Navy Federal Credit Union is a Virginia-based credit union that specializes in all types of lending including auto refinance loans. You must be a member to qualify for a Navy Federal auto refinance, and the credit union is only open to members of the armed forces, the DoD, veterans, and their families.
Term lengths for auto refinancing from Navy Federal range from 12 to 96 months, and the credit union offers some of the lowest interest rates in the market. You can also use Navy Federal’s application to get pre-approved for a car loan. After the credit union issues the check, your preapproval and interest rates are valid for 60 days, giving you plenty of time to look for a car. Keep reading to know more about Navy Federal auto refinance loans.
The Basics of Loan Refinancing
The purpose of refinancing is to replace an existing loan with a new one with a lower interest rate. As with your initial auto loan, your credit score heavily influences the interest rate you pay if you refinance. You’ll probably receive a reduced rate if your credit score has improved since you got your existing loan.
Refinancing your car loan allows you to upgrade your ride and drive your dream car. The good news is that you can refinance your car loan anytime. However, it’s advisable to refinance as soon as possible so you can save more money.
Here are some benefits of refinancing:
- Reduced interest rate: Refinancing can reduce your interest rate over the length of your loan term.
- Reduced installment: Refinancing your car loan allows you to lower your monthly repayment amounts and provides more breathing room with your finances.
- Shorter loan tenure: Refinancing allows you to pay for your car much faster, which means you can own your car sooner.
- Improved credit score: If you can’t qualify for a car loan sooner, you can improve your credit score, lower your interest rate, and gain eligibility for different loans from multiple lenders.
What You Need to Know About Navy Federal’s Auto Loan Options
Navy Federal provides new and used vehicle loans and vehicle refinancing loans for cars and trucks. Navy Federal also provides loans for other luxury vehicles like motorcycles, boats, and other watercraft vehicles. However, you’ll need to apply for a loan from a separate lender if you want a lease-buyout loan or intend to purchase a used automobile from a private seller.
If you are eligible for a Navy Federal auto loan, you must submit the following information:
- Your phone number
- Your email address
- Income data
- Current loan amount
- Current loan repayment period
If you have a bad credit score, you can include a co-signer in your application to improve your chances of getting your loan approved. You must also provide the above information if opting for the co-signer route.
If you’ve identified the car you want to buy, the following information is also necessary:
- Vehicle identification number (VIN)
- State of registration
- Mileage reading
- Name of the dealer or seller
You must be a Navy Federal Credit Union member to apply for an auto loan. As with other credit unions, only a certain demographic is eligible to join. You must be an active duty member of the Army, Marine Corps, Navy, Air Force, Coast Guard, or Air National Guard. Retired service members, Department of Defense civilian employees and retirees, contractors, veterans, and their immediate family members are all eligible to join the Navy Federal Credit Union.
Navy Federal Credit Union does not set any prerequisites, such as minimum credit scores, aside from membership. Even with a poor credit history, you can still get a loan. However, depending on how much you want to borrow, you might need a co-applicant.
Navy Federal may give you a low starting annual percentage rate if you have excellent credit and intend to finance a new car for fewer than 36 months. However, if you require a loan with a longer term, you might be eligible for a cheaper interest rate with a different lender.
Loan Repayment Period
For new cars, you can choose a loan length of up to 96 months, while the maximum loan duration is 72 months for used cars. Remember that a longer loan term will spread out your obligations and can make your monthly installments more manageable, but you’ll pay more in interest overall.
For a one-off fee of $299, Navy Federal offers guaranteed asset protection insurance and will finance it as part of your auto loan. Gap insurance can help you pay the difference if your vehicle is damaged or stolen and you owe more on your auto loan than the car is now worth.
Calculating Your Loan Payment
Navy Federal has an online calculator to help you compute the monthly payments for your car loan. To use the calculator, enter your car’s purchase price, down payment, loan term duration (in months), and interest rate. The calculator will display your monthly payment amount and enable you to determine your ability to repay. Tinker with the entries to find a comfortable pay range, depending on your financial situation.
Advantages of Navy Federal Auto Refinance
Long loan periods enable borrowers to take on higher loan amounts while maintaining more manageable monthly payments. However, you will pay more interest the longer your auto refinancing loan term is. Financing limits range from $250 to $500,000, while $5,000 is the smallest amount you can borrow for refinancing. Navy Federal doesn’t provide a maximum.
Whereas outstanding financials may qualify you for a loan with a reduced interest rate, you might not refinance if your income and credit score are too low. If so, spend a few months raising your creditworthiness before making another attempt.
For those who meet the requirements for membership, a Navy Federal Credit Union vehicle loan or auto refinance loan may be a wise decision. Members of credit unions can benefit from low APRs and extended loan durations. You may need to go elsewhere for a loan if you are not a member of the armed forces nor come from a family of military personnel.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.