Navy Federal Student Loans Review: A Comprehensive Guide

For active-duty military service members, former military members, and their families, Navy Federal Credit Union (NFCU) offers a range of financial products, including student loans. Since 1933, Navy Federal Credit Union has served military members and their families. Navy Federal partnered with LendKey to make private student loans one of its financial products. Managing student loans is an important part of your financial strategy. While not everyone can qualify for an NFCU student loan, those who are credit union members should carefully consider whether this lender is right for them. This article provides a detailed review of Navy Federal student loans to help you make an informed decision.

Navy Federal Student Loan Options

Navy Federal student loans cater to many different kinds of borrowers. The lender offers undergraduate loans, graduate loans, parent loans, and student loan refinancing options. Additionally, for borrowers who already have student loans, Navy Federal also offers refinancing for both private and federal student loans.

Key Features and Benefits

Navy Federal Credit Union is a good lender for borrowers who value accessible customer support and have a pre-existing relationship with the credit union. Customer service is available 24/7 for Navy Federal student loans, which is a perk unmatched by many similar companies in the industry.

Cosigner Release: You can let your cosigner off the hook once you make 24 consecutive, on-time, full principal and interest payments. A request to release a co-signer requires that the borrower has made consecutive timely payments during the repayment period with no periods of forbearance or deferment. The "repayment period" begins after any In-School and Grace Periods. "Timely payment" means each full principal and interest payment is made no later than the 15th day after the scheduled due date of the payment. "Consecutive payment" means the regularly scheduled monthly payment must be made for 24 months straight for private student loans, and 12 months straight for refinance loans, without any interruption immediately prior to the release request. To qualify for a co-signer release, the borrower must submit a request, meet the consecutive, timely payment requirements, provide proof of income, and pass a credit check.
Special benefits for parent borrowers: Navy Federal allows parents to refinance loans before their children have graduated from college. For parents eager to refinance Direct PLUS Loans or private loans, this flexibility can be invaluable.
Long forbearance period: Borrowers can pause loan payments for up to 18 months by putting loans into forbearance in increments of up to six months. This is a longer timeline than most lenders allow and provides added flexibility to borrowers facing financial trouble.
No origination or application fees: Navy Federal Credit Union doesn’t charge application or origination fees on student refinance loans.
Automatic Payments Discount: You’ll get a 0.25% rate discount if you choose to make automatic payments from a checking or savings account. The discount requires continued enrollment of automatic payments. The borrower authorizes automatic payments from a personal account via Automated Clearing House (ACH). If automatic payments are canceled or suspended at any time after enrollment, such as during a period of forbearance or deferment, the rate reduction will not apply until the borrower re-enrolls in automatic payments. For variable-rate loans, the APR, including the 0.25% rate reduction, may not fall below the floor rate.

Loan Options

Undergraduate Loans: With Navy Federal Undergraduate Student Loans, borrowers can take out up to $120,000. Navy Federal Undergraduate Student Loans only has two repayment terms, and starting rates on those loans are higher than with many competitors. That said, if you need only a small amount of money, you can get as little as $2,000 from Navy Federal, which is lower than with many companies.
Graduate Loans: As a graduate student, you're allowed to take out up to $160,000, which is $40,000 more than the undergraduate limit. The terms are the same, offering either five-year and 10-year options.
Parent Loans: Navy Federal allows parents to refinance loans before their children have graduated from college.
Student Loan Refinancing: Refinanced loans may be eligible for better rates than new loans. Navy Federal Credit Union offers student loan refinancing for both federal and private student loans. Refinanced student loans with NFCU charge no application or origination fees, and are available in term lengths of either five, 10 or 15 years. Refinancing your student loans makes sense if doing so will decrease your monthly payment or interest rate. Refinancing your student loans could help you lower your monthly payment, get a better interest rate or qualify for customized terms.

Interest Rates, Fees, and Terms

As many Navy Federal student loan reviews reveal, loan rates are competitive. As of Sept. 2, 2022, variable-rate loans start as low as 3.23% with autopay, and fixed-rate loans start as low as 3.44% with autopay. APR = Annual Percentage Rate. Rates are based on creditworthiness and subject to change. Advertised "as low as" APRs assume excellent borrower credit history. Your actual APR may differ and will be based on several factors, including credit history and loan term.

Loan Terms

Navy Federal offers both fixed- and variable-rate student loans. The lender also offers a choice of loan repayment terms, including the following repayment timelines: 5 years, 10 years, and 15 years (for refinanced loans). New loans have only a 5-year or 10-year repayment term length. Loan terms for a refinance are a little more flexible, too. While Navy Federal student loans only offer a 10-year repayment term, the organization’s refinance product offers five-, 10- and 15-year terms.

Fees

There are no origination fees or prepayment penalties charged for Navy Federal student loans. However, late payment charges of $20 may apply.

Navy Federal Student Loan Requirements

To qualify for a loan, you need to be a member of Navy Federal, though you can apply for membership during the loan application process. Navy Federal Credit Union (NFCU) is a members-only credit union that offers loans to active-duty military service members, former military members and their family members.

Borrowers must be a U.S. citizen or permanent resident.
Borrowers must have attended, or plan to attend, a school receiving federal aid.
Borrowers must be a legal adult in the state where they live.
Navy Federal doesn't disclose the minimum credit score required to qualify.

Navy Federal encourages borrowers to apply for its student loan early because the process can take two to four weeks, based on the borrower, their school, and the time of year the application is filed. You can begin your student loan application process after you know which school you’re going to and the school’s cost of attendance for the current academic year.

Required Documentation

If you're applying with a co-signer, you may be asked to provide proof of your identity. You'll need personal information such as your date of birth, address, and Social Security number, as well as documents showing your school enrollment status, major, and expected graduation date. You'll need to provide similar information about your cosigner. Before your loan is approved, you will likely be required to show documentation verifying your identity, proving your income, and validating the tuition and amount of financial assistance requested.

Proof of income: Copies of your two most recent pay stubs within the last 60 days is needed.

Navy Federal will verify your enrollment with the school you put on your application. Your school will determine the loan’s disbursement date and certify the loan amount. Your Navy Federal student loan can be decreased so it matches your school’s cost of attendance amount, after any additional financial aid is applied.

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Navy Federal Student Loan Repayment Options

Navy Federal defaults all borrowers to a standard 10-year repayment timeline, although loans are available for up to 15 years. Borrowers can take up to 4.5 years of in-school time and six months after graduation to begin repayment. Navy Federal private student loans are subject to credit qualification, school certification of loan amount, and student's enrollment at a Navy Federal-participating school. Navy Federal reserves the right to approve a lower amount than the school-certified amount or withhold funding if the school does not certify private student loans.

Available Repayment Plans

Navy Federal only offers two repayment options: while you're in school, and during a six-month grace period after you graduate.

FlatPay $25 per month: while in school and during a six-month grace period. Unpaid interest accrues. Interest is capitalized at the end of the grace period. A) $25 Monthly Payment Option: Assuming a $10,000 loan amount, a 10-year term and a 7.87% APR, you would make 54 (48 months in school + 6-month grace period) monthly payments of $25 while enrolled in school followed by 120 monthly payments of $152.23 to repay this loan. If the APR is 14.37% and the loan amount remains $10,000, you would make 54 monthly payments of $25 while you are enrolled in school followed by 120 monthly payments of $269.89 to repay this loan.
Interest-only: Pay the loan's interest monthly while in school and during a six-month grace period. Higher in-school payments. A) $25 Monthly Payment Option: Assuming a $10,000 loan amount, a 10-year term and a 7.91% APR, you would make 54 (48 months in school + 6-month grace period) monthly payments of $25 while enrolled in school followed by 120 monthly payments of $152.84 to repay this loan. B) Interest-Only Option: You would pay the amount of interest that accrued during each month while you are enrolled in school, with a minimum of $25. Thereafter, you would make 120 monthly payments calculated based on the principal balance and accruing interest.

Flat payments will be more expensive than interest-only payments in the long run, because interest will accrue while you're in school and during your grace period. This interest will then capitalize, meaning it will be added onto your loan balance after periods of nonpayment, including forbearance, deferment, and after your grace period.

Forbearance

If you have difficulty making payments, Navy Federal offers up to 18 months of forbearance in increments of up to six months. Navy Federal does not offer deferment.

Navy Federal Student Loan Refinancing

Refinancing student loans is different than consolidating them. Student loan refinancing lets borrowers replace their existing student loan or loans with a new loan from a private lender. Note that student loan refinancing is not the same as student loan consolidation. Refinancing could involve one loan or combining multiple private and federal student loans. Potential benefits of refinancing existing student loans could include simplified repayments and a lower rate.

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Refinancing your student loans makes sense if doing so will decrease your monthly payment or interest rate. If you refinance your federal student loans, you could lose certain benefits, such as forgiveness eligibility.

Benefits of Refinancing

Lower interest rates: With a good credit score and financial history, you could qualify for a refinance loan with a reduced interest rate, which can lead to substantial savings over the life of your loan.
Reduced monthly payments: Refinancing could help you lower your monthly loan payments. By extending your loan term or securing a lower interest rate, your monthly payments could become more manageable.
Simplified repayment: Managing multiple student loans with varying interest rates and due dates can be overwhelming. Refinancing allows you to combine your loans into a single, easy-to-manage payment.
Improved credit score: Making consistent, on-time payments on your refinanced loan can have a positive impact on your credit score. A better credit score could open more doors in your financial future.
Potential for fixed rates: If you have variable interest rate loans, refinancing may let you switch to a fixed interest rate. Fixed rates offer stability and protection against interest rate hikes, which makes budgeting more predictable.
Customized loan terms: Whether you want to pay off your student loans quickly or prefer lower monthly payments over an extended period, refinancing lets you make choices that align with your goals.

Potential Drawbacks of Refinancing

Before refinancing or combining student loans, you should understand the potential drawbacks. Once they’re combined, there’s no going back to multiple private and federal loans.

Loss of federal loan benefits: Refinancing federal loans with a private lender means letting go of federal benefits such as income-driven repayment plans and loan forgiveness options. It’s also important to note that if you plan to combine private and federal loans into a single private loan when you refinance, it could result in the loss of certain federal loan benefits such as eligibility for loan forgiveness.
Variable interest rates: If you refinance your loan to a variable interest rate, your payment could fluctuate, potentially leading to higher monthly payments if interest rates rise. This can make your loan repayments less predictable.
Good credit requirement: To qualify for favorable refinancing terms, you typically need a strong credit history and a good credit score. If your credit isn’t in tip-top shape, you may not qualify for the lowest interest rates or a refinance loan at all.
Extended loan term: Refinancing can lower monthly payments, but it often does so by extending the loan term. A longer repayment period could mean paying more in interest over time, even if your interest rate is lower.
Potential for fees: Some private lenders charge origination or application fees for refinanced loans. These fees can eat into any potential savings you might gain from lower interest rates. Consider the overall cost when evaluating options.

The decision to refinance and combine student loans often comes down to your unique situation. Look at rates and eligibility criteria from private lenders to determine if it’s feasible for you. If it is, ask yourself several key questions to decide if refinancing is the right option. Use your answers to choose your strategy for student loan debt repayment. If you’re working hard to pay off your loans quicker or struggling to manage multiple private loans, refinancing and combining might be a smart approach.

Alternatives to Navy Federal Student Loans

Navy Federal student loans may be the right choice for you, but it's important that you do your research and understand all of your options before taking out private student loans or refinancing student loans. There are many different private loan lenders, and rates and loan terms can vary. Borrowers should shop around and get multiple quotes to compare costs and fees and find out which loan servicer is right for them. You also can consider working with Juno, which will help you find the most competitive loan rates available.

Juno works with partner lenders offering private student loans for undergraduate students, private student loans for graduate students and student loan refinance loans. We get groups of borrowers together, and partner lenders compete for their business.

Navy Federal Student Loans vs. Ascent Student Loans

Ascent offers five different repayment lengths, while Navy Federal only has two repayment term lengths available for student loan borrowers: 5 years or 10 years. You may also qualify for a 1% cash-back reward from Ascent that will be paid to you after graduation, a perk that is not available with Navy Federal student loans.

Navy Federal has a late fee of $20 for its student loans, while Ascent doesn't charge any late fees whatsoever.

Navy Federal Student Loans vs. Sallie Mae Student Loans

Sallie Mae Graduate Student Loans has a late payment fee of 5% of the amount due, capped at $25. Navy Federal has a late fee for slightly less at $20. Sallie Mae has three repayment term lengths - five, 10, and 15 years - but it sets the term for the borrower. Navy Federal only offers student loans with five and 10-year terms.

Sallie Mae offers four months of the study service Chegg for free. Chegg offers expert Q&A, and students can submit up to 20 questions monthly.

How to Apply for Navy Federal Student Loans

To qualify for a loan, you need to be a member of Navy Federal, though you can apply for membership during the loan application process.

Eligibility: Be a U.S. citizen or legal resident, and a legal adult in your state.
Complete the online application.
Add a cosigner if needed. Navy Federal says nine out of 10 student loan borrowers have a co-signer, which can increase the chances of approval for a loan and help lower the interest rate.
Provide final documentation. Before your loan is approved, you will likely be required to show documentation verifying your identity, proving your income, and validating the tuition and amount of financial assistance requested.
Complete final steps after approval. Once approved, sign your loan agreement, which the credit union will certify with your school.

Customer Experience and Reputation

NFCU's customers generally report a good experience with the lender. It rates 4.5 stars out of 5 on Trustpilot, and its mobile app is also highly rated, indicating that it's easy to use and navigate. To contact Navy Federal's customer support, call the lender 24 hours a day, seven days a week.

Is Navy Federal Trustworthy?

As of now, NFCU's BBB profile is being updated, so there is limited available information on its rating or accreditation. While NFCU has been a longstanding financial institution with a solid track record, there are several complaints against the lender.

In late 2023, CNN published an investigative report about claims of racial bias in Navy Federal's mortgage lending. Navy Federal has not admitted to any wrongdoing, and the case is still ongoing.

In November 2024, the Consumer Financial Protection Bureau required Navy Federal to pay over $80 million to customers for illegal overdraft fees.

Navy Federal Credit Union released a statement following the investigation. "Navy Federal fully cooperated with the CFPB's investigation and we will continue to comply with all applicable laws and regulations, just as we always have and as we believe we did here," says the statement.

Strategic Considerations

Navy Federal student loans are private loans, which makes them less advantageous compared to the benefits you could get with federal student loans. For example, federal student loan interest rates are usually fixed and lower than private student loan rates. Additionally, most federal student loans don’t require a cosigner or credit check. Repayment on federal students loans doesn’t begin until you’ve finished college or drop below half-time status. Federal student loans might also be eligible for Public Service Loan Forgiveness (PSLF), depending on your line of work and your employer.

If you have a career in the military or are planning to have one, you could benefit from PSLF. Taking out a private student loan should be your last resort in this case.

A strategic move it so exhaust all of your federal student loan options, along with any grants or scholarships you can get, before applying for a Navy Federal student loan or other private loan.

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