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PenFed Personal Loans Review: Good for Small Loan Amounts

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PenFed Credit Union personal loans at a glance

PenFed logoAPR: 5.49% - 17.99%Loan Terms: 12 to 60 monthsLoan Amounts: $600 to $50,000Origination Fee: None

PenFed Credit Union (PenFed) offers unsecured personal loans nationwide and stand out for its wide range of borrowing options. You could take out PenFed personal loans for anywhere from hundreds of dollars to thousands, and elect to repay it in 12 to 60 months.

This lender also offers competitive interest rates to well-qualified applicants, and doesn’t nickel and dime its borrowers with application, origination or other types of fees. Plus, as our PenFed loan review indicates, unclear eligibility requirements are made up for by the fact that you could prequalify without affecting your credit score.

  • Gain preapproval without commitment: Prequalifying with PenFed allows you to confirm eligibility and check rate and term options without submitting to a hard credit check.
  • Varied borrowing amounts: PenFed lets customers take out anywhere from $600 to $50,000, making it one of the best options for borrowing small amounts while also leaving open the door for five-figure sums.
  • No fees: PenFed doesn’t charge origination fees — which are common with personal loans — or impose a penalty for paying off your debt ahead of schedule.
  • Mobile access: PenFed’s app helps borrowers manage their repayment from a smartphone or tablet.
  • Co-applicants permitted: If you can’t qualify on your own, you could apply for a PenFed personal loan with a co-borrower who agrees to share the responsibility of repayment.

  • Prequalify without commitment
  • Low and high borrowing amounts
  • Competitive APRs
  • No origination fee or prepayment penalty
  • Mobile app has good reviews
  • Co-borrowers accepted
  • Receive funds in 1 to 2 business days (if you opt for direct deposit)
  • “Financial Hardship Center” offers resources
  • Credit union membership is required
  • Credit, income criteria aren’t publicly available
  • Late payment fee of $29 (five days after due date)

PenFed personal loan requirements: How to qualify

  • Minimum credit score: Not specified
  • Minimum credit history: Hard Pull
  • Maximum debt-to-income ratio: Not shared

The eligibility requirements for a personal loan typically comprise your credit score, repayment history and income. Lenders will use these and other factors to determine your creditworthiness (how likely you are to repay your debt on time).

Unfortunately, PenFed personal loan doesn’t make its criteria publicly available; the lender only says that it will request certain information during the application process, including:

  • Income verification: Recent pay stubs, bank or retirement account statements, tax returns
  • Identity verification: Copy of government-issued photo ID, newest utility bill, Social Security card

PenFed personal loans also come with the requirement of becoming a credit union member, though the lender says this is a seamless process.

Which borrowers are the best for PenFed personal loans?

Given their unique features, PenFed personal loans could be best for borrowers looking to borrow less than $5,000, a typical minimum loan amount among many reputable lenders. PenFed’s minimum borrowing amount was just $600, as of February 2022.

PenFed could also be an attractive option if you’re prioritizing lenders that skip origination fees, allow  joint personal loans or give you the ability to manage your loan from a mobile device.

Acceptable reasons for borrowing PenFed personal loans
  • Debt consolidation
  • Home improvement expenses
  • “Life and events”
  • Medical and dental bills
  • Transportation

Applying for a personal loan from PenFed

The best option to have with a personal loan application is to be able to prequalify — that is, check rates without hurting your credit score. You can do just that by visiting PenFed’s website, clicking “Check Your Rate” and supplying basic personal details, such as your address, email and phone number, plus the following information:

  • Reason for borrowing
  • Loan amount
  • Loan repayment term
  • Social Security number
  • Annual income
  • Monthly housing cost

If you accept PenFed’s personal loan quote (ideally, after comparing rates and terms with other lenders), you’ll then be asked to complete the more formal application process, which includes verifying the information you previously provided and becoming a PenFed member. That last step is a typical prerequisite for most credit union personal loans.

PenFed personal loans compared to competing lenders

Comparing PenFed to competitors

PenFedLightStreamMarcus by Goldman SachsHappy Money
APR: 5.49% - 17.99%
Loan length: 12 to 60 months
Loan amount: $600 to $50,000
Origination fee: None
Min. credit score: Not specified
APR: 3.99% - 19.99%
Loan length: 24 to 144 months
Loan amount: $5,000 to $100,000
Origination fee: No origination fee
Min. credit score: Not specified
APR: 6.99% - 19.99%
Loan length: 36 to 72 months
Loan amount: $3,500 to $40,000
Origination fee: No origination fee
Min. credit score: 660
APR: 5.99% - 24.99%
Loan length: 24 and 60 months
Loan amount: $5,000 to $40,000
Origination fee: 0.00% - 5.00%
Min. credit score: 640

LightStream vs. PenFed Credit Union

LightStream differs from PenFed in a few critical areas, offering a longer loan term (24 to 144 months) and a much higher maximum loan amount (up to $100,000). And though the lowest advertised rates at LightStream are lower than PenFed’s, LightStream doesn’t offer prequalification to help you confirm your eligibility and receive an APR quote. Still, LightStream could be worth considering after you’ve checked with lenders that do have a preapproval process — the lender is known, in part, for fast funding.

Marcus by Goldman Sachs® vs. PenFed Credit Union

Unlike PenFed, Marcus by Goldman Sachs® shares at least some of its eligibility criteria online — so if you have the minimum 660 credit score needed to borrow a Marcus personal loan, its associated perks could be worth your while. (However, you’d need to be able to do so as an individual, since Marcus by Goldman Sachs doesn’t currently accept joint applications.)  This fee-free lender allows borrowers who make 12 straight payments to skip a future payment without interest accruing. It also offers prequalification, so it’s worth considering as you shop around.

Happy Money vs. PenFed Credit Union

If consolidating credit card debt is your primary reason for borrowing a personal loan, you might opt for Happy Money (formerly Payoff). The lender designed its personal loan product for borrowers hoping to group and pay off multiple credit card balances — plus, its 640 minimum credit score requirement is lower than that of many lenders, which also makes it more accessible. Just be aware that many Happy Money personal loans come with a potentially costly origination fee.


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