How To Get a Debt Consolidation Loan With Navy Federal
6 MIN READ
Published December 08, 2023 | Updated December 12, 2023
Millions of Americans are struggling with credit card debt, personal loans, and debt from other sources on which they may be paying thousands in interest charges over the years. If you’re juggling multiple payments each month and need the simplicity of having a single payment at a lower interest rate to pay off your debts easily, consider getting a veteran debt consolidation loan.
The Navy Federal Credit Union offers memberships to veterans, active-duty members of all military branches, and their family members. The credit union has multiple financial products, such as the Navy Federal debt consolidation loan, that can help you manage your debts effectively.
When you get a Navy Federal personal loan, you’ll be able to combine several debts into a single payment. This will help you avoid the hassle of juggling several payments to different lenders. With streamlined payments, you may be able to get debt-free sooner.
If you have high-interest debts, a lower-rate loan can also help you save money in the long run by reducing what you pay towards interest.
Debt Consolidation Loan Rates
Navy Federal Credit Union offers personal loans of $250 to $50,000, which can be used for consolidating debts.
The annual percentage rate (APR) range for loans with terms up to 36 months is 8.99% to 18.00%. Larger loan amounts with longer repayment terms of 37 to 60 months can cost more, with interest rates of 15.29% to 18.00%.
The average credit card interest rate is currently 27.81%, so even if you get a consolidation loan at 18% APR, it can translate to huge savings in interest payments over the life of the loan. The exact APR you qualify for will depend on your creditworthiness.
Depending on the amount of interest you are paying on other high-interest loans and credit cards, this could be potential savings for you in interest. The exact interest rate of your quote depends on your creditworthiness.
Debt Consolidation Loan Fees
When considering any type of loan for veterans, it’s important to pay attention not just to the interest rate but also to the potential fees you may have to pay. Navy Federal debt consolidation loans do not come with any loan origination fees.
You also won’t have to pay prepayment penalties if you pay off your loan earlier. However, you'll need to pay a late fee of $29 if you do not pay the installment on time.
Use Navy Federal’s debt consolidation calculator to determine if you should consolidate your debts. You can fill in your credit card balances and loan amounts, interest rates, fees, and minimum monthly payment to see your monthly payment when you take out a consolidation loan.
To qualify for a Navy Federal debt consolidation loan, you’ll need to be a member first. You can only become a credit union member if you’re a:
- Active-duty service member
- Retired service member
- Department of Defense civilian personnel
- Family or household member of a military member
Navy Federal doesn’t specify a minimum credit score requirement. You’ll also need to provide a few documents to support your application, such as:
- Details about your current income and employment
- Identification proof
- Proof of address
- Social Security number
- NFCU Access Number
If you’re applying with a co-applicant, they’ll also need to provide the same documents.
You can only apply for a Navy Federal debt consolidation loan in person since no online application process is available. Here’s a step-by-step guide on how to apply:
- If you aren’t already a member, apply for a membership by providing your military details and personal details like your Social Security number.
- Once you’re a member, visit a local branch to fill out an application for the loan.
- Provide documents like identification proof, proof of residence, employment status, and income details.
- Once you submit the application, there’ll be a hard credit inquiry.
- Sign a loan contract once your application is approved.
- You’ll usually receive the loan funds in your account within one business day since Navy Federal offers same-day funding.
Improve Your Chances of Getting Approved
Even though Navy Federal doesn’t specify a minimum credit score requirement on its website, loan approvals depend on the borrower’s creditworthiness. To improve your chances of getting approved for a loan, here are a few tips to keep in mind:
- Make sure you have all the necessary documents required for the loan application. Visit your local branch or call to ask for the specific documents you need.
- Fill out the loan application accurately and make sure it's fully filled out.
- Get a free copy of your credit reports from all three credit bureaus to check your credit score before you apply.
- If your credit score is low, take steps to improve it before you apply for the loan, such as by paying your bills on time, reducing your credit utilization, and disputing any incorrect information in your credit history.
- Avoid applying with multiple lenders at once. Multiple hard credit inquiries at once can lower your credit score further.
While Navy Federal debt consolidation offers competitive rates, the biggest drawback is that you need to be a member to get a loan.
|PenFed Credit Union
|Up to 6%
|Up to 60 months
PenFed Credit Union is another option for a personal with loan amounts ranging from $600 to $50,000 and APRs of 8.49%-17.99%. You don’t need a military connection to get a loan.
SoFi has higher APRs, but it offers flexible loan amounts and features like unemployment protection that aren’t available with Navy Federal.
If you’re looking for longer loan terms, Discover offers loans with up to 84 months of repayment terms.
A Navy Federal debt consolidation loan can be right for your financial situation if it helps you save money compared to what you’re currently paying on your debts. We recommend making a list of all your debts with the outstanding balance and APRs and comparing it against the APR you’re getting at Navy Federal.
Before you apply for a loan, it’s also a good idea to compare loan options from other lenders to see if you can get a lower interest rate. This will help you make an informed decision and get the best possible loan offer.