The Navy Federal Credit Union has served military members and their families since 1933. The organization’s vision statement is, “Be the most preferred and trusted financial institution serving the military and their families.”
As part of this mission, Navy Federal partnered with LendKey to make private student loans one of its financial products. Navy Federal members and their families are eligible to apply.
Additionally, for borrowers who already have student loans, Navy Federal also offers refinancing — for both private and federal student loans.
Refinancing your student loans lets you consolidate two or more student loans into one loan with one payment due date, and it can potentially lower your interest and payment amount.
Navy Federal student loans at a glance
How do Navy Federal student loans compare to other private lenders? Take a look at some key facts and figures before you apply:
|Maximum amount||$120,000 (undergrad)|
|Loan terms||10 years|
|Variable interest rate||As low as 3.49%*|
|Fixed interest rate||As low as 5.75%*|
Navy Federal student loan refinance at a glance
|Maximum amount||$125,000 (undergrad)|
|Loan terms||5, 10 and 15 years|
|Variable interest rate||As low as 1.95%*|
|Fixed interest rate||As low as 5.75%*|
*As of July 8, 2020
Navy Federal student loans pros and cons
You have a lot to consider when applying for a private student loan, regardless of the lender. Here are a few things to weigh as you contemplate applying for a Navy Federal student loan:
Pros of getting a Navy Federal student loan
- Cosigner release: You can let your cosigner off of the hook once you make 24 consecutive, on-time, full principal and interest payments. Additional terms apply.
- No origination fee: Navy Federal will not charge you just to process your student loan.
- Flexible payment options: Navy Federal offers multiple in-school payment options, including interest-only or $25-a-month payments.
- Quick application process: You can complete your Navy Federal student loan application in about 15 minutes.
- No prepayment penalties: You can repay your Navy Federal Student loan partially or in full any time without incurring any fees or penalties.
Navy Federal student loan refinancing offers a lot of the same advantages as the credit union’s student loan product. In addition, you have the option to pay your loan off quickly or keep your monthly payments as low as possible.
Loan terms for a refinance are a little more flexible, too. While Navy Federal student loans only offer a 10-year repayment term, the organization’s refinance product offers five-, 10- and 15-year terms. In regard to cosigner release for a refinanced student loan, your cosigner can be absolved of their responsibility after you make 12 consecutive, on-time payments.
Cons of getting a student loan from Navy Federal
- Credit check required: Navy Federal will evaluate your creditworthiness and ability to repay Navy Federal student loans. The credit union will do the same for your cosigner, if applicable.
- Cosigner might be needed: You might need a cosigner if you don’t meet Navy Federal’s credit or income requirements.
- Minimal loan term options: Navy Federal student loans only offer a 10-year student loan.
Navy Federal student loans eligibility requirements
You must be a Navy Federal member to be eligible for Navy Federal student loans. You, a family member or a household member must have ties to the Armed Forces, Department of Defense or National Guard to become an Navy Federal member.
Borrowers must also meet the following eligibility requirements, in addition to Navy Federal’s underwriting criteria:
- You and your cosigner (if needed) are U.S. citizens or permanent residents.
- You’re enrolled at least half-time at an eligible school.
- You have a grade point average (GPA) of at least 2.0.
- You meet your school’s Satisfactory Academic Progress requirement.
Navy Federal student loan application process
Navy Federal encourages borrowers to apply for its student loan early because the process can take two to four weeks, based on the borrower, their school, and the time of year the application is filed. You can begin your student loan application process after you know which school you’re going to and the school’s cost of attendance for the current academic year. You can’t apply before June 1 for the fall term, however.
Here’s what you’ll need to have on hand when you apply for a Navy Federal student loan:
- Proof of identity: You’ll need a government-issued ID (like a driver’s license) or a permanent resident card (“Green Card”) if you’re a permanent resident.
- Proof of enrollment: Have a transcript or another document that includes your name, school’s name and your cumulative GPA (GPA only applies to borrowers in their sophomore year or beyond).
- Proof of income: Copies of your two most recent pay stubs within the last 60 days is needed. Navy Federal may request additional proof of income, depending on your income type.
Navy Federal will verify your enrollment with the school you put on your application. Your school will determine the loan’s disbursement date and certify the loan amount. Your Navy Federal student loan can be decreased so it matches your school’s cost of attendance amount, after any additional financial aid is applied. Navy Federal will send funds directly to your school once the loan is finalized.
If you’d like to refinance your student loans with Navy Federal, you’ll also need the last statement for each student loan you want to refinance. It should take approximately two weeks for the funds to disburse on approved loans, but you should keep making payments to your previous lenders until you get confirmation your loans have been paid in full.
Should you use Navy Federal student loans?
Navy Federal student loans are private loans, which makes them less advantageous compared to the benefits you could get with federal student loans. For example, federal student loan interest rates are usually fixed and lower than private student loan rates.
Additionally, most federal student loans don’t require a cosigner or credit check. Repayment on federal students loans doesn’t begin until you’ve finished college or drop below half-time status. Federal student loans also offer flexible repayment plans, including plans based on your income.
Federal student loans might also be eligible for Public Service Loan Forgiveness (PSLF), depending on your line of work and your employer. If you work full-time for a United States federal, state, local or tribal organization, or a nonprofit, and make 120 qualifying payments, the remainder of your federal student loan balance might be forgiven.
If you go to college knowing you want to work for the U.S. military or in public service after graduation, it makes sense to take out federal student loans first so you’re eligible for PSLF. The U.S. military counts as an eligible government employer for the PSLF program. This includes service on behalf of the U.S. armed forces or the National Guard.
Eligible public service jobs include working in public elementary and secondary schools, public child service agencies, and special government districts such as public transportation, water, bridge or housing authorities.
A strategic move it so exhaust all of your federal student loan options, along with any grants or scholarships you can get, before applying for a Navy Federal student loan or other private loan. Private student loans are best used to fill the financial gap left after your existing federal financial aid.
Should you refinance your student loans with Navy Federal?
Refinancing your student loans makes sense if doing so will decrease your monthly payment or interest rate. This scenario could be likely if you only have private loans.
You should think twice about refinancing your federal student loans, however, especially if you’re eligible for PSLF. You could lose the benefits you enjoy with a federal loan like loan forgiveness possibilities, income-driven repayment plans, extended loan terms and more if you refinance them with a private loan. Refinancing your student loan can be beneficial but be sure the benefits outweigh the downside.
If you have a career in the military or are planning to have one, you could benefit from PSLF. Taking out a private student loan should be your last resort in this case. If PSLF won’t benefit you — such as if you plan on working in the private sector or you’re borrowing enough to attend community college, for example — you should still look to federal student loans first and then borrow only what you need from a private lender like Navy Federal.