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.
Navy Federal lends to the military community and nobody else. You need to be active duty, a veteran, a Department of Defense or National Guard employee, or an immediate family member of a current member. No credit score gets you around that gate. If none of those describe you, the loan in this review is not available to you at any rate, and the rest of this page is research rather than a shopping list.
These two lenders take anyone who qualifies on credit alone. Both show you a real rate in a couple of minutes with a soft pull, so you can see your number before you decide whether chasing a credit union membership is worth it.
Every rate and loan amount on this page was read off each lender’s own site as of this update. Checking a rate at Upstart or Upgrade is a soft pull that does not move your score. Terms change, so confirm before you apply.
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. If you are shopping credit unions more broadly, we track the current sign-up offers in our guide to credit union promotions.
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.
Rates move with your credit. As of this update, Navy Federal publishes 8.74% to 18.00% APR on debt consolidation loans of up to 36 months, and 10.69% to 18.00% APR on terms of 37 to 60 months. The bottom of those ranges goes to the strongest files only, so treat it as a headline rather than your quote.
The number that actually matters here is the ceiling. Navy Federal stops at 18.00%. Most online lenders keep climbing to 35.99% before they decline you, which means a weak credit file gets a gentler worst case from a credit union than it does almost anywhere else. If you can get through the membership door, that cap is the real argument for this loan.
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. That fee structure is normal for a credit union and better than most banks, which is part of why the best online banks and the newer neobanks have had to drop their own fees to compete.
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 cover every balance, in which case start with personal loans for bad credit
- Need more than $50,000, which is where the debt consolidation loan stops
- 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
Two kinds of readers end up here. Either you cannot join Navy Federal, or you can and the rate they quoted you is no better than what you already pay. Both problems have the same answer, which is to collect two or three real quotes before you sign anything. Here is how the numbers line up as of this update.
Upstart
Upstart is where we send most people who get turned down elsewhere. It underwrites on more than your score, pulling in your education, your job history and what you earn, so a short credit history does not automatically end the conversation. Rates run 6.3% to 35.99% APR on loans of $1,000 to $75,000, over a 36 or 60 month term.
The tradeoff is the origination fee, which can reach 12% and comes out of the money you receive. Read the number on your offer screen and compare the APR, not the interest rate, because the APR already folds that fee in. Checking your rate is a soft pull, so you can see your real offer without touching your score.
Upgrade
Upgrade is the better fit when the balance is large and the monthly payment is what is breaking you. Terms stretch to 84 months against Navy Federal’s 60, and on the same balance that difference can take a hundred dollars or more off what you owe each month. Rates run 7.74% to 35.99% APR on $1,000 to $50,000.
A longer term costs more in total interest, so it is a cash flow tool rather than a savings tool. Upgrade states the origination fee, 1.85% to 9.99%, before you accept, which is more than some lenders do.
SoFi
SoFi is the one to look at if your debt is bigger than most lenders will touch. It goes up to $100,000, which is double Navy Federal’s consolidation ceiling, and fixed rates run 6.49% to 35.49% APR once the autopay and member discounts are applied. Terms reach 84 months.
You will want a strong file to get the good end of that range. SoFi advertises no required fees, though the APR disclosure allows an optional origination fee of 0% to 7% if you choose that structure. Funding is not instant, so plan for a few business days.
Discover
Discover rounds out the comparison at 6.99% to 24.99% APR on $2,500 to $40,000, over 36 to 84 months, with no fees of any kind. That 24.99% ceiling is the second lowest here after Navy Federal, which makes it a reasonable middle option if your credit is fair rather than thin. We do not have a partnership with Discover, so there is nothing to click here. It is on the list because leaving it off would make the comparison less useful, not because we earn anything either way.
When a consolidation loan is the wrong tool
If every lender you try declines you, or the only rate you can get is higher than the cards you are trying to pay off, a new loan is not the answer. That usually means the balance is too big relative to your income, and moving it around will not change the math. At that point the honest options are a hardship plan with each card issuer, a nonprofit credit counseling agency, or settlement, and we compare the last of those in our roundup of the best debt relief companies. None of them are painless. All of them beat opening a loan you cannot service.
We used to list LendingClub here. It no longer belongs on a shortlist we stand behind, so we took it off rather than leave a stale recommendation sitting on the page.
FAQs
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.
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.
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
Navy Federal runs a genuinely good consolidation loan. No origination fee, no prepayment penalty, and an 18.00% ceiling that protects a weak credit file better than almost any online lender will. If you are already a member, get a quote here first.
If you are not a member and have no military connection, stop trying to force this one. The membership rule is not negotiable and there is no workaround worth your time. Pull a rate from one of the lenders above instead, compare the APR against the average rate on the cards you are carrying, and only move the debt if the new number is lower. Consolidating at a worse rate is just refinancing your problem into a longer one.
You cannot compare a consolidation loan to the cards you are carrying until you know the number. Upstart runs a soft pull, so finding out costs you nothing and leaves your score alone. Loans $1,000 to $75,000 at 6.3% to 35.99% APR, funded as fast as one business day after you accept.
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