Key Takeaways
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PenFed has some of the lowest rates on the market.
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SoFi offers flexible lending terms with no membership requirement.
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Prequalify with both lenders to see which works best for you.
PenFed and SoFi are two highly rated lenders that offer personal loans at competitive rates. The main difference between the two is cost and speed. SoFi may get you funded a little faster, but PenFed has a significantly lower maximum APR.
Since you can prequalify with either lender, compare your rates with both to see which is best for your finances.
PenFed vs. SoFi at a glance
PenFed and SoFi offer competitive starting rates. But some key differences – such as loan amounts, maximum advertised rates and repayment terms – may be more important to your borrowing experience.
Pen Fed | SoFi | |
---|---|---|
Bank rate score | 4.7 | 4.8 |
Better for |
|
|
Loan amounts | $600 – $50,000 | $5,000 – $100,000 |
APRs | 8.99%-17.99% | 8.99%-29.49% (with automatic payment) |
Length of the loan | Up to 5 years | 2 – 7 years |
Costs | $29 late fee (5 day grace period) | Optional costs |
Minimum credit score | 700 | 680 |
Time for financing | 1-2 business days | As fast as the same business day |
Personal loans from PenFed
Best for low maximum APR.
Bankrate’s opinion
PenFed offers smaller loans ranging from $600 to $50,000. Both the minimum and maximum rates are lower than SoFi’s annual percentage rates (APRs) – and it’s rare for a maximum APR to be as low as 17.99 percent. To qualify, you must become a member, which requires you to deposit $5 into a PenFed savings account.
Plus points
- Competitive APR range.
- No origination fees.
- Assistance with financial problems available.
Disadvantages
- Membership required.
- Less flexible lending conditions.
- Longer financing time.
Personal loans from SoFi
Best for long refund terms
Bankrate’s opinion
SoFi has much more flexible terms and conditions than PenFed. You can borrow more – up to €100,000 – and there are a wide range of repayment terms. Additionally, no origination fees are required, although you can choose to pay an origination fee in exchange for a lower APR. There are also member benefits, including access to rewards, discounts and members-only events.
Plus points
- Same day financing.
- Flexible refund terms.
- Member benefits.
Disadvantages
- Optional origination fees.
- Less competitive interest rates.
- High minimum loan amount.
How to Choose Between PenFed and SoFi
PenFed and SoFi are solid options for borrowers looking for competitive rates and for those looking to apply with a co-borrower. Because each lender offers a prequalification process, you can check your rate with both to see which is the best choice for your needs.
APR range
PenFed is the clear winner when it comes to APR. Like most federal credit unions, PenFed caps its rates at 17.99 percent. SoFi’s rates start higher and go up to 29.49 percent — and if you don’t choose autopay, that APR could be higher.
Minimum credit score
SoFi has a slightly lower minimum credit score of 680 versus PenFed’s minimum of 700. Ultimately, there isn’t much difference between the two. Both require good credit to qualify. And to get the lowest rates, you’ll likely need excellent credit.
Refund Terms
SoFi is more flexible than PenFed. The term of your loan can be up to 84 months, but this is not necessarily positive. A longer term means lower monthly costs, but you pay more interest over the life of the loan.
However, you are not obliged to take out a loan for 84 months. You can always opt for a shorter term, and SoFi’s flexible loan terms may make it easier to find an option that fits your budget.
Time to receive money
Both lenders offer underwriting fast enough to serve as emergency lenders. SoFi can fund some loans as early as the same day, provided you complete your application before 7:00 PM ET on a business day. PenFed is slightly slower, with a turnaround time of one to two business days.
For most people, this probably won’t be a significant difference. Just because SoFi can fund a little faster doesn’t mean it will. In addition, your bank still needs time to process the deposit.
Costs
PenFed does not charge fees, such as origination fees, to finance your loan. However, you may be charged late fees or refund fees if you miss a payment.
SoFi charges an optional origination fee. If you choose to pay one, it can lower your interest rate. The exact origination fee you’ll pay isn’t clear, nor is the amount by which your interest rate will be reduced. Still, it may be worth considering, especially since SoFi has no other fees, including late fees.
The bottom line is: which lender is the best?
PenFed and SoFi are both solid options. SoFi offers larger, more flexible loan terms, while PenFed is a better choice if you want to get a smaller loan at more competitive rates.
Compare lenders before applying
Because you can pre-qualify without affecting your credit, it’s a good idea to compare personal rates with these and other lenders before submitting a formal application.
LightStream
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PNC Bank
best for small, short-term personal loans