Navy Federal Personal Loan Review

Navy Federal Credit Union began in 1933 and now has more than 9 million members. To join, you or one of your family members has to meet a set of service-related criteria for membership. In addition to personal loans, the credit union offers checking and savings accounts, credit cards, mortgages, auto loans, student loans, and more.

Who Is a Navy Federal Personal Loan Best For?

Navy Federal Credit Union personal loans will appeal most to those who qualify for membership. If you’re not already a member, you can join if you are one of the following: 

• Active duty, retired or veteran of the Army, Navy, Air Force, Marines Corps, Coast Guard, Air National Guard, and Space Force
• In the Delayed Entry Program
• Department of Defense officer candidate
• ROTC candidate
• Department of defense reservist
• Retiree or annuitant

If you don’t qualify through your own service, you can use a relative who meets the criteria to qualify. Spouses, parents, grandparents, children, siblings, grandchildren, and other household members are eligible.

If you do qualify for membership or are already a member of the credit union, then a Navy Federal personal loan might the right fit if you:

• Need a small loan
• Want to pay back your loan in as little as six months
• Need the funds quickly
• Want to make home improvements and take up to 15 years to repay the loan

Pros Explained

• Low interest rate: Navy Federal Credit Union’s highest interest rate of 18.00% is significantly lower than the average high annual percentage rate (APR) for personal loan lenders. Some personal loan 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 major personal loan lenders. If you don’t need to borrow much, this is a great alternative to payday loans, which usually have high fees on small loan amounts. 
• Fast funding: If you apply and get approved for a loan, you could see funding to your account within a day.

Cons Explained

• 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 that the application will trigger.
• Only credit union members are eligible: You can’t get a loan if you’re not a member of Navy Federal. And, you can only join if you or a family member qualifies by being a member of the armed services or a related department.
• Interest rates increase for longer-term loans: If you take out a loan for up to 36 months, the low APR is 7.49%. For loans of 37 months and longer, the lowest possible rate jumps to 14.79% or 15.29%. The increase for the lowest rate on longer loans isn’t nearly as steep for 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. Typical late fees tend to be around $15, and some lenders, like SoFi, 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.

The Bottom Line

Navy Federal Credit Union’s personal loans have excellent interest rates on the low and high end compared to some other lenders. The rates could help borrowers with good or bad credit scores, who might normally go elsewhere for a personal loan, save money. And for borrowers who only need a small amount of money, and want to pay it back quickly, Navy Federal is a good option compared to payday loans.

However, membership could be a big hurdle for potential borrowers. If you don’t qualify for membership through your own military service or the service of a relative, you can’t access Navy Federal personal loans. You may want to look at other credit unions—even those that require membership—to take advantage of similar low interest rates. But if you need a personal loan right away, consider applying with a lender that doesn’t have a membership requirement.