Navy Federal auto loans start at very low rates for borrowers with excellent credit. There's no penalty for paying off your loan early.
Navy Federal Credit Union; Alyssa Powell/Insider
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One of the biggest attractions of a Navy Federal auto loan is the credit union's low interest rates. Navy Federal also features an online Car Buying Center, where the company walks you through the process of financing, buying, researching, and insuring your next car.
Unlike many other lenders, you need to be a member of Navy Federal to apply for and receive an auto loan. You're only eligible if you are an active military member or veteran, as well as an employee or retiree of the Department of Defense. Family members of any of the aforementioned groups also qualify.
Loan amounts range from $250 to $500,000 on new and used cars. The minimum you can borrow to refinance is $5,000, and Navy Federal doesn't list a maximum.
Loan terms start at 12 months and maximum term lengths vary depending on the type of car you're looking to finance. Your loan term for a new vehicle can be as long as 96 months, while used vehicles have a limit of 72 months. Keep in mind that the longer your loan term, the more likely you are to go upside down on your loan, meaning you owe more on your car than it's worth.
Navy Federal's rates vary depending on your term length, the model year of your car, and the number of miles on the vehicle.
New cars have the lowest rates. Late-model used vehicles — defined as 2021, 2022, and 2023 model years with 7,500 to 30,000 miles — have better rates than other used vehicles. If your vehicle is 20 model years or older, the vehicle is deemed classic or antique and subject to collateral loan rates.
The credit union has a mobile app in the Google Play and Apple Stores if you want to manage your loan on the go.
Navy Federal Credit Union is not currently rated by the Better Business Bureau, because Navy Federal is in the process of responding to previously closed complaints.
The credit union used to have an A+ rating from the BBB. The BBB determines its score by looking at a company's response to customer complaints, honesty in advertising, and openness about business practices.
Navy Federal has been involved in a recent scandal. A Navy Federal employee alleged that the lender pressured mortgage underwriters to approve loans even without believing applicants could repay them. She then filed a lawsuit and said Navy Federal retaliated against her whistleblowing by altering her job duties. She dropped the case in late 2020.
Navy Federal Credit Union | pnc bank | Bank of America |
Loan APR | Loan APR | Loan APR |
Loan range $250 to $500,000 | Loan range $5,000 to $100,000 | Loan range $7,500 to $150,000 |
Compared to the competition, Navy Federal has some of the best interest rates out there. Its rates start significantly lower than with from PNC and Bank of America.
PNC only offers financing for cars model year 2014 or newer — if you want to buy an older car, you won't be able to get a loan through PNC. Bank of America offers financing to cars fewer than 10 years old, while Navy Federal offers financing for cars less than 20 model years old.
Navy Federal doesn't list a required minimum score to get an auto loan, but as a rule of thumb, the higher your credit score, the lower your rate. That doesn't mean it's impossible to get a loan with a lower credit score, but you may need to enlist the help of a cosigner to qualify for a loan.
Your preapproval is good for up to 90 calendar days, so you have ample time to shop around for cars and find one that's the best fit for you.
While there's no one-size-fits-all answer to this question, be careful before you take out a car loan with a long term length. Dealers may offer term lengths as long as eight years, but your payments might not be able to keep up with how fast your car depreciates, or loses value. The longer the term, the more money you'll pay in interest. Keep in mind that shorter term lengths come with higher monthly payments, though.
