Navy Federal Credit Union Debt Consolidation Review

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Dedicated to service members and their families, Navy Federal Credit Union offers several terms for consolidating debt into one monthly payment. It might just be the boost you need to overcome debt once and for all.

Struggling with debt is something everyone experiences at some point in their lives. The same credit that allows us to take advantage of the moment and purchase objects and experiences that enrich our lives can sink us deeper and deeper into debt until it looks like there’s no end in sight. But just like the helping hand of our armed forces, Navy Federal Credit Union is there to provide you with a debt consolidation service to get you back on your feet. 

Our guide will introduce you to Navy Federal Credit Union debt consolidation loans and what signing up for one of these loans can accomplish for you. There are many benefits to obtaining a debt consolidation loan from Navy Federal Credit Union, albeit with some caveats to consider. With that said, plenty of people have used debt consolidation loans to not only get out of debt faster but pay less in interest payments over the life of the loan. 

Are you ready to see how you can crush your debt with a debt consolidation loan from Navy Federal Credit Union? Let’s get started. 

What is Debt Consolidation

Debt consolidation describes the process of combining several of your debts into one. This can help make paying off that debt more manageable by tackling a single payment, rather than a few each month. Plus, as long as you’ve got good credit, you may be able to get a better interest rate, saving you money on interest payments in the long run. 

There are many factors that can determine when you should consolidate your debt. For example, if you have multiple monthly payments on credit cards or other debt, consolidating all those payments into one can definitely help keep you on track. Consolidating debt works best when you have a decent credit score, as it can help you earn lower interest rates on your new loan. At the same time, none of this matters unless you have a plan to stay out of debt—and stick to it. 

How Does Navy Federal Credit Union’s Debt Consolidation Loan Work

In contrast to a regular banking institution, Navy Federal Credit Union (NFCU) was established for military members and veterans alike. When it comes to credit unions vs. banks, NFCU can limit who it provides services for based on specific characteristics. In this case, NFCU members must be veterans, have ties to the armed forces (regardless of the branch), work for the Department of Defense or National Guard, or have an immediate family member who is an NFCU member already.    

Navy Federal Credit Union offers both personal loans as well as debt consolidation loans. Both loans are typically unsecured, meaning there’s no collateral on the line if you default on your payments. When it comes to paying off debt the smart way, NFCU debt consolidation loans could be the leg up you need to get back in the black. 

To qualify for a debt consolidation loan from NFCU, you’ll need to apply and accept the terms and conditions. Depending on your financial situation, including your credit score, you may be offered loan terms that cover one or more of your balances, or your entire amount of debt completely. 

Once you are approved for a debt consolidation loan, you’ll typically receive the full loan amount within a few days. In some cases, you may even be able to receive the funds the same day you apply. You can then apply those funds to pay off debt and consolidate all your payments into one monthly sum. As long as you continue to make on-time payments, you can potentially improve your credit score as you pay off your existing debt. 

NFCU Debt Consolidation Loan Features 

Applying for a debt consolidation loan from Navy Federal Credit Union may look the same for most applicants, but the terms you’re offered will depend on your specific qualifications. Still, there are some basic features you can expect to gain access to once you accept NFCU’s debt consolidation loan. 

For example, a single monthly payment could mean the difference between making one on-time payment and trying to remember a handful of payments with various due dates. Consolidating your debt this way can help you set yourself up for success and turn the tables in your favor. 

Navy Federal Credit Union offers flexible loan terms of up to 36 months or between 37 and 60 months. It’s more common to obtain a debt consolidation loan with terms less than 36 months (or 3 years) for lower debt balances. Longer terms will allow you to spread out your payments so you can tackle larger debts over time.

In total, NFCU offers loan amounts of $250 all the way up to $50,000. This all comes with no origination fees or prepayment penalties. The former saves you money up-front while the latter can give you freedom once you satisfy the loan terms. 

Navy Federal Credit Union offers competitive interest rates depending on your credit score, of course. Candidates with higher scores can potentially take advantage of interest rates as low as 7.49% APR for a loan term of fewer than 36 months. Interest rates for 37-60-month term debt consolidation loans range from 14.79% to 18% APR. 

Costs 

As we mentioned, there are no origination fees or prepayment penalties if you take care of your debt consolidation loan early. You won’t pay an application fee either. 

However, NFCU does charge a $29 late fee for payments made after the due date. You’ll also be subject to the interest rate you qualify for, which may or may not cost you more than most people to pay off. 

Pros

A debt consolidation loan from Navy Federal Credit Union can be good for people who: 

  • Are active NFCU members
  • Carry multiple debts on several credit cards
  • Are paying high interest rates on existing debt
  • Are prone to late fees because they forgot to make their payments on-time
Cons

Debt consolidation loans from Navy Federal Credit Union are not for everyone, including those who:

  • Are quoted a higher interest rate from NFCU than their existing loan providers
  • Have a low credit score and may not qualify for enough to tackle multiple debts 
  • Want to apply online, rather than in-person or over the phone
  • Want a bank bonus for signing up 
  • Are not eligible for membership

So how do people get into debt and then get out? They have to set up a plan and stick to it. Too much debt can take its toll on your finances, so it’s best to nip it in the bud when you can. 

When debt consolidation loans are part of your long-term get-rid-of-debt plan, they can make your life a whole lot easier. 

Alternatives to NFCU Debt Consolidation Loans

Many banks offer debt consolidation loans, including the following lenders. 

SoFi

If you have a particularly large amount of debt and you want to consolidate it into a single monthly payment, SoFi has the terms you’re looking for. You can borrow anywhere from $5,000 to $100,000, which should cover most debts, even if they are split up between creditors.  

SoFi, like many on our list, does not charge an origination fee, though you will need a minimum credit score of 680 in order to qualify. This debt consolidation lender offers loan terms of 24-84 months, giving you plenty of time to tackle those large debts. While it might take up to 11 days for you to receive your funds (which is the longest of our NFCU alternatives), you can take advantage of competitive interest rates ranging from 7.99% APR to 23.43% APR. 

Discover

Discover is one of the more popular debt consolidation loan providers. As long as you meet the application requirements (which don’t differ all that much from any other loan provider’s), you can apply for and receive a debt consolidation loan. 

Like NFCU, Discover doesn’t charge its customers for paying the loan back early or originating the loan in the first place. Discover offers loan amounts from $2,500 to $35,000, depending on what terms you qualify for. You can also take advantage of loan terms from 36 to 84 months, at interest rates of 5.99% to 24.99% APR. 

Lending Club

If high credit scores are not your strong suit and you have a score of 660 or less, you should consider applying for a debt consolidation loan from LendingClub. This lender offers terms of 36 or 60 months exactly. There is a one-time origination fee of 3-6%, but no prepayment penalty applies if you happen to be able to pay off your debt consolidation loan early. 

Interest rates from LendingClub vary from 8.05% APR for the best credit scores to 35.89% APR tops. That’s one of the steepest APRs on our list of alternatives, but it can be worth it if you’re trying to pay off credit card debt. A successful application will open the door to up to $40,000 in debt consolidation, as long as you qualify. 

LightStream

LightStream prides itself on offering some of the best rates on the market when it comes to debt consolidation loans. In fact, their Rate Beat Program works to gain your business by determining (and matching) the lowest rates out there. 

You can borrow up to $100,000 from LightStream as long as you qualify. Interest rates begin at 4.49% APR and cut off at 19.99% APR. Loan terms last from 24 months to 84 months at the longest, which is 7 years you’ll have to pay off your debt. There’s no origination fee and you may even be able to receive your funds the same day. Otherwise, LightStream typically funds loans within two business days of receiving your application. 

FAQs

How will a debt consolidation loan affect my credit score?

Though a debt consolidation loan may negatively affect your credit score in the short term, it can work to improve it in the long run. NFCU will run a hard inquiry on your credit, which dings it about 5-10 points. This inquiry will only last about 2 years. However, your credit utilization ratio will not necessarily be affected, as you’ve still got that same amount of debt to pay off.

At the same time, many debt-free stories start this way. On-time payments can positively raise your credit score as long as you keep up a good payment history. 

What do I need to complete the NFCU application?

You can easily complete the NFCU application online. Have your income information, as well as any information regarding your debts, ready for reference. You’ll also need to submit to a credit check and prove that you’re eligible for membership at NFCU.

If you’re wondering, “Is online banking safe?” you have nothing to worry about when it comes to NFCU. This particular bank provides the utmost security measures to keep your banking information safe from the bad guys. 

When is debt consolidation a good idea?

Debt consolidation is a good idea if you have multiple monthly payments that you’re finding hard to keep track of. It can also be a good idea to consolidate your debt if you have a good credit score and want to obtain a lower interest rate. With that said, debt consolidation loans don’t make the debt go away completely. Instead, your debts are simply consolidated into one lender and one monthly payment.

Break Free From Your Debts

Though it may not seem like you’re doing much when you consolidate your debt into a single monthly payment, the best debt pay-off plans can start with this step. Navy Federal Credit Union offers members plenty of benefits to help them pay off their high-interest debts with a debt consolidation loan successfully.

We hope you’ve learned more about what debt consolidation is and how Navy Federal Credit Union can help you tackle your debts to enter the final chapter in your debt-free story. Though it may not seem like it now, your debt-free future could be just around the corner.

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About the author

Brian Meiggs
Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.
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