Navy Federal Personal Loan Review | The Motley Fool (2023)

Top perks

Wide-range of personal loan types, amounts, and payment terms
Members can borrow as little as $250 or up to $50,000 for an unsecured personal loan. Home improvement and secured personal loans have longer terms. Repayment terms can range from 36 to 180 months depending on the type and amount of loan. There is a $25,000 minimum loan amount for 61 to 84 months and a $30,000 minimum loan amount for 85 to 180 months.

No origination or prepayment fees
An origination fee is a one-time fee you pay upfront as a cost for processing a loan. The fee can vary depending on the amount of the loan, and lenders will usually deduct it from your loan proceeds. Prepayment fees are what lenders charge if you pay off your loan early. NFCU does not charge these fees.

Same-day funding for most loans
In most cases with Navy Federal, you'll get your money the same day you apply.

Competitive APR and maximum cap
The APR is based on the creditworthiness of the borrower. Members with bad to fair credit will benefit from the maximum cap since some financial institutions charge nearly double NFCU's rate.

What could be improved

Only Navy Federal Credit Union members qualify
Membership is not open to the public. Unlike other credit unions where there are many ways to qualify, membership is limited to those in the military, veterans, family members, and Department of Defense civilian employees and contractors.

No prequalification tools
Many financial institutions allow you to check your interest rate and loan terms by prequalifying online and with a soft credit check. To find out which APR you qualify for, you will have to apply for a Navy Federal personal loan, which will result in a hard credit check. This can potentially lower your credit score.

Maximum loan limit at $50,000
The maximum you can borrow for a Navy Federal personal loan is $50,000. Many lenders offer up to $100,000 in loan amounts.

Late fee of $29
The credit union charges a late fee of $29.

To become eligible for membership, you must be a servicemember in any military branch, a retiree, veteran, or an immediate family member. Department of Defense civilian employees and contractors also qualify for membership.

Navy Federal was started in 1933, after the Great Depression by seven Navy Department employees. Since then, it has grown to include officers and enlisted men and women of all branches of the military, veterans, and DoD employees and their family members. There are 350 branches worldwide, with more than half located near military installations. It has over 30,000 free ATMs.

A Navy Federal personal loan can be a great way to consolidate debt, finance home improvements, or cover unexpected expenses. Navy Federal offers multiple types of personal loans. As a credit union serving the military and their family members, it typically offers better rates than many banks.

Navy Federal personal loans have no origination or prepayment fees, and in many cases it offers same-day funding. Navy Federal offers different terms depending on the type of personal loan. Here are the loans, features, and the current APR of the Navy Federal personal loans.

Personal expense loan

A personal expense loan can be used for unplanned and planned expenses such as auto repairs, moving and relocating, vacations, and other major purchases. Rates are based on creditworthiness, so your rate may change. Personal loan rates span different rates. A loan amount of $5,000 for 36 months has a payment range from $156 to $183, and finance charges range from $623 to $1,598.

Loan amount: $250 to $50,000

Rates are tiered for the personal expense loan based on different timelines:

• Up to 36 months
• 37 to 60 months

Home improvement loan

A home improvement loan can be used to finance your home improvement or repair projects. Unlike a mortgage loan or a HELOC, there is no collateral required with this loan.

Loan amount: $25,000 minimum loan amount for 61 to 84 months and $30,000 minimum loan amount for 85 to 180 months

Rates are tiered for the home improvement loan based on different timelines:

• Up to 36 months
• 37 to 60 months
• 61 to 180 months

Debt consolidation loan

A debt consolidation loan can be used to simplify your finances by consolidating high-interest debt at a competitive, fixed rate.

Loan amount: $250 to $50,000

Rates are tiered for the debt consolidation loan based on different timelines:

• Up to 36 months
• 37 to 60 months

Savings secured loan

A savings secured loan is a personal loan that is secured by the money in your Navy Federal savings account. You can secure financing without dipping into your savings, and at a lower rate than an unsecured personal loan. Your savings account continues to earn interest and you get access to it as soon as the loan is paid off.

Navy Federal offers extended terms of 61 to 180 months for certain loan purposes, but they're subject to certain loan amount minimums. You can get an extended term loan for home improvements and the purchases of land, airplanes, fully self-contained recreational vehicles, and boats.

The following minimum loan amounts are required for extended term loans:

• $25,000 for loan terms of 61 to 84 months
• $30,000 for loan terms of 85 to 180 months
• Certain loan purposes may require higher minimum loan amounts.

Rates are tiered for the savings secured loan based on different timelines::

• 61 to 180 months
• Up to 60 months

The share rate is the APY of the Navy Federal Share Savings Account.

Certificate secured loan

A certificate secured loan is a personal loan that is secured by your Navy Federal CD. You can borrow 100% of your certificate's principal balance for different terms at a certain APR above the certificate's rate. The loan amount cannot exceed the CD balance and the loan term must be equal to or less than the term of the CD. A certificate secured loan amount of $3,000 at 4.05% APR for 60 months has a payment of $56.

Tiered rates for the certificate secured loan:

• Up to 60 months

Once a member, you can apply for a loan by completing an application online or going into a physical branch. You will need to gather documentation necessary to fill out the application.

Application process

To apply for a Navy Federal personal loan, here is a list of items needed as part of the application process. Navy Federal does not have the option for a pre-approval.

• How much you want to borrow for your loan
• How long you'd like to finance your loan
• Current employment and income
• Your contact information, including phone number and email
• Information about your co-applicant, if applicable

Applications are online and it only takes a few minutes to process your application. After approval, you can electronically sign your application. Your funds will be deposited into your account either the same day or within 24 hours.

One of Navy Federal’s closest competitors is USAA. USAA is another financial institution for active-duty military members, veterans, and their eligible family members. It was founded in 1922 by Army officers and currently has more than 13 million members.

USAA does not offer different types of personal loans like Navy Federal. The only restriction on personal loans with USAA is that they can't be used to pay for higher education expenses. USAA personal loans range from $2,500 up to $100,000. Navy Federal offers personal loans as low as $250. Loan repayment terms for USAA range from 12 months to 84 months. Currently, USAA offers a slightly lower starting interest rate than Navy Federal when the autopay discount is used.