Penfed Auto Loan

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Penfed Auto Loan

Postby Cappy361 » Sun Jul 15, 2012 1:29 pm

How hard is it to get a loan from them?

Is there any specific requirements? ie high credit score and income
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Re: Penfed Auto Loan

Postby Tyrobi » Sun Jul 15, 2012 4:27 pm

It's very straightforward. The process is all online and via email. Immediately, they approved the 1.99% loan for 5 years. The total fee is $0.

I own the vehicle outright so PenFed sent me the check to my home in one week. I used it to pay other higher-interest loan, ie. mortgage.

(My credit score is around 780.)
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Re: Penfed Auto Loan

Postby ElJay » Sun Jul 15, 2012 7:33 pm

I think their underwriting standards are generally higher than most other institutions.

I can only give an anecdotal report from when I got an auto loan from them earlier this year. I was an existing customer and my credit score is >800. I went online to complete the application and was instantly approved to refinance my existing auto loan. They mailed me a payoff check which I sent to my existing lender.

It was easier than opening a credit card with them a few years ago, where they required income verification via paystubs. :annoyed
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Re: Penfed Auto Loan

Postby aubpri » Sun Jul 15, 2012 11:08 pm

Tyrobi wrote:It's very straightforward. The process is all online and via email. Immediately, they approved the 1.99% loan for 5 years. The total fee is $0.

I own the vehicle outright so PenFed sent me the check to my home in one week. I used it to pay other higher-interest loan, ie. mortgage.

(My credit score is around 780.)


Great idea, I didn't even think about that possibility. I own my vehicle outright as well and am interested in doing the same. Did you just request the maximum amount possible? Did you have to provide an explanation?

I crunched the numbers in the estimated worth of my vehicle compared to my mortgage rate and it would be a $500 savings over the life of the loan. Nothing huge but I'd rather keep that in my pocket than give it to my mortgage provider.
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Re: Penfed Auto Loan

Postby grabiner » Sun Jul 15, 2012 11:53 pm

ElJay wrote:I think their underwriting standards are generally higher than most other institutions.


While it's not direct evidence, Credit Karma tends to confirm this. The average TransRisk score for acceptance for the PenFed credit card is 747 (top 23%), the highest of any credit card for which Credit Karma tracks statistics.

This may also be a matter of cause and effect; a lot of members of PenFed are DoD civilians and military, and they are probably more likely to have good credit scores.
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Re: Penfed Auto Loan

Postby fincheckup » Mon Jul 16, 2012 12:39 am

Tyrobi wrote:I own the vehicle outright so PenFed sent me the check to my home in one week. I used it to pay other higher-interest loan, ie. mortgage.


So you are able to take out the loan and use it for something else? For instance, I own my car, but it really isn't worth that much. Would I be able to take out a PenFed loan and use it to pay off one of my student loans? My student loan is at 6.17%, so I think this would save me some money in interest, even though the interest on the student loan is tax deductible.
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Re: Penfed Auto Loan

Postby Tyrobi » Mon Jul 16, 2012 8:21 am

aubpri wrote:
Tyrobi wrote:It's very straightforward. The process is all online and via email. Immediately, they approved the 1.99% loan for 5 years. The total fee is $0.

I own the vehicle outright so PenFed sent me the check to my home in one week. I used it to pay other higher-interest loan, ie. mortgage.

(My credit score is around 780.)


Great idea, I didn't even think about that possibility. I own my vehicle outright as well and am interested in doing the same. Did you just request the maximum amount possible? Did you have to provide an explanation?



No, I didn't request the maximum. I put in $15,000 but PenFed asked me if I want a check for $26,500. I checked on Kelly Blue Book Value online and my vehicle is only worth between $17,363 to $20,413. It seems like PenFed is very generous to let me have the money with 1.99% for 5 years. After the discussion with my wife, we ended up taking less than the maximum amount.

I did not provide any explanation. They mailed me the check, and I mailed them my title. Fair and square.

(Before I mailed out the title to PenFed, I held that piece of paper in front of my wife and told her that this paper is worth as much as $26,500. She would careless whether it's worth $0 or not. :? )
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Re: Penfed Auto Loan

Postby Tyrobi » Mon Jul 16, 2012 8:33 am

fincheckup wrote:
Tyrobi wrote:I own the vehicle outright so PenFed sent me the check to my home in one week. I used it to pay other higher-interest loan, ie. mortgage.


So you are able to take out the loan and use it for something else? For instance, I own my car, but it really isn't worth that much. Would I be able to take out a PenFed loan and use it to pay off one of my student loans? My student loan is at 6.17%, so I think this would save me some money in interest, even though the interest on the student loan is tax deductible.


Yes, you can.

I've two vehicles (both Toyota) and own both of them free and clear. Since I work oversea a lot, we only use one vehicle while the other vehicle just parks in the garage. We were thinking of selling it, but I love this 2007 FJ Cruiser so I decided against selling it. In the end, we converted the vehicle's title into cash and use the cash as if we just sold the vehicle to pay higher-interest loan and be mortgage-free.

(Btw, if you own your vehicle outright it's another alternative emergency fund when you need the cash within a week while still keep your vehicle.)
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Re: Penfed Auto Loan

Postby fincheckup » Mon Jul 16, 2012 12:03 pm

Tyrobi wrote:
fincheckup wrote:
Tyrobi wrote:I own the vehicle outright so PenFed sent me the check to my home in one week. I used it to pay other higher-interest loan, ie. mortgage.


So you are able to take out the loan and use it for something else? For instance, I own my car, but it really isn't worth that much. Would I be able to take out a PenFed loan and use it to pay off one of my student loans? My student loan is at 6.17%, so I think this would save me some money in interest, even though the interest on the student loan is tax deductible.


Yes, you can.

I've two vehicles (both Toyota) and own both of them free and clear. Since I work oversea a lot, we only use one vehicle while the other vehicle just parks in the garage. We were thinking of selling it, but I love this 2007 FJ Cruiser so I decided against selling it. In the end, we converted the vehicle's title into cash and use the cash as if we just sold the vehicle to pay higher-interest loan and be mortgage-free.

(Btw, if you own your vehicle outright it's another alternative emergency fund when you need the cash within a week while still keep your vehicle.)


Ah I see - I can take out the loan and say it is for a used vehicle. Can I take the loan out for a lot more than the vehicle is worth? For instance, if my car is worth about $4K, can I take the loan out for $8K?
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Re: Penfed Auto Loan

Postby Tyrobi » Mon Jul 16, 2012 12:39 pm

fincheckup wrote:Ah I see - I can take out the loan and say it is for a used vehicle. Can I take the loan out for a lot more than the vehicle is worth? For instance, if my car is worth about $4K, can I take the loan out for $8K?


PenFed uses NADA to appraise your car. You can call to ask the max value after your auto loan is approved.
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Re: Penfed Auto Loan

Postby PreemieNurse » Sat Nov 10, 2012 12:16 pm

Does anyone know if Navy Federal CU does this too? I own a car outright that still has fairly high market value, and this sounds like a good way to pay off some high interest credit card debt faster.
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Re: Penfed Auto Loan

Postby dm200 » Sat Nov 10, 2012 1:31 pm

PreemieNurse wrote:Does anyone know if Navy Federal CU does this too? I own a car outright that still has fairly high market value, and this sounds like a good way to pay off some high interest credit card debt faster.


Getting a (lower interest) auto loan pledging the vehicle you already own free and clear is very common with credit unions. I would be 99.999% sure Navy federal would do this kind of loan.
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Re: Penfed Auto Loan

Postby FoolStreet » Sat Nov 10, 2012 5:17 pm

I have a lease on a 2010 Prius coming off lease in April and was thinking about getting a payment saver loan from Penfed. 1.75% and it would drop my payment from $243 to about 170-180ish. After 5 years, I'd have $7k due as a lump sum. From my perspective, this is a great way to keep cash in my efund now (I could certainly pay cash easily but would really prefer the liquidity), and free up cash on a monthly basis. Besides, I'll have some mileage reimbursements, so it will really ease my monthly cash flow.

This type of loan appears to be available only for relatively new used cars. 2010-12.

My question is: Should I just go ahead and lock it in now, or wait until the lease is over in April '13. Coming into calendar year, '13, will the '10 Prius all of a sudden be too old for the program and lose eligibility? Any other thoughts?
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Re: Penfed Auto Loan

Postby 29palms » Tue Nov 13, 2012 12:23 am

I just got a loan for 10k from Penfed. First time I borrowed from them. I normally have used Navy Federal for car loans in the past, because one phone call and no problem, they've always cut me a check. I tried borrowing from Penfed, some years back but seemed to have run into a wall. Didn't hear anything back and when I called, I didn't get a flat out denial, but the lady on the phone seemed reluctant to loan me the money, so I didn't push the issue further, and borrowed it from Navy Federal, no problems there. I was thinking that maybe I didn't have enough rapport with Penfed, and wasn't a member long enough, nor did I bank with them, but rather, only had an account opened up recently with around 75 bucks. My credit score is like 810 right now, back then, probably around the same.
I was even thinking of shutting down that account, since it was really doing nothing constructive for me, but decided to hang on to them for possible another car loan some day. That day came, and this time, I had no problem getting a loan. I took advantage of the Enterprise Car Sales promotion that they have until the end of this month, which is if you buy an enterprise car, you can get financed for 48 months at zero percent interest. Can't beat that with a stick.
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Re: Penfed Auto Loan

Postby PreemieNurse » Mon Dec 17, 2012 10:12 am

How do you apply for this type of loan? Do you apply as if you are purchasing a used car, they send you the check to purchase it, and instead of purchasing it you send them the title and cash the check?

I bank with NFCU so I called them, and when I asked about used car loans like this, they said it would be considered a collateral loan not a car loan, with an APR of 9%. I want to apply for this, but want to make sure I am doing it correctly.
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Re: Penfed Auto Loan

Postby midareff » Mon Dec 17, 2012 10:22 am

First, you have to be a member of PenFed. That's easy even if you do not have a military background. Online at their site you join a friends of the military organization for a minimum of $15 and place $5 in a deposit account. You can do this by credit card and it just takes a minute or two. I was surprised at how easy it was. After I negotiated with the dealer for my car I entered the information in their application site and was approved instantly. I ordered the car and PenFed sent me a draft to pay the dealer the balance after my order deposit ... 1.49% for 60 months. It just did not make sense to write the check and drop my cash liquidity.
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Re: Penfed Auto Loan

Postby PreemieNurse » Mon Dec 17, 2012 10:30 am

Thanks midareff. I am talking about obtaining a car loan for a vehicle which you already own outright, and using the funds for other things. I would appreciate if other people who have done that can tell me exactly how it works.
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Re: Penfed Auto Loan

Postby Tyrobi » Mon Dec 17, 2012 11:12 am

PreemieNurse wrote:Thanks midareff. I am talking about obtaining a car loan for a vehicle which you already own outright, and using the funds for other things. I would appreciate if other people who have done that can tell me exactly how it works.


First, be a member as midareff mentioned above. Second, go online to PenFed site and apply it as refinance auto loan 1.49% APR for 60 months to convert a piece of paper (title) from vehicles that you own outright into cash.

I did it twice already with both of my vehicles that I own outright. The first time was when I tried to pay off my entire mortgage with an auto loan rate of 1.99%. The second time was when I converted my second vehicle to pay off first vehicle's loan when the rate was reduced to 1.49%. It doesn't save much with 0.5% reduction but worth the effort.

GL.
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Re: Penfed Auto Loan

Postby PreemieNurse » Mon Dec 17, 2012 1:55 pm

Thanks! I signed up and once I started the refinance application process, I saw that it was very clear-cut. It has a specific option for owning the car outright and just wanting to borrow against it. Joining the CU and completing the application took about 10 minutes. It went to manual underwriting, which I expected anyway since I have a complex credit history (some past blemishes due to my ex, but no lates ever and a decent score in the 700s). If this works, I'll consider switching over my other car loan since you can't beat 1.49% APR.
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Re: Penfed Auto Loan

Postby boglegirl » Mon Dec 17, 2012 3:01 pm

PreemieNurse wrote:...
I bank with NFCU so I called them, and when I asked about used car loans like this, they said it would be considered a collateral loan not a car loan, with an APR of 9%. I want to apply for this, but want to make sure I am doing it correctly.


I just tried this with Navy FCU also and was told the same thing. :(

I know we did this with them 10 years ago - they advertised it as "second chance financing". The employee I talked to on the phone today had no idea what I was talking about and said my only option was a collateral loan.
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Re: Penfed Auto Loan

Postby PreemieNurse » Tue Dec 18, 2012 9:59 am

I'm disappointed that NFCU doesn't offer it, because I like to keep all my accounts together to simplify things. If you want this type of loan though, try PenFed. It was very easy and it was conditionally approved within a few hours of applying. Today I'm faxing over a copy of my car title.
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Re: Penfed Auto Loan

Postby PreemieNurse » Fri Dec 21, 2012 1:17 pm

Here is my update, for others who are considering applying. I faxed over my title and since it's been a few days, I called to check on the status. After waiting on hold for a while, they said it was approved and check is in the mail! Well worth the effort of the online application and faxing over the title. I am going to switch over my other vehicle loan to them too.

I cannot thank you guys enough for this suggestion. You've helped me in more ways than you will know :)
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Re: Penfed Auto Loan

Postby G12 » Fri Dec 21, 2012 3:22 pm

I had a very good experience with PenFed two weeks ago. My wife's existing car had a lot of recent mechanical issues and had hit 130k miles, she needs a reliable car as she does home healthcare. Went into a dealership that sold the car I knew she was excited about, got the new 2012 model for $3200 below invoice and then gave back $975 to have leather, not plexi-leather, installed as I knew she wouldn't like the existing cloth material and the dealer had no stock with leather. I was going to pay cash and said I will call PenFed while at the dealership, PenFed approved the loan in less than 5 minutes for 1.49% rate, mailed me a loan document and proceeds check and a few days later I dropped the endorsed check off at the dealership, all was good. I was told if I had used the car buying service through PenFed the rate would have been .49%, but don't know if I would have gotten as good of a deal upfront. Wife is happy and loves her car, that is what is really important.
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