Navy Federal Personal Loan Review: A Smart Choice for Members?

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Business Insider’s personal finance team compared Navy Federal Credit Union personal loans to the best personal loan companies and found it to a standard offering.

Navy Federal Credit Union (NFCU) is a credit union that serves the military community and their families. It offers various financial products, including personal loans. It offers competitive rates, low fees, and flexible terms, primarily catering to active duty, retired, and former military personnel and their families.

It offers an impressive range of loan amounts, especially for borrowers who only need a small sum of cash. However, there are stringent membership requirements that make the credit union inaccessible to some borrowers. The best personal loan for you depends on your credit score, which will determine what you qualify for and can lower your rate.

This review will cover rates, terms, benefits, and drawbacks to help readers make an informed decision.

NFCU Personal Loan Rates and Terms

Loan Amounts and Terms

NFCU offers loan amounts ranging from $250 to $50,000, with loan terms of 12-60 months. However, in the case of home improvement loans, terms can reach up to 180 months.

Navy Federal Credit Union offers an impressive range of loan amounts, especially for borrowers who only need a small sum of cash. However, there are stringent membership requirements that make the credit union inaccessible to some borrowers. For example, if you’re not a military member or the family of a military member, you likely won’t be eligible.

Rates and Fees

The current APR range as of September 2024 is 8.99%—18.00% variable APR, and the rate you receive is based on creditworthiness, loan purpose, and other factors. You won’t encounter any origination fees or prepayment penalties with NFCU personal loans, but you can expect a $29 late payment fee per each missed or late payment.

Navy Federal Personal Loan Pros and Cons

Advantages

• Wide range of loan amounts. You can take out as little as $250 or as much as $50,000.
• No origination fees or prepayment penalties. Other lenders may charge these fees. 
• You can apply with a co-borrower. A co-borrower can help you get a better rate on your loan if they have a good credit score.
• 24/7 customer service over the phone. You can speak to someone around the clock, whenever you need.
• Competitive interest rates. Particularly attractive for borrowers with good to excellent credit.
• Flexible terms. Can accommodate various borrowing needs with different loan sizes and repayment periods.
• Debt consolidation options. It can help consolidate high-interest debt into a single, more manageable loan.
• Share secured Loans. Members can use their savings as collateral for even lower interest rates.
• Personalized service. NFCU is known for its focus on member service and personalized assistance.

Drawbacks

• You have to be a member to get your loan. It’s relatively hard to qualify for Navy Federal membership. You’re only eligible if you are active military member, veteran, employee or retiree of the Department of Defense, or family member of someone in one of those groups. 
• Late fee. The credit union charges a $29 late payment fee. 
• High minimum APR. If you have a great credit score, you can likely get a better rate elsewhere.
• Limited membership. Only available to individuals who meet specific eligibility requirements related to military service or affiliation.

Who is an NFCU Personal Loan Best For? 

Unlike other credit unions, you need to be a member of Navy Federal to apply for and receive a personal loan. You’re only eligible if you are active military member or a veteran, as well as an employee or retiree of the Department of Defense. Family members of any of the aforementioned groups are also eligible. 

You can get a personal loan from Navy Federal in all 50 states. Navy Federal allows you to apply with co-borrower, which may help you get a better rate if your co-borrower has a great credit score. You can fill out your application online and get your rate within several minutes. If you’re looking for a debt consolidation loan or home improvement loan, you’ll have to apply over the phone or in person.

Navy Federal Personal Loan Credit Requirements

Navy Federal doesn’t make its minimum credit score to be eligible for a personal loan public — though in general, a higher credit score will secure you a lower rate.

Unfortunately, you can’t apply for a loan with Navy Federal without the credit union generating a hard credit inquiry. A hard inquiry gives a lender a complete view of your credit history, but might negatively affect your credit score. Other lenders allow you to check your rates without impacting your credit score. 

After you accept the loan, your payments (or lack thereof) will show up on your credit report. Consistent payments can help boost your credit score, while late or missing payments may lower your score. 

How to Apply for an NFCU Personal Loan

1. Become a Navy Federal Credit Union Member. You can only take out a loan from Navy Federal Credit union if you’re a member. To become a member, you or a family member must have ties to the armed forces, Department of Defense, or National Guard.

2. Decide which method to use to apply. Navy Federal Credit Union allows you to apply for a personal loan online, by phone, or in person. Online applications are typically the fastest.

3. Submit your information and apply. You’ll enter your name, Social Security number, income history, proof of income, and other information that Navy Federal will use to determine if you’re qualified for a personal loan.

4. Review the offer and sign off on your loan. Navy Federal will offer a loan with an interest rate and term based on your creditworthiness if you qualify. Be sure to carefully review the offer and make sure you’re able to afford the payments before agreeing to it.

5.  Receive your funds. Navy Federal Credit union says in most cases you can get your money the same day you’re approved for a personal loan.

Navy Federal Personal Loan Alternatives

Navy Federal Personal Loans  vs. PenFed Personal Loans

With a range of 8.99% to 18.00%, offers a minimum loan amount than what you can get with PenFed, which as a range of 8.99% to 17.99%. Navy Federal’s APR range of 8.99% to 18.00% is comparable to PenFed’s range of 8.99% to 17.99%. 

Navy Federal has more strict membership requirements than PenFed, as you only qualify if you or a family me ber are an active military member, veteran, or employee or retiree of the Department of Defense. You can join PenFed if you’ve served in the military or worked at a qualifying association or organization. You can also join by opening a savings account with a $5 minimum deposit.

PenFed Personal Loan Review

Navy Federal Personal Loans vs. Alliant Personal Loans

Alliant advertises APR range that starts at 10.49%, higher than Navy Federal’s lowest rate. Alliant doesn’t disclose a maximum interest rate for its personal loans. You can borrow anywhere from $1,000 to $50,000 from Alliant, compared with loan amounts ranging from $250 to $50,000 at Navy Federal.

Becoming a member of Alliant is relatively easy. You can so so by making a donation to Foster Care to Success. That compares with much stricter membership requirements for Navy Federal.

Alliant Personal Loan Review

NFCU Customer Experience

Is NFCU Trustworthy?

Navy Federal’s Better Business Bureau profile is currently not rated as the credit union is in the process of responding to previously closed complaints. Previously, the business had an A+ trustworthiness rating from the BBB. The BBB measures its trustworthiness score by looking at how a company’s responds to customer complaints, its honesty in advertising, and its transparency about business practices. 

There is one recent controversy related to the credit union. A Navy Federal employee alleged that the lender pressured mortgage underwriters to approve loans even without proper reason to believe applicants could pay back the loans. She then filed a lawsuit and said Navy Federal retaliated against her whistleblowing by changing her job duties. She dropped the case in late 2020.

You might prefer a different lender if you’re bothered by Navy Federal’s recent controversy and lack of trustworthiness rating. 

Navy Federal Personal Loan FAQs

Why You Should Trust Us: How We Rated NFCU Personal Loans

All personal loan products in our reviews and guides are rated on a 1-5 scale. The overall rating weighs the average of seven different categories, judging some more heavily than others. These categories are:

• Interest rate (20% of rating)
• Fees (20% of rating)
• Term lengths and loan amounts (15% of rating)
• Funding speed (15% of rating)
• Borrower accessibility (15% of rating)
• Customer support (7.5% of rating)
• Ethics (7.5% of rating)

Each category’s weighting is based on its importance to your borrowing experience. For most lenders, the interest rate and fees will be the most important factors.