Navy Federal Credit Union is a private lender that offers student loans to its members. To become a member of the Navy Federal Credit Union, you must either be a service member or veteran, a civilian working for the Department of Defense, or an immediate family member of a current member of the credit union. Navy Federal Credit Union only offers student loans to borrowers who belong to its credit union.
Starting in 2015, Navy Federal began offering private student loans. It offers both variable and fixed interest rate loans. To offer these loans, Navy Federal has partnered with LendKey, a student loan refinancing company.
Private Student Loan Details
Navy Federal currently offers variable rate loans with annual percentage rates (APR) as low as 4.00 percent. These loans are offered in amounts ranging from $2,000 up to $120,000 per year, or up to $160,000 per year for graduate students. The loan term is ten years. This amount for the student loan must be certified as the cost of attendance by your college or university.
Navy Federal allows students to make interest-only payments or a nominal $25 proactive payment each month on their student loans while in school. There are no origination fees, and the student loans can be canceled within thirty days of disbursement with no fees or interest.
For graduates, there is a .25 percent rate reduction for signing up for automatic payments. In addition, for student borrowers who utilize a cosigner, the cosigner can be released from the student loan obligation after the primary borrower makes 24 consecutive on-time principal and interest payments during the repayment period.
Navy Federal also offers fixed interest rate student loans to its borrowers. The APR for these loans is currently as low as 5.58 percent. As with the variable rate loans, fixed rate loans are available in ten year terms, and can be taken out in amounts ranging from $2,000 up to the cost of attendance, with a maximum of $120,000 (or $160,000 for graduate students). The other terms and conditions for fixed interest rate loans, such as making interest only payments or nominal $25 payments while in school, are the same as for variable rate loans.
To qualify for a private student loan, variable or fixed, through Navy Federal, you must first be a member of the Navy Federal Credit Union. You must also be enrolled in an eligible school, and pursuing a degree program on at least a half-time basis. An applicant and/or cosigner must be a U.S. citizen or permanent resident, and must have sufficient creditworthiness to be approved for the loan.
Benefits to Borrowing from Navy Federal
Navy Federal offers benefits to all of its members, such as competitive interest rates, no origination fee (which is typically a percentage of the total cost of the loan), no application fee, and the ability to cancel your loan within thirty days of disbursement without any interest or fees.
In addition, the ability to reduce your interest rate by .25 percent for signing up for automatic payments can help you save significant money over the life of your loan. Finally, while it may be difficult for many students to make interest-only payments or a $25 per month payment while in school, this can help you reduce the total amount of your loan upon graduation, and set a good habit for making the full monthly payments once you have left school.
While federal student loans are often preferred to private student loans, borrowing from a private lender such as Navy Federal has its advantages. With competitive rates and the ability to borrow up to the cost of attendance, obtaining a student loan through Navy Federal can help a student go to the college of his or her dreams.
Unlike federal student loans—which have relatively low limits on the amount that can be borrowed—Navy Federal allows borrowers to take out enough loans to fully fund their education. Depending on your credit history, the rates may be low enough to make it an affordable option for many borrowers.