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PenFed Debt Consolidation Review

When high-interest credit card debt puts a wrench in your cash flow, debt consolidation loans can help smooth things out. These are issued by different financial institutions, including credit unions like Pentagon Federal Credit Union, known mainly as PenFed.

Since 1935, PenFed’s longstanding history has garnered the trust of 2.5 million members worldwide, representing $31 billion in assets.

Find out if PenFed is the right solution to your debt woes, or see our alternatives list below.


  • Type of Debt Relief – Debt Consolidation
  • Eligibility & Requirements – Must be a U.S citizen or permanent resident 18 years or older.
  • Fees – 49% to 17.99% APR; $25 late fee; $30 unsuccessful payment fee
  • Credit score impact – Minimal
  • Consumer Reviews – Positive

How PenFed’s Program Works

PenFed offers personal loans for debt consolidation of up to $50,000 and terms of up to 60 months. Apply online and receive your money in one to two business days after verification. If you opt to receive funds via check, it could take up to a week. However, the time of day and your financial institution play a part in how quickly your funds may arrive.

PenFed offers neat features to help borrowers compare loan rates and track their application status. Its loan calculator helps compare monthly payment options so you can select the best strategy to tackle your debt.

Those with high incomes may elect higher loan payments to eliminate debt quickly. If high monthly payments are a significant burden, a lower monthly payment will mean more paid in interest but can offer relief by freeing up cash flow.

The PenFed Mobile banking app provides convenient access to your PenFed accounts. Use it to update your application, set up automatic payments, or review account activity. You also have the option to make payments monthly or bi-weekly.

PenFed Eligibility & Requirements

You don’t need to be a member to apply, but membership is required to receive loan funding once approved. Joining PenFed is quick, easy, and open to everyone. It operates in all 50 states and the District of Columbia and Guam, Puerto Rico, and Okinawa.

PenFed may request your recent pay stubs, retirement statements, bank statements, or tax returns, depending on your income situation.

To verify your identity, PenFed may request a copy of your government-issued photo ID, such as an unexpired passport or driver’s license, your latest utility bill, or a copy of your social security card.

The website does not disclose a credit requirement, but applicants should aim for a score of at least 600 for approval.

Fees for PenFed’s Services

PenFed offers an enticing range of APRs from 5.49% to 17.99%. Your APR will be based on various factors, including an evaluation of your credit history and the length of your PenFed membership. Meaning not all applicants will receive the lowest rates. The best rates will go to borrowers with excellent credit history.

If your payment is more than five days late, you will be charged a late fee of $29. There’s also a fee of $30 for denied or unsuccessful payments.

Pros & Cons of Debt Consolidation with PenFed

PenFed is a longstanding Credit Union with a history of reliable customer service. Its strengths include low APRs and options to help borrowers qualify or lower interest rates. Becoming a member to receive funds may vex some, but the process is quick and accessible to all. Everything can be done online, but there are few options outside of D.C if you prefer in-person customer service.

Pros of PenFed

  • No early payoff penalty
  • Co-borrower option can lower interest rates
  • No origination fee

Cons of PenFed

  • Must become a PenFed member to receive a loan
  • Must open savings account to become a member (requires a $5 deposit)
  • Few physical branches outside of D.C

Is PenFed Right for Me?

PenFed is ideal for those with good credit, able to capitalize on the company’s low-interest rates. It doesn’t list a minimum credit score requirement, but it does let you apply with a co-signer to strengthen your application. If you want to organize your debts and can stay atop monthly payments, PenFed is a reliable option with great rates and few fees.

The best way to decide if PenFed works for you is by checking your rate. It’s free and has no impact on your credit score. Those who go forward with the loan will undergo a hard credit check, and this will harm your credit for a short time.

Alternatives to PenFed

PenFed is one of many possible solutions to overcoming debt. Several organizations offer practical resources and guidance for managing money. There’s also no shortage of online and traditional lending resources for borrowers to choose from. Here are some options to consider if PenFed isn’t for you.

Debt Management

Nonprofit credit counseling agencies offer these programs to help consumers budget and plan finances while eliminating debt. A debt management plan can lower your interest rates, making it easier to keep up with payments and providing relief from pesky creditors.

SoFi Debt Consolidation Loan

SoFi offers rates as low as 6.99% APR, and their loans come with no fees. Terms range from three to seven years, and borrowers need a score of at least 680 for approval.

LightStream Debt Consolidation Loan

Lightstream delivers a streamlined process with some applicants seeing funds the same day as approval. This is another option for those looking to avoid fees. It offers interest rates as low as 5.73% and can fund between $5,000 and $100,000.

PenFed Reputation & Consumer Reviews

PenFed has an A+ rating with the Better Business Bureau. However, the credit union is not accredited by the BBB.

Customers were impressed at the low rates and high funding potential. Positive reviews called the process “flawless,” thrilled at the fast pace of application and quick deposit of bank funds. Debt consolidation can be a lifeboat for sinking consumers, and most of PenFed’s reviews exemplify a sound, reliable company.

Others found joining PenFed to receive funds an inconvenience. Negative reviews complained of being locked out of accounts without adequate customer service assistance. Others were confused why their high credit score led to denied applications. However, PenFed clarifies that credit score is not the only factor in receiving a loan.

Mobile users should note the Penfed banking app has a 4.2 rating on IOS and a 4.4 rating on Google Play. Downloading the app can make it easier to track loan application status and browse transaction details.

About The Author

Bents Dulcio

Bents Dulcio writes with a humble, field-level view on personal finance. He learned how to cut financial corners while acquiring a B.S. degree in Political Science at Florida State University. Bents has experience with student loans, affordable housing, budgeting to include an auto loan and other personal finance matters that greet all Millennials when they graduate. He has a prodigious appetite for reading, which he helps feed with writing from Scottish philosopher Adam Smith, the “Father of Capitalism.” Bents writing also has been published by JPMorgan Chase, TheSimpleDollar and


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