan amount and creditworthiness
- Minimum loan amounts start at $500, with a maximum $25,000
- Autopay available via PenFed checking account or savings account
- Five-day grace period for monthly payments; otherwise, late payment fees are 20% of the amount you pay in interest each month
Borrowers can use loan funds for any reason they see fit, including credit card debt consolidation, vacations, vehicle or home repairs, and medical bills.
Benefits of a PenFed Personal Loan
PenFed personal loans offer several benefits to borrowers.
- The credit union operates in all 50 states, making it easy for those who qualify for membership to get the financing they need no matter where they live.
- PenFed makes the application process simple. Borrowers can apply online, in person, or over the phone, and approval can be fast for the most qualified applicants following a review of their credit information.
- Lower rates are arguably the most notable benefit of a PenFed personal loan. Other financial institutions provide personal loans with comparable interest rates, but many lenders also charge origination, funding, application, or prepayment fees that increase the overall cost of borrowing.
Downsides of a PenFed Personal Loan
Although there are a handful of perks available with PenFed personal loans, some caveats exist.
- Borrowers who apply for a PenFed personal loan who want the lowest possible interest rate must have excellent credit to qualify. Higher interest rates may be offered to borrowers who have less-than-perfect credit.
- PenFed only offers personal loans up to $25,000. This amount may not be high enough to cover the financial needs of every borrower.
- Similarly, the credit union only allows repayment options of up to 60 months. For larger personal loans, this could mean a higher monthly payment that can be harder to manage for some borrowers.
- All borrowers must be members of the credit union first. While PenFed has continuously expanded its membership requirements to allow more individuals to become eligible, restrictions still apply.
- If you do not fall into the field of membership for PenFed, you won’t be able to receive loan offers through the credit union.
>> Read More: Best Personal Loans for Fair Credit
Overall, a PenFed Credit Union personal loan is a great choice for those in need of quick cash. Borrowers need to first be members of the credit union to qualify, and they must also have relatively good credit histories and credit scores to be eligible for the lowest rates. For those who meet these requirements, a PenFed personal loan is a smart choice.
Because there is flexibility in how the loan funds can be used and no collateral is required to open a line of credit, borrowers have many reasons to want a PenFed loan. However, not everyone is eligible, either because of membership restrictions or credit issues.
If you can qualify for a PenFed personal loan, you are likely to get an affordable loan with a predictable repayment schedule that can help you take care of your financial needs.
>> Read More: Best Personal Loans4.29 PenFed Personal Loans
Author: Melissa Horton
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