Navy Federal Personal Loan Review

Pros of Navy Federal

• Low-interest rate: Navy Federal Credit Union’s highest annual percentage rate (APR) of 18.00% is significantly lower than those of many other personal loan lenders. That’s because credit union APRs are capped at 18.00%. Some lenders that approve borrowers with poor credit have interest rates that go as high as 35.99%—nearly double that of Navy Federal.
• Small loans available: Personal loans start at just $250, which is lower than all other major personal loan lenders. If you don’t need to borrow much, a Navy Federal personal loan is a great alternative to payday loans, which usually have high fees on small loan amounts.
• No origination or prepayment fees: Navy Federal isn’t the only personal loan lender to skip these fees, but it’s a definite perk—especially when considered along with the lower interest rates.

Cons of Navy Federal

• Must meet membership eligibility criteria to apply: To get a loan, you need to be a member of the Navy Federal Credit Union. And to join, you or a family member need to be a member of the armed forces or a related department. This requirement might prevent many potential borrowers from applying for a Navy Federal personal loan.
• No prequalification option: A prequalification option lets you see if you’re eligible for a personal loan without hurting your credit score. However, Navy Federal doesn’t offer that option, which means your credit score may drop after you apply due to the hard credit pull. If you don’t have strong enough credit to all but guarantee a loan, this factor might keep you from deciding to apply.
• Interest rates increase for longer-term loans: If you take out a loan for up to 36 months, the lowest APR is 7.49%. For loans of 37 to 60 months, the lowest possible rate jumps to 14.79%. The increase for the lowest rate on longer loans isn’t nearly as steep with some other lenders, such as Lightstream.
• High late-payment fee: The $29 fee is almost twice as much as you’d pay for some of the top lenders that charge late fees on personal loans. Typical late fees tend to be around $15, and some lenders, like SoFi and Marcus, don’t charge any at all.

Navy Federal Personal Loan Rates & Terms

The credit union offers the same rates no matter what you use the loan for. The rates vary, though, based on the length of repayment:

• Personal, debt consolidation, and home improvement loans from six to 36 months: 7.49% to 18.00% APR
• Personal, debt consolidation, and home improvement loans from 37 to 60 months: 14.79% to 18.00% APR
• Home improvement loans from 61 to 180 months: 15.29% to 18.00% APR

Your interest rate is based on your creditworthiness, but Navy Federal Credit Union doesn’t list a minimum credit score requirement.

How Much Can You Borrow With Navy Federal?

For personal expenses and debt consolidation loans, you can borrow from $250 to $50,000, with repayment terms of up to five years.

There’s a $25,000 minimum for home improvement loans with repayment between 61 and 84 months. If you’re looking for an even longer repayment period, there’s a $30,000 minimum for home improvement loans between 85 and 180 months.

Navy Federal Personal Loan Fees

Navy Federal Credit Union doesn’t charge origination or prepayment fees. However, you’ll pay a $29 fee if your payment is returned or you pay it late.

How to Get a Personal Loan From Navy Federal

If you’re already a member, you can apply by logging into your Navy Federal account. There’s no prequalification option, so when you apply, your credit score may drop slightly because the credit union will do a hard inquiry to assess your creditworthiness.

If you’re not a member yet but meet the eligibility criteria, you’ll need to become a member first.

Methodology

We look at 40 data points from dozens of financial institutions to evaluate lenders for our personal loan reviews. Because a loan’s APR can dramatically impact the total cost you pay, we weight that features the heaviest. But since a great APR usually requires at least a good credit score, we also give points to lenders who may have a higher potential APR but offer loans to people with less-than-perfect credit scores.

Along those lines, we favor lenders who allow you to see if you prequalify before applying for a loan, so you won’t harm your credit score just by applying. Origination, prepayment, and late fees all get counted in our assessment. And lastly, we deduct points from the ratings of lenders with restricted access—for instance, those who require you to first have another type of account with them or to join a nonprofit organization.  

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