If you’re in the market for a new or used car, comparing loan offers from multiple lenders is the best way to get the lowest interest rate. If you’re an active-duty military member, veteran, or family member, you may qualify for a Navy Federal car loan with membership.

Navy Federal Credit Union offers low Annual Percentage Rates (APRs) on auto loans, no fees, and longer repayment terms. However, membership requirements can be quite restrictive. With most lenders offering an option to prequalify, we recommend comparing the offer you get from Navy Federal against a few other lenders to get the best possible deal.

Navy Federal Credit Union (NFCU) was established in 1933. Over the years, it has expanded its membership and now offers a wide range of financial products like loans for veterans and military members, including credit cards, personal loans, and more.

Navy Federal Credit Union auto loans can be used for financing new and used cars. It also offers loans for other vehicles, such as boats, RVs, and motorcycles. As with most other credit unions, you can apply for an auto loan to purchase or refinance just about any new or used car, truck, or SUV that is above a certain minimum market value (e.g., $2,000 or more) and is in good condition.  

If you’re a member, you can apply. There’s even a pre-approval process, which may help you get an idea of your loan terms and Annual Percentage Rate (APR) so you can compare your other loan offers on an “apples to apples” basis before you sign a contract.

Car Loan Rates

The interest rates you can get with a Navy Federal car loan will depend on whether you’re purchasing a new or used vehicle, as well as your repayment term. For new vehicles, APRs start at 4.54% for terms up to 36 months. APRs start at 5.44% for used cars for up to 36 months.

For the fourth quarter of 2023, the average interest rate on new cars across all lenders was 6.44%, and 9.06% on used cars for borrowers with “good” to “very good” credit scores. For qualifying borrowers, the rates offered by Navy Federal are much lower than these recent averages.

Car Loans Fees and Repayment Terms

Navy Federal offers a wide range of repayment terms of 36-96 months on new auto loans or to refinance an existing auto loan on a late-model vehicle. Oftentimes, these terms are longer than what other lenders can offer on a similar-age vehicle.  For vehicle loans on older used cars and trucks, the repayment term ranges from 36 to 72 months.

A major benefit of the Navy Federal car buying service is that there aren’t any origination fees or prepayment penalties. Typically, origination fees are 1% to 2% of the loan amount. If you borrow $30,000, you can save $600 in origination fees alone at 2%.

You can use TurboDebt’s auto loan calculator to estimate your monthly payments based on the loan amount, term, down payment, and interest rate.

You can only qualify for a Navy Federal car loan if you’re a member. The membership requirements are fairly strict, and it is only open to:

  • Active-duty service members of any branch of the U.S. Military and Reserves
  • Veterans of any branch of the U.S. Military and Reserves
  • Retired service members
  • Department of Defense (DoD) civilian personnel
  • DoD Officer candidates and ROTC members
  • Immediate family or household members of any of the above, including parents, grandparents, spouses, siblings, children, and grandchildren.

Additionally, you’ll need to have a stable source of income and will have to provide the following information to qualify for the loan:

  • Your contact information, including your physical address
  • Identification proof, such as a Driver’s License or Government ID
  • Proof of address
  • Social Security Number or Tax ID Number (ITIN)
  • Income and employment proof
  • Trade-in information (registration, loan, or title information), if you have one

Credit Score Requirements

Navy Federal doesn’t specify a minimum credit score required to qualify for the loan. However, you may be able to get a loan for veterans with bad credit if you add a co-signer to your application.  

If your co-signer has a good credit score, low credit utilization, and stable income, you can apply for preapproval to see if you qualify.

How It Works

Members who are eligible to get a used or new Navy Federal car loan can usually find lower interest rates. Navy Federal typically offers the lowest APRs available in the U.S., along with loan terms as short as 36 months (3 years) or as long as 96 months (8 years).

There’s no application fee for getting an auto loan through the Navy Federal Credit Union. Once you’re approved, you can set up automatic loan payments through online banking or the mobile app. You can also make additional payments on your loan if you want to repay it sooner since there’s no prepayment penalty.

If you have an existing car loan, you can also refinance your auto loan if you qualify for a lower APR with Navy Federal than your current auto loan’s APR. The minimum loan amount for refinancing is $5,000. Otherwise, the APRs and loan terms for refinancing are the same as those for used and new car loans.

Once you’re a member, applying for a Navy Federal car loan is easy and quick. Here’s what you can expect from the application process:

  1. Start with the pre-approval process. Provide your personal information and the details about your chosen vehicle (i.e., the year, make, model, trim level, and mileage). Enter the information of your co-signer if applicable.
  2. Once you submit your application, Navy Federal will pull one or more of your credit reports and determine the current market value of your vehicle.  They will usually make a decision within minutes, and you’ll receive an email or text about the status of your application.
  3. If you’re approved, you’ll receive a paper check for the funds by mail. Or you can also visit your nearest branch to pick up the check in person.
  4. Once you purchase the vehicle and make the payment to the dealership, you must send the title to Navy Federal within 90 days.  Navy Federal will hold the title until you pay off your automobile loan in full, at which point the credit union will release the vehicle’s title to you in your name, free and clear.

“It’s always a best practice to get pre-approved for an auto loan before you go shopping for a new automobile,” advises Brad Reichert, founder and managing director of Reichert Asset Management LLC. “That way, you can negotiate with full confidence when you talk to the seller and get the best deal on the vehicle you want,” he says. 

While Navy Federal car loans are a solid choice, the membership requirements may limit who can apply. We recommend shopping around for loan options to find the best interest rates for used or new vehicles. Here’s how Navy Federal stacks up against other financial institutions.

LenderNavy FederalPenFed Credit UnionConsumers Credit UnionUS BankBank of America
Loan amountsNot disclosed$500-$150,000$8,000-$100,000$5,000-$100,000Minimum $7,500
APRStarting at 4.54%Starting at 5.24%Starting at 6.34%Starting at 7.46%Starting at 6.29%
Repayment term36-96 months36-84 monthsUp to 84 monthsUp to 60 months48-72 months

Navy Federal vs. Other Credit Unions

Credit unions like Navy Federal can be a great choice for borrowers looking for lower interest rates. PenFed Credit Union is another auto loan provider with APRs starting at 5.24%.

Navy Federal doesn’t specify a maximum or minimum loan amount for car loans on its website. However, it doesn’t make financial sense to take out an automobile loan for a vehicle that is worth less than a certain minimum, e.g., $2,000 or less.  On the other hand, if you’re looking for a higher-than-average loan amount, we found PenFed’s maximum loan limit to be $150,000, one of the highest in the industry.

Navy Federal vs. Traditional Banks

We also compared Navy Federal against auto loans offered by traditional banks, such as US Bank and Bank of America.

Navy Federal’s interest rates are lower than what most traditional banks offer. Bank of America, for example, offers a starting APR of 6.29% on its automobile loans. Navy Federal also offers the most flexible repayment terms of 36-96 months. In comparison, Bank of America offers a maximum term of 72 months, even on brand-new vehicles.

As a borrower, you can benefit from Navy Federal’s low-interest rates, no loan origination or annual maintenance fees, and flexible repayment terms. It’s also a good option to consider for an auto refinance loan if you qualify. However, the membership requirements can be a drawback if you don’t happen to qualify under any of their prerequisites.

Navy Federal also has a solid industry reputation and good customer reviews, making it an excellent overall choice when it comes to rates and car-buying services.