Navy Federal: 2023 auto loan review

Navy Federal auto loans are best for military members

Navy Federal Credit Union is the largest credit union in the United States, primarily because of the excellent benefits and services offered to military members and their families. While you have to be a member in order to benefit from what Navy Federal offers, it can provide low APRs and flexible term lengths.

Do you qualify?

Navy Federal does not specify any credit or income requirements. However, you will need to become a member of Navy Federal. You may qualify if you’re in one of the following categories:

• Active-duty member of the Army, Marine Corps, Navy, Air Force, Coast Guard, National Guard or Space Force.
• Delayed Entry Program.
• DOD Officer Candidate/ROTC.
• DOD Reservist.
• Veteran, retiree or annuitant.
• Parent, grandparent, spouse, sibling, child, grandchild or household member of one of the above categories.
• DOD civilian employee.
• U.S. government employee assigned to a DOD installation.
• DOD contractor assigned to a U.S. government installation.
• DOD civilian retiree or annuitant.

You must also open and maintain a savings account with Navy Federal with a $5 minimum balance.

Navy Federal versus Skyla Credit Union

As with Navy Federal, you must become a member of Skyla Credit Union (which recently merged with Parsons FCU) to benefit from its excellent rates. However, anyone can become a member of Skyla through the American Consumer Council, compared to Navy Federal’s more restrictive requirements. Both have wide-ranging loan amounts — Skyla's tops out at $150,000, while Navy Federal doesn’t advertise a maximum amount. Navy Federal’s maximum term length of 96 months beats Skyla’s 72 months. Generally, if you don’t qualify for membership with Navy Federal, Skyla is a great alternative.

Navy Federal versus USAA

Like Navy Federal, USAA serves U.S. military members, veterans and certain relatives of both. The two lenders serve all states and offer similar interest rates, though USAA's start about a percentage point higher. USAA stands out for its flexible payment options: You can make your loan payments biweekly, twice a month or monthly. Choosing biweekly payments can help you pay off your loan faster.

What we like and what we don’t like

Navy Federal gives you the freedom to select an auto loan with terms that work for you. However, there are limitations to who can apply for financing and restrictions on the vehicles that can be purchased. 

What we like

• Variety of term lengths: Navy Federal offers repayment terms from less than 36 months up to 96 months. This wide range means that you can choose a payment option that fits your budget and needs, with a maximum that’s much higher than that of competitors.
• Low APR: If you are looking to purchase a new vehicle or refinance your current auto loan, you may qualify for an APR as low as 4.54 percent. This is significantly lower than the minimum APR of many other lenders.
• Car buying service: Through TrueCar, Navy Federal’s car buying service lets you compare MSRPs, receive price offers on local inventory and even have your car delivered to you — no haggling required.

What we don’t like

• Membership required: Auto loans are available only to those who qualify for Navy Federal membership: active duty service members, immediate family members, veterans and Department of Defense employees. To become a member of Navy Federal, you must also maintain a Navy Federal savings account with at least a $5 balance.
• Restrictions for older used vehicles: While used vehicles with 2020, 2021 and 2022 model years qualify for rates as low as 4.54 percent, any car older than that or any car with over 30,000 miles has starting rates of 5.44 percent.
• Max rate not disclosed: Navy Federal’s starting rate is one of the lowest rates currently available. However, lenders save their best rates for borrowers with excellent credit — and it’s not clear how high Navy Federal’s rates can go. If you have a lower score, you’ll have to apply for preapproval to see your potential rate.

How to contact Navy Federal

Navy Federal has a few different customer service options for its members. Member representatives are available 24/7 over the phone at 888-842-6328, or you can get questions answered through a live chat feature on the website. If you prefer in-person communication, Navy Federal has 350 branches worldwide where you can talk face-to-face with a customer support agent.

Auto loan types offered

Navy Federal offers financing for new and used vehicles, along with auto loan refinancing. A company spokesperson stated there is no maximum amount on auto loans.

New and used auto loans

• Amounts: $250 and up
• Terms: 36-96 months, new; 36-72 months, used
• APR: From 4.54%

Navy Federal’s new and used auto loans come with flexible repayment terms. In the current high rate environment, few lenders can beat Navy Federal’s best rate, though competitor PenFed’s rates start at 4.49 percent. You can finance up to 125 percent of the vehicle’s value. That way, you won’t have to pay tax, tag, title and registration fees out of pocket. Just remember that you’ll have to pay interest on any costs you roll into your loan. Terms of 85 to 96 months carry a minimum loan amount of $30,000.

Refinance auto loans

• Amounts: $250 and up
• Terms: 36-96 months
• APR: From 4.54%

You can refinance with Navy Federal, which may save you money on your auto loan if you qualify for a lower interest rate than you currently have. Some borrowers also refinance to extend the loan term to get a more affordable monthly payment or shorten the loan term to pay the balance off sooner.

How to apply for a loan with Navy Federal

You can apply for an auto loan with Navy Federal online, via the Navy Federal app, over the phone or at a branch. In most cases, you should receive a decision within a few minutes of submitting your application.

If you’ve already decided on a vehicle or if you’re refinancing, you’ll also need to supply the vehicle identification number, the registration state, the exact mileage and the dealer name.

Features and additional perks

Navy Federal offers its members a number of perks, including car buying services provided by TrueCar. Refinancing your auto loan through Navy Federal will net a $200 bonus if certain conditions, including a $5,000 minimum loan amount, are met. Discounted loans are available to active duty and retired military members. You also have the option of purchasing gap insurance.

Fees and penalties

Navy Federal does not charge fees for loan applications, loan origination or early repayment. Late loan payments generate a $29 penalty. 

Navy Federal FAQs

How Bankrate rates Navy Federal