What you need to know about Navy Federal Credit Union’s $250 – $50,000 personal loans
I’m going to walk you through everything you need to know about Navy Federal Credit Union’s personal loans, so you can decide whether you want to use them to consolidate debt, make a big purchase, or cover a monthly shortfall. We have spent years in the lending industry and track dozens of lenders. We are going to bring that experience to help you make the decisions that would be best for your personal finances.
Navy Federal Credit Union (NFCU) is the largest credit union in the world, with over 13 million members and nearly $168 billion in assets. They offer the full range of financial services, including checking and savings accounts, credit cards, auto loans, student loans, mortgages, personal loans and more.
Unlike banks, credit unions are member-owned non-profits.
That means that their incentive is to return value back to their members through lower fees, lower interest rates on loans, and higher interest on savings. But, you must be a member in order to be able to apply for a loan with them. Membership is restricted to people with a connection to the US military.
- Active duty, retired, or veteran of any branch of the U.S. Armed Forces
- Department of Defense employee or contractor
- Reservist
- Immediate family member of any of the above
In short, if you aren’t affiliated with the military or DoD, you probably aren’t eligible.
Let’s look the loan amounts that they offer.
Navy Federal offers micro loans to its members. The lowest amount they offer is $250. That is extremely unusual. Very few banks or credit unions are willing to lend such small amounts because it is hard to make their money back on them. If you are looking for a substantial amount of money, Navy Federal will lend up to $50,000, which is a pretty standard top rate for personal loans. There are some that will lend more, but not many.
Navy Federal’s loans have terms that go up to 5 years. That is a pretty standard term for personal loans. But Navy Federal does not charge prepayment penalities, so there is no reason not to pay the loan off early. If you make extra payments in the first year of the loan, you will save a lot of money on interest and get out of debt much faster.
Navy Federal’s bottom APR rate is 8.99% and their maximum APR is 18%.
While there are a handful of companies that boast a lower bottom rate, there aren’t many that have a lower top rate. That means that if you can get approved, you have a good chance of receiving a decent APR.
Navy Federal does not charge an origination fee on their loans. That’s great. It means that the full cost of borrowing is wrapped up in their interest rate. Since origination fees come out of the proceeds of the loan, you get the full amount of your loan when you borrow from Navy Federal.
Navy Federal targets people who have Good-to-Excellent credit. I believe you might struggle to get approved if your credit score is not 660 or better. But, they also take their mission to serve people associated with the military seriously. It is very possible that you could be approved if you are a long-time customer in good standing, even if your credit history is not pristine.
The other thing to keep in mind is that they are likely to use more than just credit score to determine who to approve for a loan. They may look at your membership standing, your debt-to-income ratio, your payment history, the type and amount of your income, and other financial information.
If you think you could struggle to get approved, Navy Federal will accept cosigners on their loans. A cosigner is someone who agrees to repay the loan if you fail to. A cosigner is really only likely to help you out if they have a stronger credit profile than you do. If you can get the loan that you need on your own, don’t include a cosigner. There’s no reason to entangle a loved one in the process.
Navy Federal offers unsecured loans, but they also offer secured loans.
They can secure your loan using a savings account or a certificate of deposit. As you pay off the loan, the savings will become available to you. The benefit to this approach is that you can get a lower interest rate and you can preserve your savings. Of course, even that loan would be more expensive than just using your savings for the emergency. But, some people just can’t bring themselves to touch their savings.
If you want to use the loan to consolidate other debt, Navy Federal will not pay off your other creditors with the proceeds of the loan for you. That’s too bad. Companies that do that show that they understand that the new loan will replace your other debts, and not just stack on top of them. That means that the new loan won’t make your debt-to-income ratio worse, making it easier to be approved.
If you are late on your payment, Navy Federal will charge a late fee of either $30 or 5% of the late amount, whichever is greater. $30 is one of the higher late fees for personal loans out there, so you will want to stay on top of things. Also, you should be aware that if you are late on your payment, they might attempt to take the payment from any Navy Federal account that you own.
What are Navy Federal personal loans good for? As a personal loan, Navy Federal does not put any restrictions on how you can use the funds. Some of the common uses of their loans, though, include:
- Auto repairs
- Moving
- Vacations
- Major purchases
- Home improvement projects
- Debt consolidation
- Financial emergencies
- And costs associated with starting a military career like paying for uniforms, set up a household, cover other expenses, or clean up previous debt.
Okay, let’s summarize the personal loans from Navy Federal Credit Union.
Navy Federal is one of the few lenders that will offer a small amount of money for people who just need to get over a small financial speedbump. But, they also offer very substantial loans. They have very competitive APRs and do not charge an origination fee on their loans. You can probably expect them to be fairly restrictive about who they lend to, but might make exceptions for small amounts of money or long-time customers. They accept cosigners and have fairly unusual secured loan options.
All-in-all, I think Navy Federal is probably a great place to go for a personal loan. But it is always a good ideas to shop around before you accept a loan offer. Each lender will have a different criteria for approving you. You owe it to yourself to get the best deal 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 our featured lenders. Behind the scenes, we will check your rate with up to forty other lenders. Our partners use a soft credit check, so applying won’t hurt your credit score. We will show you all of the approved offers so you can pick the loan that is best for you.
If you have experience with Navy Federal Credit Union, leave a comment so others can benefit from you. If you found this information helpful, please like this video and subscribe to our channel. It really helps us out. Thanks for watching.
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