Founded in 1933, Navy Federal Credit Union has more than 9 million members nationwide. Serving the military community, it offers a wide range of financial products including checking and savings accounts, mortgages, and private student loans. 

If you’ve exhausted all of your federal financial aid options and need additional financing for school, a student loan from Navy Federal Credit Union can help fill the gap. The lender offers fixed and variable rate loans, and doesn’t charge origination or application fees. Here’s all you need to know about Navy Federal Credit Union student loans.

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What We Like

  • Both fixed and variable rate loans available

  • No prepayment penalty

  • Co-signer release available after just 24 months

What We Don't Like

  • Credit union membership required

  • Not all schools qualify as eligible institutions

  • Only one repayment term available

  • Payments required while in school

Pros Explained

  • Both fixed and variable rate loans available: While some lenders only have fixed-rate loans, Navy Federal Credit Union offers variable rate loans too. As a borrower, you can choose a loan type that works best for your needs. For example, some borrowers prefer variable rate loans if they plan to aggressively repay their debt. 
  • No prepayment penalty: The lender doesn’t charge a prepayment penalty, so you can pay off your loan early without worrying about added fees. 
  • Co-signer release possible after just 24 months: Not all lenders allow you to remove the co-signer from a loan, and others require years of payments before you can apply for a cosigner release. You can apply for a co-signer release after making 24 consecutive monthly payments on time. 

Cons Explained

  • Credit union membership required: To qualify for a loan from Navy Federal Credit Union, you must be a member of the credit union. Membership is limited to military service members, Department of Defense civilians, and military family members. 
  • Not all schools qualify as eligible institutions: Your school must be on the lender’s list of eligible institutions to qualify for a loan.
  • Only one repayment term available: Navy Federal Credit Union only offers a 10-year term for undergraduate and graduate student loans, so it doesn’t have the flexibility that other lenders have. 
  • Payments required while in school: You can’t defer making payments until after graduation. You have to make at least partial payments while in school. You can make interest-only payments or $25 payments while enrolled. 

Navy Federal Credit Union Student Loans Available

Navy Federal partners with LendKey to issue student loans to U.S. citizens and permanent residents enrolled at eligible institutions. Loans are available for associate, bachelor’s, and graduate degrees. 

To qualify for a loan, borrowers must be members of the credit union, or qualify for membership and join the credit union when they apply for a loan online. 

Undergraduate Student Loans

For students going to school for their associate or bachelor’s degree, you can borrow up to $120,000 for your education expenses. You need to be enrolled at least half-time, and you can apply for a loan to cover the cost of one semester or the entire academic year. 

Graduate Student Loans

If you’re pursuing a master’s degree, you can borrow up to $160,000. The lender’s graduate school loans have the same interest rates and repayment options as its undergraduate loans.

Undergraduate and Graduate Student Loans
Fixed Rates 5.75% - 11.48%
Variable Rates 3.49% - 9.14%
Loan Amounts $2,000 - $120,000 (undergraduate) $2,000 - $160,000 (graduate)
Loan Terms 10 years
Lowest rate includes 0.25% automatic payment discount

Loan Eligibility

To qualify for a student loan, you must meet the following requirements: 

  • Be a Navy Federal Credit Union member or become a member during the online application process
  • Be a U.S. citizen or permanent resident
  • Enrolled at least half-time in an accredited degree-granting undergraduate or graduate program at an eligible non-profit college or university
  • GPA of 2.0 or higher
  • Maintain satisfactory academic progress as defined by your school
  • Earn at least $15,000 per year or more
  • Meet credit and income standards or have a qualifying co-signer

While a co-signer isn’t required, Navy Federal strongly recommends that undergraduate students add one to their application to increase their chances of qualifying.

Is Loan Prequalification Available?

Unfortunately, Navy Federal doesn’t have a loan prequalification tool. The only way to find out if you’ll qualify for a loan and see what rate you qualify for is to submit a loan application and go through a credit check, which can lower your credit score temporarily. 

Loan Fees

Navy Federal Credit Union doesn’t charge application or origination fees and if you choose to pay off your student loan early, you won't have to pay a prepayment penalty. 

However, it does charge relatively high late fees. If you miss a payment, the lender will charge you $20. Wisconsin residents will be charged 5% of the late payment amount or $10, whichever is less. If a payment is returned to you for insufficient funds, the lender will charge you a $10 returned payment fee. 

Loan Discounts

If you sign up for automatic payments, you get a 0.25% interest rate discount. 

Repayment Options

Navy Federal student loans all have 10-year terms. While in school, you are required to make payments, but you have two repayment options: 

  • Fixed payments: While you are in school and for six months after graduation, you’ll pay $25 per month toward your loans. 
  • Interest-only payments: You pay only the interest that accrues on the loan each month while you’re in school and during the six months after you graduate. 

Six months after you graduate, you’ll begin making principal and interest payments. 

Rewards and Benefits

Navy Federal doesn’t have a referral program. But the credit union does have a career assistance program for its members. You can access its online job search training system and resources, which include online tools and exercises, interview tips, and a job search dashboard. 

Are Co-signers Required?

While Navy Federal Credit Union doesn’t require applicants to have a co-signer, most borrowers will need one to qualify for a loan. Adding a co-signer to your application will increase your chances of getting a loan and qualifying for a lower interest rate. 

Co-signers may be eligible for co-signer release after you’ve made 24 consecutive monthly principal and interest payments on time. 

Nine out of 10 student borrowers have a co-signer, according to Navy Federal.

Forbearance and Loan Discharge Options

Navy Federal does not list forbearance or discharge information in its loan materials or application. If you have trouble with your payments, you should contact your loan servicer—LendKey—right away. In some cases, you may be able to postpone your payments temporarily.

Length of Time for Loan Approval and Disbursement

While the application takes just 15 minutes to complete online, Navy Federal recommends that applicants apply for a loan well in advance. The approval and disbursement process can take between two and four weeks to complete depending on your school, so make sure you give yourself plenty of time. 

Is Student Loan Refinancing Available?

Refinancing for undergraduate and graduate student loans is available. Variable and fixed-rate loans, and five, 10, and 15-year loan terms are offered. You can refinance up to $125,000 in undergraduate student loans and up to $175,000 in graduate student loans. 

Customer Service

Student loans are serviced by LendKey. LendKey is not included in the Consumer Financial Protection Bureau’s latest Student Loan Ombudsman Report, but it has a 4.5 TrustScore on TrustPilot—five is the highest—with over 240 customer reviews. 

Customer support is available Monday through Friday 9 a.m. until 8 p.m. EST. You can reach LendKey’s customer service by phone or email. 

  • Phone: 888-549-9050
  • Email: Customer.Care@LendKey.com

Applying for a Navy Federal Credit Union Student Loan

Before applying for a private student loan from Navy Federal Credit Union or another lender, make sure you fill out the Free Application for Federal Student Aid and use any federal financial aid you’re eligible to receive first. 

Once you reach the federal borrowing limits, you can proceed with your loan application. You’ll need the following information: 

  • Social Security number
  • Date of birth
  • Phone number
  • Email address
  • Current address
  • Monthly income
  • Housing costs
  • Employer information

Verdict

If you’re an undergraduate or graduate student who needs additional money to pay for school and have exhausted all of your federal financial aid options, Navy Federal is a viable option for military service members and their families. Allowing you to choose between fixed and variable rate loans and offering cosigner releases, you can get the funds you need for the semester or academic year. 

Keep in mind that the credit union has very limited repayment options and you have to repay the loan within 10 years. It also has higher interest rates than some other private lenders, so it may be worthwhile to shop around before applying for a loan. Check out the best student loan companies of 2020 for the most competitive rates and benefits. 

Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders. We collected over 45 data points across more than 15 lenders—including interest rates, fees, loan amounts, and repayment terms—to ensure that our content helps users make the right borrowing decision for their education needs.