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How to save thousands with PenFed CU

Although you are a member of PenFed CU there is a 88% chance that you have your car loan with another lender. You probably got your loan at the dealership when you bought the car, which isn't ideal because PenFed CU offers you much lower rates. In fact, you can probably save more than $300 every year / $25 every month through refinancing.

The good news is that we can help fix this quickly, especially if you made all of your loan payments on time. Instead of making your monthly payment to the other lender, check your eligibility and refinance now.

Table of contents


  1. How to make your PenFed CU payment
  2. Some background on PenFed CU
  3. Refinance your auto loan with PenFed CU
  4. PenFed CU loan payoff amount
  5. How soon can you refinance your loan with PenFed CU
  6. Will refinancing your loan with PenFed CU hurt your credit
  7. Can I skip a car payment with PenFed CU
  8. Does PenFed CU have a grace period
  9. How long does PenFed CU take to repossess my car
  10. What happens if I pay extra on my PenFed CU loan
  11. Savings from refinancing with PenFed CU
  12. PenFed CU reviews
  13. Does PenFed CU report to the credit bureaus
  14. PenFed CU car loan refinance rates
  15. Can you refinance your PenFed CU loan with the same lender
  16. Refinance your loan with PenFed CU now

How to make your PenFed CU payment


If you currently have a loan with PenFed CU paying online is easy. Simply go to https://www.penfed.org and login on the right at Log In. You can choose between:

  • Making a one time payment.
  • Enrolling in Autopay from your checking account.

Please note that many banks and financial institutions offer a discount for enrolling in autopay (to reduce your interest expense and lower your monthly payment). PenFed CU would have highlighted this option to you to get you into a lower interest rate when you got pre-qualified for your auto financing.

If you can't pay online, you've also got the option to:

Pay your bill over the phone: Call 1-800-247-5626

Pay your bill through the mail: Send a check to PenFed CU

PenFed CU
2930 Eisenhower Avenue
Alexandria VA 22314

Nicholas Hinrichsen - Published: September 21, 2020

Some background on PenFed CU


Before going into more detail, here a little background about PenFed CU: PenFed is the US's third largest Credit Union, with assets of $25 billion and more than 1.8 million members. While PenFed specializes in serving the military, military affiliation is not strictly required to become a member

Like any other Credit Union, PenFed has a community charter and therefore offers its products such as auto loans at extremely competitive rates. In addition to a variety of loans, savings, and deposit products PenFed also offers credit cards and other financial services.

PenFed CU has a seasoned management team with financial services expertise, leading a team of 2,549 full time employees. Like most federal credit unions, which are non-profit organizations, PenFed CU is a different kind of financial institutions. Headquartered in Mclean (VA), James Schenck is responsible as the CEO of the financial cooperative supported by Jill Streit as the CFO and Jamie Gayton as the COO.

PenFed CU is Federally Chartered and Insured and offers - next to bank accounts with lower fees, checking accounts, access to a number of ATMs, FDIC approved savings accounts with high savings rates, money market accounts with high saving rates, student loans, debit cards, credit cards and other superior products - two important loan offerings with better rates. Mortgages (incl. home loans and HELOCs) and auto loans, including for first time buyers:

Mortgages (incl. home loans and HELOCs):
Financial health, financial well-being, financial education and members' financial quality are PenFed CU's main objectives. PenFed CU therefore offers mortgages, home loans and a home equity line of credit at low rates and through an online mortgage application.

Mortgage rates are currently at the rock bottom, which is great for homeowners. A lot of PenFed CU's members are taking advantage of the low rates and refinance.

Auto loans
12% of the members have auto loans with PenFed CU while the other 88% of the members either don't have auto loans at all or got their vehicle-loans at the dealership, during the car sale process and are overpaying. If you were to get your auto loan from the nonprofit today while interest rates are at the rock bottom, your APR for excellent credit on a new car would be 3.% and on a used car would be 4.%.

In total, PenFed CU has given 229,408 auto loans to its members worth $3,427M. Out of these loans, 59% are for used cars and 41% for new cars. PenFed CU gets 5% of its auto loans through partnerships with dealerships and 95% through its business services, call centers and service centers which have a direct relationship with the members.

Once you become a credit union member, you benefit from all of PenFed CU's financial products and banking services. Historically, you'd visit the physical branches and build a relationship with the branch manager and tellers. If you are a small business owner, you probably regularly visited the branch during teller hours to check your account balances. Today, in contrast, most of your interactions with PenFed CU are through mobile banking via the mobile app. Even your chamber of commerce transitioned to an online experience!

PenFed CU targets the segment of American car shoppers with great (i.e. super prime) credit and we observed an average auto loan interest rate of 5% (within a range of +/- 1%), while rates vary a lot by credit score. Our PenFed CU auto loan calculator can pre-qualify you through a simple credit application and help you get a sense for how much you can expect to save from a PenFed CU auto refinance and the best rates.

Refinance your auto loan with PenFed CU


Even if you already have your loan with PenFed CU, you might be able to lower your monthly payments. We need to find you a lender that can extend your used car loan term or who offers lower auto loan rates before the loan is paid in full. Usually, lenders offer you a lower rate than your current auto loan for one of two reasons:

  1. When you bought your car, the participating dealer received a referral fee from PenFed CU, which ultimately came out of your pocket. That's common for auto loan originations and to make more money.
  2. You improved your credit over time and now qualify for a lower car payment and interest rate.

Both of these observations are the reason for why you can save a lot of money, especially if you use your car for personal use. You had great credit with the credit bureaus and further improved your credit report, you're not facing any financial difficulties and therefore, your new lender will be likely one of the following ones:


You already had super prime credit segment (FICO above 720 on your credit history) and are wondering if you can still save some money or stretch your loan? Credit Unions love super-prime members. These lenders have a community charter, are FDIC approved and are non-profits providing a great customer experience. Therefore, the rates are as low as they get.

In the following, we will walk you through the exact steps to pay off your PenFed CU loan. If you want to skip the details and refinance now through a simple loan application, get an offer with a few clicks and with no impact on your credit.

PenFed CU loan payoff amount


First and foremost, we need to pull up your PenFed CU loan payoff statement. The loan payoff statement is not your outstanding balance. Instead, the loan payoff statement summarizes the following data points:

  • your payoff amount (usually your loan amount balance plus a few small fees)
  • the due date until your payoff is valid to avoid late fees (usually 10 days from when you requested it)
  • the per-diem (how much of daily interest your loan accumulates)
  • your account number (the new lender needs that to payoff your loan)
  • the payoff address (the new lender needs to know where to mail the check to)

There is no such thing as prepayment penalty and all the above information can be found on the official payoff statement and just to be clear. You have multiple payment options but first you need to locate the payoff statement from PenFed CU's customer service reps:

  1. Call the PenFed CU customer service phone number at 1-800-247-5626 and ask to be connected to the loan payoff department.
  2. Log into the online banking at Log In (https://www.penfed.org, login on the right) and browse to the 'Loan Payoff' tab. You will be able to download a PDF.
  3. Do a three-way phone call with the new lender and a PenFed CU customer service rep at 1-800-247-5626, which allows the new lender to ask PenFed CU all the questions necessary to pay off your existing loan.

Should you plan to payoff your loan and you are currently in the United States, you can overnight a check to the following address:

PenFed CU
2930 Eisenhower Avenue
Alexandria VA 22314

Once you paid off your auto loan, expect to receive the vehicle title along with a lien release letter in the mail. Car loans are usually secured personal loans and in order to be able to sell your vehicle or refinance it, you need the lien release in hand.

We provided those addresses above because we always struggle to find a service provider's contact information. Just be aware, due to COVID-19, waiting times for customer service reps might be longer than usual. Want us to take care of the refinance for you? We can lower your rate in less than two minutes.

How soon can you refinance your loan with PenFed CU


You're eager to refinance your PenFed CU loan? Great, you should absolutely work towards lowering your PenFed CU payments through refinancing.

Dealers make most of their money on finance and insurance products. Therefore, there's a good chance that you are overpaying and can save money through refinancing - already the day you drive off the lot! That said, you will save the biggest amount of money from refinancing after you made 12 to 18 payments. That's when you will notice the effect from improving your credit above and beyond great (i.e. super prime) credit.

That said, we recommend checking regularly: you can get a free refinance offer with no impact on your credit in three simple steps.

Will refinancing your loan with PenFed CU hurt your credit


Refinancing will not hurt your credit! If you have the app CreditKarma installed on your phone, take a peek at what factors determine your credit. You will find the following:

  • Number of Hard Inquiries (less is better)
  • Age of Credit history (more is better)
  • Credit Card Utilization (less is better)
  • Total Accounts (more is better)
  • Derogatory Marks (less is better)
  • Payment History (more is better)

None of these factors is impacted negatively if you obtain a refinancing offer for your PenFed CU loan. Lenders don't need to do a hard credit inquiry to make you a firm refinance offer. Neither do they charge an application fee. From a soft credit pull, we can see your whole credit file and estimate your rate.

Should you decide to accept the refinance offer, the new lender will have to perform a hard inquiry in order to add your new loan to your credit file. The hard inquiry, however, only happens after you have been approved.

We argue that the positive impact of refinancing your PenFed CU loan outweigh the negative impact of the hard credit inquiry: after you refinance your PenFed CU loan, you will have a lower rate and lower monthly payments. As a result, the likelihood that you will be able to establish a perfect payment history increases which will drive your score up quickly.

Can I skip a car payment with PenFed CU


You're short on cash and are wondering whether you can skip a car payment with PenFed CU? The answer is yes, you can defer one or more payments on your existing auto loan. You have to talk to PenFed CU about the deferral first though. You can't just not pay or you risk collection calls and ultimately a repossession.

Ideally, you give PenFed CU a call at 1-800-247-5626 and describe your situation. PenFed CU's goal is for you to make your payments throughout the whole term of the loan. Finance charges will continue to accrue on the unpaid loan balance, which means you will end up paying more on your loan after all. But for as long as you communicate well with PenFed CU, they will defer one or more payments out of courtesy and to help you with your repayment.

All that said, you can lower your PenFed CU payments through refinancing if you've made all your latest payments on time. In three simple steps, you can find out how low your payments could be without having to skip a payment or two.

Does PenFed CU have a grace period


The PenFed CU late payment policy provides a grace period of 7 to 15 days. Grace periods vary from lender to lender and due to the coronavirus pandemic, banks have become a lot more lenient with their borrowers.

Late fees vary drastically by loan, the minimum late fee we've encountered was 5% of the monthly payment amount. However, we strongly advise not to take advantage of PenFed CU's grace period unless you have an emergency. You'd be putting your credit at risk, which can have a long-term, negative impact on your personal finances.

Instead, we recommend exploring if refinancing can help you reduce your monthly burden and potentially even provide unexpected cost savings. Provide your phone number and follow our three simple steps to get a firm offer, 100% online and with no hit on your credit.

How long does PenFed CU take to repossess my car


Repossession law varies slightly from state to state and range from 3 to 5 months after you stopped making payments on your PenFed CU loan. Each individual retail and installment contract - the contract you signed when you got your car and PenFed CU loan - states what constitutes a default.

Some states and contracts even trigger a repossession within 45 days (or a month and a half) of being in default. You are in default when you stopped making your payments and for as long as you haven't paid the PenFed CU late fees.

Just catching up with your missed payments making PenFed CU whole doesn't automatically mean you're not in default anymore. You really need to pay PenFed CU everything you owe including fees to be not considered in default any longer.

What happens if I pay extra on my PenFed CU loan


The answer is simple: your loan term will shorten but your monthly payment will stay the same. A number of our customers hope they can reduce their monthly payments through paying extra but no lender will do that.

To lower your monthly payments, you have to refinance your loan. If you haven't considered refinancing your PenFed CU loan yet, you definitely should: not only can you reduce your monthly payments within 2 minutes or less, your total interest expense will go down as well and as a result, you can save $150 every year / $13 every month.

Savings from refinancing with PenFed CU


We performed a study on the top 40 auto loan companies to refinance and found that the average PenFed CU loan rate is around 5% (within a range of +/- 1%). If you made your payments for 6 / 12 / 18 consecutive months, you're guaranteed to be able to save money on your PenFed CU loan.

Your new interest rate should be on the order of 4% or below. That means you will save $100 every year / $8 every month if your remaining loan balance is around $10,000 and you refinance. Usually, we see higher loan balances when refinancing our customers, e.g. around $15,000. If your loan balance is around $15,000 you will save $150 every year / $13 every month when you lower your rate by 1%.

For a guaranteed rate in less than 2 minutes, open WithClutch.com, enter your phone number, select your goal (e.g. 'Lower my monthly payment') and click on 'Apply Now'. Our process will not hurt your credit and you'll receive a firm and guaranteed rate with not more than 5 clicks. Should you have any further questions, check out our FAQs.

PenFed CU reviews


If you currently have a loan with PenFed CU, you most likely got the loan at the dealership during the car purchase. You probably used your used vehicle as a trade-in to lower your down payment. The dealer found you your loan and you can make your payments by clicking on Log In at https://www.penfed.org.

79% of all Americans with auto loans get their auto loan at the dealership. People shop for new cars, they don't shop for new loans. As a result, auto dealers have a leg up when it comes to giving car shoppers loans. In fact, the same is true for auto insurance and when you inquire about a warranty.

The challenge is this:

  1. the number 1 goal of a car dealer is to sell a car
  2. the number 2 goal of a car dealer is to sell the car at the highest possible margin

Considering the interests of the car dealer and how most car shoppers get their loans, no wonder Americans are overpaying on their interest rates, right?

As mentioned above, PenFed CU is an auto loan and financial services company that specializes on the segment of Americans with great (i.e. super prime) credit. We looked at reviews for PenFed CU and found the following:

  • BBB: 1.2 out of 5 stars and 192 complaints
  • Yelp: 2 out of 5 stars from 162 reviews
  • Glassdoor: 3.6 out of 5 stars from 455 reviews

Ever wondered if PenFed CU treats everyone like you? Sadly, they do. Other loans you might have also qualified for could have been with one of the following auto loan companies:


If you bought your car at a Franchise Dealership, you may have qualified for a loan with one of the Captive Finance companies (i.e. the auto loan companies that are owned by the respective car brand), e.g.:


After you've made your first 6 / 12 / 18 payments, your chance to refinance your loan and lower your monthly payments has come. The challenge with refinancing is that most auto loan companies require you to visit their branch before they can give you any indication of how much money you will be saving. Fortunately, we can help with that.

Does PenFed CU report to the credit bureaus


When you first obtained your auto loan, PenFed CU reported your new loan to the credit bureaus. Your PenFed CU loan shows up as a so called trade-line on your credit report. Through a soft or hard credit inquiry, we can see:

  • When you got your PenFed CU loan
  • What your initial balance was
  • How high your monthly payment is
  • Whether you've made your payments in time and full
  • How high your outstanding balance is
  • How many payments are remaining

If you miss a payment, PenFed CU will very likely report the incident to the credit bureaus. Just like any other auto finance company, PenFed CU will also report to the credit bureaus when you paid off your loan or refinanced it. In both of those cases, your loan will show up as paid off.

PenFed CU car loan refinance rates


We can help you get the following PenFed CU refinance rates:

Credit New car Used car
760+ 2.69% 3.49%
700-760 3.00% 4.25%
650-700 5.50% 6.50%
600-650 9.75% 10.75%
550-600 15.50% 17.50%
Below 550 22.00% 22.00%

As mentioned above, PenFed CU car loan rates vary a lot by credit score, i.e. lowest rate for excellent credit to highest rate for challenged credit. Yet, the rates are usually the same no matter where you live in the United States - be it Hawaii or Maine, Alaska or Florida. We therefore recommend taking a look at your PenFed CU refinance offer for your exact and personalized refinance terms.

Can you refinance your PenFed CU loan with the same lender


The answer is short and sweat: no, you cannot refinance a PenFed CU loan with the same lender. PenFed CU does one of two things with your loan:

  • Keep it and generate profit over the course of the loan and while you are paying your interest.
  • Sell your loan to an institutional investor or the public through a securitization to realize a lump sum profit immediately.

In both of those cases, the institution holding your loan is expecting your monthly payments. When you refinance, however, you change the expected cash flow to PenFed CU, which impacts PenFed CU's bottom line. PenFed CU would not allow that.

Therefore, PenFed CU won't let you refinance your loan with the same lender (i.e. PenFed CU). Instead, you need to find a new lender offering a lower rate.

Fortunately, we recently studied the best auto loan refinancing companies and wrote a thorough review. In a nutshell, only WithClutch offers a fully digital pre-qualification experience, even for borrowers with minimum monthly income and without charging unreasonable fees. We do our best to give our clients the best auto refinance loans. Our partner lenders can offer the lowest rates and can help with lease buyouts as well as refinancing.

Refinance your loan with PenFed CU now



Haven't explored refinancing yet? WithClutch.com is a fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.

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