USAA vs. Navy Federal: Which offers better auto loans?

Auto Loans

4 min read Published July 08, 2024

Written by

Rebecca Betterton

Edited by

Pippin Wilbers

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Key takeaways

USAA and Navy Federal offer similar financing products for U.S. military members, veterans and their relatives.
Of the two, USAA is best for borrowers who intend to pay off their loan early and require flexible payment options.
Navy Federal auto loans are a strong option for a driver who is considering a long-term loan.

USAA and Navy Federal provides banking and lending solutions to U.S. military members, veterans and qualifying relatives. Both lenders operate in all 50 states.

However, USAA offers flexible payment options allowing borrowers to pay whenever convenient. Navy Federal features loans with longer terms and a car-buying service to help simplify the shopping and financing process.

USAA vs. Navy Federal at a glance

You’ll find attractive APRs (annual percentage rates) and generous loan limits with USAA and Navy Federal. Weigh each lender’s perks to decide which is best for you.

	USAA	Navy Federal
Bankrate score	4.0	4.2
Better for	Flexible payment options Payment relief options	Longer terms Car-buying service
Loans offered	New and used purchase loans, refinance loans, lease buyout loans	New and used purchase loans, refinance loans
Loan amounts	From $5,000	From $250
APRs	From 4.94%	From 4.09%
Loan term lengths	36–84 months	Starting at 12 months
Fees	Not specified	Late payment penalty
Minimum credit score	Not specified	Not specified
State footprint	All states	All states
Time to funding	One to three business days	As soon as the same business day
Autopay discount?	Yes	No
Refinancing restrictions	Not specified	Not specified

USAA auto loans

Best for flexible payment options

Bankrate’s view

Founded in 1922, USAA has evolved from an auto insurance company to a full-scope provider of financial services. And unlike its competitors, USAA features flexible loan due dates so you can sync your payment plan to your payday. Borrowers can pay once a month, twice a month or every two weeks.

Pros

Flexible repayment options
Autopay discount
Minimal fees

Cons

Online prequalification available
Limited accessibility
Undisclosed loan details

Navy Federal auto loans

Best for longer-term loans

Bankrate’s view

Navy Federal features purchase and refinance loans in its lending arsenal. It is currently the country’s largest credit union, offering attractive financial solutions to its customers. Plus, Navy Federal partners with TrueCar, allowing you to comparison-shop for a vehicle online and even request delivery. Although the minimum credit score is not disclosed, you’ll likely need excellent credit to land the lowest rates.

Pros

Range of repayment terms
Extended shopping window
Car buying service

Cons

Undisclosed rates
Limited availability
Higher APRs for older vehicles

How to choose between USAA and Navy Federal

Both lenders only lend to servicemembers, veterans, their spouses and qualifying relatives. If you do not meet those requirements, compare other auto loan rates to find a better fit. Otherwise, USAA is ideal for flexible repayment options and Navy Federal for longer-term loans.

APR range

Neither lender discloses the expected maximum APR online. Because there is no prequalification, you’ll need to apply for preapproval to view your possible rates. Navy Federal boasts a lower starting rate of 4.09 percent versus USAAs’ 5.39 percent.

However, Navy Federal charges higher interest rates for older models. While this isn’t unusual for lenders, any vehicle with a model year before 2022 will have a much higher starting interest rate than its minimum.

Minimum credit score

Neither lender discloses its credit requirements. But as with most lenders, the higher your credit score, the better your interest rate will be.

Repayment terms

Both lenders offer fairly lengthy loan terms, with Navy Federal offering up to 96 months versus 84 with USAA. However, a loan term of up to eight years can be risky and result in overspending on interest.

Also, even though the USAA has slightly shorter repayment terms than the Navy Federal, it has some perks Navy Federal does not. USAA borrowers have the ability to make loan payments when it is convenient, as you can pay every two weeks or monthly. Making biweekly payments can help you pay off your loan faster and save on interest.

Time to receive funds

If the speed of funding is a top priority for you, Navy Federal is the better option. Its funds are available as soon as the same business day, versus USAA, which can take up to three business days. Another perk of Navy Federal is the 90-day shopping window, which relieves the pressure of finding the perfect vehicle quickly. USAA only gives you 45 days.

Fees

Navy Federal’s website does not disclose potential fees. Unlike USAA, it does not offer any discounts. USAA, on the other hand, does not charge loan application, origination or prepayment penalties. The lender also offers a 0.25 percent discount to borrowers who enroll in automatic payments.

The bottom line: Which lender is best?

It can be challenging to choose between the two as both offer attractive incentives that make them worth considering. USAA offers autopay discounts you won’t find with Navy Federal. But Navy Federal’s lower minimum APR, loan amount or faster funding times could make it a better fit for you.