Navy Federal Credit Union provides a diverse array of personal loans, catering to varying financial needs. Borrowers can enjoy the flexibility of choosing from a wide range of loan amounts and repayment terms, ensuring that the loan aligns with their specific requirements. However, it's important to note that personal loans are exclusively accessible to existing Navy Federal members, primarily consisting of military personnel and their families. With its tailored offerings and commitment to serving the armed forces community, Navy Federal Credit Union stands out as a reliable and accessible option for individuals seeking personal financial assistance.

Features

1. Military Affiliation Requirement. Navy Federal’s personal loan products are exclusive to those with connections to the military. This includes anyone who has previously or currently serves in the military, plus their families and household members.
2. Quick Funding. Navy Federal can provide your funds the same day you close on your loan agreement.
3. Low APRs. Credit union personal loans have a maximum annual percentage rate (APR) cap of 18.00%. In contrast, banks and online lenders typically have APRs up to 36.00%.
4. Long Repayment Terms. Navy Federal offers repayment terms for home improvement loans as long as 180 months. Loans for other purposes go up to 60 months.
5. Co-applications Available. If you have a low credit score, then you may want to consider applying for a Navy Federal loan with a second person. Getting a personal loan with a cosigner can help you secure lower APRs. The other person is equally responsible for making sure the loan gets repaid.
6. Best for Small Loan Amounts. At $250, Navy Federal offers one of the smallest loan amounts on the market, compared to the minimum $1,000 to $2,000 that other lenders often provide.

Navy Federal Personal Loan Options

Savings Secured Loan

• Your Navy Federal savings account fully secures this loan.
• While the loan is being repaid, your savings account continues to earn dividends.
• As you make payments, the funds in your savings account that were pledged as collateral become available to you again.
• Extended loan terms of 61 to 180 months are available for specific loan purposes, subject to certain minimum loan amounts.

Certificate Secured Loan

• With this option, you can borrow up to 100% of your certificate's principal balance at a competitive rate of 2.00% APR above the certificate's rate.
• The loan amount is limited to the balance of your certificate.
• The loan term must be the same as or shorter than the certificate's term.

Personal Expense Loan

• In addition to the secured loan options mentioned above, Navy Federal Credit Union offers unsecured personal loan options, namely, Personal Expense Loans.
• With loan amounts ranging from $250 to $50,000, borrowers can choose the amount that suits their needs.
• The loan offers tiered rates based on the repayment term, with APRs ranging from 7.99% to 18.00% for loan terms up to 36 months and 15.29% to 18.00% for loan terms between 37 to 60 months.

Pros and Cons

How to Apply for a Navy Federal Personal Loan?

1. Gather Necessary Documentation. Before applying, collect the required documentation, such as W-2s, pay stubs, and bank statements. These documents will be used to verify your information during the application process.
2. Choose Application Method. Depending on the loan's purpose, you can apply for a Navy Federal personal loan through the following methods.
   • Apply Online. Visit Navy Federal’s official website and fill out the formal personal loan application form online.
   • Apply by Phone. Contact Navy Federal's customer service and apply for the loan over the phone.
   • Apply in Person. Visit a nearby Navy Federal branch and complete the application process in person.
3. Submit Formal Personal Loan Application. Submit the completed personal loan application through your chosen method. Note that Navy Federal does not offer pre-qualification, so the formal application is the first step in the process.
4. Undergo Hard Credit Check. Be aware that Navy Federal will perform a hard credit check when you apply for the loan. This check may cause a temporary dip in your credit score.
5. Make a Repayment Plan. Once your loan is approved and disbursed, create a plan to repay the loan. Timely payments will positively impact your credit score, while missed payments can harm it. Consider setting up automatic payments to ensure on-time payments and manage your budget effectively to accommodate loan payments.
6. Monitor Credit Score. Since Navy Federal reports payments to the major credit bureaus, it's essential to keep track of your credit score and make efforts to maintain a positive payment history.

Best places to borrow a loan with bad credit

Upgrade

Upgrade is a prominent online lender that offers personal loans to borrowers with bad credit. They provide loan amounts ranging from $1,000 to $50,000, making them suitable for various financial needs. The minimum credit score required by Upgrade is relatively low, typically around 580. This makes it accessible to individuals with a less-than-stellar credit history. One notable advantage of Upgrade is its flexible repayment terms, which can extend up to five years. This longer repayment period allows borrowers to manage their monthly payments more effectively. However, it's worth noting that Upgrade charges origination fees ranging from 2.9% to 8%. Additionally, while they do not have any prepayment penalties, borrowers should be aware of the interest rates, which can be relatively high for individuals with bad credit.

Upstart

Upstart is another online lender that specializes in providing loans to borrowers with bad credit. Their loan amounts range from $1,000 to $50,000, allowing borrowers to access the funds they need for various purposes. Upstart utilizes a unique underwriting model that takes into account factors beyond just credit scores, making it more inclusive for individuals with limited credit history or low credit scores. The minimum credit score required by Upstart is typically around 580. One of the significant advantages of Upstart is its soft credit check, which means that applying for a loan does not negatively impact your credit score. Repayment terms offered by Upstart range from three to five years, providing borrowers with flexibility. While they do charge origination fees of up to 8%, it's important to note that they don't impose any prepayment penalties. However, borrowers with bad credit should expect higher interest rates.

LendingPoint

LendingPoint is a bad credit lender that offers personal loans ranging from $2,000 to $36,500. They consider borrowers with credit scores as low as 585, making them accessible to individuals with bad credit. LendingPoint prides itself on providing fast funding, often disbursing funds within one business day. Their repayment terms typically range from two to four years, allowing borrowers to tailor their loan duration according to their needs. It's important to note that LendingPoint does charge origination fees that can be up to 6%. They also have a slightly higher interest rate compared to traditional lenders, which is to be expected when borrowing with bad credit. However, they do not impose any prepayment penalties, enabling borrowers to pay off their loans early if they desire.

Universal Credit

Universal Credit is an online lender that specializes in bad credit loans, offering loan amounts ranging from $500 to $15,000. Their minimum credit score requirement is relatively low, typically around 550, making them accessible to borrowers with poor credit. Universal Credit offers repayment terms ranging from six months to five years, allowing borrowers to choose a duration that aligns with their financial situation. While they charge origination fees, the amount may vary based on the borrower's creditworthiness. One notable advantage of Universal Credit is its willingness to consider applicants who have previously filed for bankruptcy. However, borrowers should be aware that the interest rates associated with bad credit loans from Universal Credit may be higher compared to traditional lenders.

OneMain Financial

OneMain Financial is a well-established lender that specializes in bad credit loans. They offer loan amounts ranging from $1,500 to $20,000, making them suitable for various financial needs. OneMain Financial requires a minimum credit score of 600, slightly higher than some of the other lenders in this category. However, they have a reputation for considering other factors beyond credit scores when evaluating loan applications. OneMain Financial provides repayment terms that range from two to five years, allowing borrowers to select a term that fits their budget. It's important to note that OneMain Financial charges origination fees, which can vary depending on your residence state. While they do not disclose their interest rates upfront, borrowers with bad credit should expect higher rates.

Avant

Avant is an online lender that specializes in offering personal loans to individuals with bad credit. They provide loan amounts ranging from $2,000 to $35,000, catering to various financial needs. Avant has a minimum credit score requirement of 580, making them accessible to borrowers with less-than-ideal credit histories. Repayment terms offered by Avant typically range from two to five years, giving borrowers flexibility in managing their monthly payments. While Avant charges origination fees up to 4.75%, they do not impose any prepayment penalties. It's important to note that Avant's interest rates can be relatively high for borrowers with bad credit. However, they provide a transparent prequalification process that allows borrowers to check their potential loan offers without affecting their credit scores.

Requirements

1. Become a Member. The first and most crucial step is to become a member of Navy Federal Credit Union. Membership is a requirement to apply for their personal loans. As mentioned, their loans are available to borrowers across the credit spectrum, including those with bad credit or thin credit histories, and there's no minimum credit score requirement.
2. Gather Necessary Information. Before starting your application, gather the following information and documents.
   • Desired loan amount and term;
   • Current employment details and income;
   • Contact information, including phone number and email address;
   • Personal details of your co-applicant or co-borrower, if applicable.
3. Submit the Application. Once you have gathered all the necessary information, you can proceed to submit your personal loan application. As an existing member, you can apply through the Navy Federal website, over the phone, or by visiting a Navy Federal branch in person.
4. Loan Assessment and Approval. Navy Federal will evaluate your application and consider various factors, including your credit history (if available), income, and employment details. Remember, they cater to borrowers across the credit spectrum, so having bad credit or a thin credit history may not disqualify you from obtaining a loan.

Ways to Receive the Money

When a borrower applies for a personal loan from Navy Federal Credit Union, the credit union reviews the application and assesses the borrower's creditworthiness, income, and other relevant factors. As mentioned earlier, Navy Federal offers loans to borrowers across the credit spectrum, so they may be more flexible in their lending criteria compared to traditional banks.

Based on the applicant's financial situation and creditworthiness, Navy Federal will determine the loan amount that they are willing to offer. The loan amount will depend on various factors, including the borrower's income, credit history, debt-to-income ratio, and the purpose of the loan.

How to Pay off a Navy Federal Personal Loan?

1. Review Loan Terms. Before starting to pay off the loan, review the loan agreement and familiarize yourself with the terms and conditions. Take note of the loan amount, interest rate, repayment schedule, and any prepayment penalties, if applicable.

2. Set Up Automatic Payments. One of the easiest ways to ensure on-time payments is to set up automatic payments. You can link your bank account to your Navy Federal loan account and authorize the credit union to deduct the monthly installment from your account on the due date. This helps avoid late payments and keeps your credit in good standing.

3. Make Extra Payments. If you have the financial capacity, consider making extra payments towards the loan principal. You can reduce the overall interest cost and shorten the loan term by paying more than the required monthly installment. Some loans may have prepayment penalties, so check if your loan has any restrictions on making extra payments.

4. Use Windfalls or Bonuses. Whenever you receive windfalls, such as tax refunds or work bonuses, consider using a portion of the money to make a lump sum payment on your loan. This can significantly reduce the outstanding balance and help you pay off the loan faster.

5. Budget and Prioritize. Review your budget and identify areas where you can cut back on expenses to allocate more money towards loan payments. Prioritize paying off the loan, especially if it has a high-interest rate, to reduce the overall cost of borrowing.

6. Contact Navy Federal. If you have any questions or need assistance with your loan payments, don't hesitate to reach out to Navy Federal's customer service. They can provide guidance and support to help you manage your loan effectively.

7. Track Progress. Keep track of your loan balance and payments to monitor your progress in paying off the loan. Regularly reviewing your loan statement will help you stay on top of your repayment plan and ensure there are no discrepancies.

Things to Consider

1. Membership Requirement. Personal loans from Navy Federal are exclusive to Navy Federal members, which include military members and their families. Consider whether you are eligible for membership before applying.

2. Flexible Credit Eligibility. Navy Federal caters to borrowers across the credit spectrum, including those with bad credit or thin credit histories. Unlike many other lenders, there is no minimum credit score requirement. This makes Navy Federal personal loans more accessible to a wider range of individuals.

3. Loan Amounts and Terms. Navy Federal offers a wide range of loan amounts and various repayment terms. Consider your specific financial needs and choose a loan amount and term that fits your budget and repayment capabilities.

4. Application Process. The application process can be done online, by phone, or in person at a Navy Federal branch. When applying, be prepared with the necessary documentation, such as employment details, income, and contact information.

5. Secured Loan Options. Navy Federal provides secured loan options, such as Savings Secured Loans and Certificate Secured Loans. These loans use collateral to secure the loan, which can lead to more favorable terms and lower interest rates.

6. Prepayment Penalties. Check if there are any prepayment penalties associated with the loan. Some loans may charge a fee for early repayment, so consider this if you plan to pay off the loan ahead of schedule.

7. Credit Score Impact. On-time loan payments can positively impact your credit score, while missed payments can have adverse effects. Responsible repayment behavior can help build or improve your credit profile.

Alternatives

1. Credit cards allow you to borrow money up to a certain credit limit. You can make purchases using the card and repay the borrowed amount over time or in full each month. Credit cards may offer various rewards and benefits based on the card issuer. Companies: Various financial institutions and banks offer credit cards, including Chase, American Express, Citi, and Capital One.

2. Home equity loans are secured loans that use your home's equity as collateral. They typically have fixed interest rates and fixed repayment terms, making them suitable for one-time expenses or large projects. Companies: Wells Fargo, Bank of America, and TD Bank are examples of lenders offering home equity loans.

3. Home equity lines of credit (HELOC) are similar to home equity loans but work as a revolving line of credit. You can borrow against your home's equity multiple times during the draw period and only pay interest on the amount you use. Companies: U.S. Bank, PNC Bank, and SunTrust (now part of Truist) are some institutions that offer HELOCs.

4. Balance transfer credit cards allow you to transfer existing credit card debt to a new card with a lower or 0% introductory interest rate. This can help you consolidate debt and save on interest payments. Companies: Discover, Capital One, and Barclays are among the companies that offer balance transfer credit cards.

5. Peer-to-peer (P2P) lending platforms connect individual borrowers with investors who are willing to fund their loans. Borrowers may find competitive rates, and investors can earn returns on their investments. Companies: LendingClub and Prosper are popular P2P lending platforms.

Editorial Opinion

Important

How to Choose a Lender

1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

3. Carefully review all the terms and conditions of your payday loan contract.

4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Additional Resources

• What Credit Score Do You Need for a Personal Loan?
• How to Get a Personal Loan in 7 Steps
• Personal Loan Pre-Approval
• How to Apply for a Personal Loan
• Personal Loan vs Personal Line of Credit

Sources

• Navy Federal Credit Union. Personal Loans 05.10.2023