Loans Online – PenFed Personal Loans Review: Co-Borrowing, Next-Day Financing

Personal loans can be useful when consolidating or financing large amounts, but they are often just as helpful for smaller costs like moving expenses, home improvement projects or unexpected medical bills.

CNBC Select found PenFed Loans to be the best option for consumers looking for smaller personal loans: While many lenders start at a minimum of $1,000, PenFed finances loans as low as $500.

You don’t need to be a member of the credit union to apply, but you must be a member to receive the funds. Credit union membership is available to anyone, and once you’re approved for a loan, you can apply to become a member of PenFed online. (You’ll need to keep a minimum of $5 in a qualifying savings account to maintain an active membership.)

Below, CNBC Select reviewed PenFed personal loans, looking at APR, perks, fees, loan amounts and term lengths. (Read more about our methodology below.)

Your APR will vary depending on your credit rating and application, but PenFed loans have APRs between 6.49% and 17.99%. Whatever rate you qualify for will be your fixed rate for the duration of your loan term.

Unlike some personal loans, PenFed loans give you the option to apply with a co-borrower.

A co-borrower is any additional borrower whose name and financial information appears on the loan documents and is also responsible for paying back the loan. If either borrowers should fail to complete payments for the loan, both credit scores would be affected.

Having a co-borrower can be beneficial when applying for a loan because the combined profiles and income from two borrowers could get you more favorable terms.

For those with lower credit scores, co-applying with someone could help you qualify for a better APR. Applying with a co-borrower is therefore a good option for couples or family members who want to take out a loan together.

PenFed requires borrowers to pay a minimum monthly payment of $50.

You will be charged a $29 late fee if you miss a payment, but there are no fees or penalties for paying off your loan earlier than planned. There are no origination fees.

Loans can be as low as $500 and there is a maximum loan amount of $20,000. Upon your approval for a loan, you can get your funds within one to two business days. PenFed only issues loans in the form of physical checks, that you can pick up at one of its 45 branches in 35 cities or get in the mail. (For next-day funds, expedited shipping costs may apply.)

PenFed loan payment terms can be up to 60 months (five years). Terms are subject to a minimum monthly payment of $50.

With the option to apply with a co-borrower, PenFed Loans are well-suited for couples and/or family members seeking to finance life events or even pay off their debt.

Small caveats to PenFed Loans are that you have to be a member of the credit union to accept a loan, and PenFed only give loans in the form of a physical check. If there is a branch near you, you can pick up your check in person, but if not you have to pay for expedited shipping to receive your check the next day.

If you have good credit and/or need a larger loan, LightStream personal loans could be a better option for you. For qualifying applicants, LightStream offers the lowest APR on CNBC Select’s list.

To determine which personal loans are the best, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions, that come with no origination or signup fees, fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

When narrowing down and ranking the best personal loans, we focused on the following features:

• No origination or signup fee: None of the lenders on our best-of list charge borrowers an upfront fee for processing your loan.
• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
• Flexible minimum and maximum loan amounts/terms: Each lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
• No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
• Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
• Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
• Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
• Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $500 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

After reviewing the above features, we sorted our recommendations by best for overall financing needs, debt consolidation and refinancing, small loans and next-day funding.

Note that the rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.