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Using Navy Federal Credit Union for Credit Card Debt Consolidation

Welcome to The Yukon Project. We’ve analyzed millions of credit reports, hundreds of thousands of people’s financial data, and designed programs to help people improve their financial lives. We’re here to give you the inside perspective on Navy Federal Credit Union’s credit card debt consolidation loans. But, let me tell you the secret up front: there are a lot of good things to say about Navy Federal and only a couple of cons. The first con might not even apply to all of you, so I thought I would mention that one up front. If you can’t get over that con, you can move on with your life and skip the rest of this video because you will not be eligible for a Navy Federal loan. 

Are you even eligible for a Credit Card Debt Consolidation Loan From Navy Federal Credit Union?

Perhaps the biggest problem with Navy Federal is that you might not be able to use them. You see, they will only lend money to people who are members of their credit union and you can only be a member of the credit union if you are a member of the armed forces, a veteran, or if you work for the Department of Defense, as an employee or a contractor. You can also qualify if you are a parent, grandparent, spouse, sibling, child, grandchild, or even household member of one of someone who serves or served in the military or Department of Defense. If you don’t fall into any of those categories, you’re not eligible, regardless of how good your credit score is. 

Shop for the best loan

But here’s something you should know. Whether you are eligible or not, you owe it to yourself to shop around. While credit unions often offer the best rates on things like credit card consolidation loans, there’s no guarantee that you will be approved by them or get their lowest rate. So, you should get 2-3 approvals in hand before you accept a loan. That will give you a good idea of whether you are getting the best rate you can.

At The Yukon Project, we’ve tried to make shopping around easy. If you visit our marketplace page, you can apply to any one of the premium lenders and behind the scenes, we will check your rate with up to 40 other lenders. The application uses a soft credit pull and so it won’t affect your credit score. We will show you all the companies that approve you, so you can pick the loan that is best for you. 

So, if you are a Navy Federal Credit Union member, that doesn’t mean that they will approve you for a loan. They have fairly stringent standards for their loans. So, it’s possible you won’t be able to get a loan with them. But, if you can, here are the pros of using Navy Federal Credit Union to consolidate your credit card debt. 

Their APR’s are a big Pro to using Navy Federal Credit Union for credit card consolidation

First off, their loans have APRs from a low of 8.99% and a high of 18%. Eighteen percent is one of the lowest “highs” that I have seen. That’s great news if you can get approved by them. Even better, they do not charge an origination fee. That’s especially good if you plan to pay the loan back early. 

Pros and cons depending on how you look at them

If you are the kind of person who is occasionally late on your payments, you need to know that Navy Federal will either charge a late fee of 5% of the missed due amount or $30, whatever is higher. If you’re late regularly on some of your other obligations, you need to be aware that this could increase the cost of working with Navy Federal.

This next one is both a pro and a con. Navy Federal offers both unsecured and secured loans. Normally, you don’t want to trade unsecured credit card debt for a secured personal loan because it just puts your collateral (usually a motor vehicle) at risk. However, securing your credit card consolidation loan could be a benefit in one of three ways: it could get you approved when you otherwise wouldn’t have, it could get you a lower interest rate, or it could help you qualify for a larger loan than your debt-to-income ratio would have otherwise allowed. 

Another way you could increase your odds of those three things is to add a cosigner to the loan. And Navy Federal will allow you to do that. Of course, a cosigner is someone who can be held responsible to repay the loan if you fail to. So, if you can get the loan that you need without a cosigner, it’s often better not to entangle a loved one in the process. But, a cosigner who has a higher credit score and lower debt-to-income ratio can improve your chances considerably. 

Navy Federal Credit Union can be a great option for you for a Credit Card Debt Consolidation Loan

Navy Federal Credit Union is actually a great option for consolidating your credit card debt, but only if they offer you an interest rate that is at least 2-3 percentage points lower than what you are currently paying on your credit cards. If you can’t get that better interest rate, you’d be better off just paying extra on your credit cards.


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Jonathan Walker