Navy Federal Student Loan Refinance Review

Our Rating: C ⓘ (Compare)

Navy Federal may be a good option for current members and those who would like to join the credit union. Membership is open to residents of any state or Puerto Rico; some, such as certain military personnel, receive exclusive perks.

*This is the limit for parent and graduate school loans (with or without undergraduate loans included). Borrowers with undergraduate degrees may refinance up to $125,000.
†Lowest rates always include the 0.25% interest reduction for enrolling in auto-pay.

Skip to: Rates & Fees | Eligibility Requirements | Repayment Options | Consumer Reviews & Complaints | FAQ

‡Parent borrowers may consolidate loans for multiple children; they may also refinance before their student has graduated.

Navy Federal Refinance Rates & Fees

Navy Federal Credit Union offers fixed and variable rates. Note that the lowest rates always include the 0.25% interest reduction for enrolling in autopay.

Additional information about Navy Federal refinance rates:

• Checking your rate with Navy Federal will affect your credit score. They will conduct a hard, not soft, credit inquiry (learn the difference).
• Variable rates are based on the 90-day SOFR (5.31% as of this writing) as published by the Federal Reserve Bank of New York two (2) business days before the quarterly adjustment date.
• Variable rates are capped at 18.00%.

Navy Federal refinance rates recent history:

Over a two-year period (2022-2024), Navy Federal increased its highest and lowest available student refinance APRs by an average of 101%.

In 2023, Navy Federal’s lowest available fixed rate for new loans increased 24.7% (from 3.69% APR) while its highest fixed rate increased 3.1% (from 10.38% APR). The lowest available variable rate went up 47.9% (from 4.66% APR) and the highest starting variable rate increased just 17.9% (from 12.04% APR).

In 2022, Navy Federal’s lowest and highest fixed rates increased 23.4% and declined 15.5%, respectively; the lowest and highest available variable rates increased 189.4% and 15.0%.

Additional Fees

Beyond interest rates, there are a number of fees a refinance lender may charge up-front or during the loan servicing period. Below is a list of these fees that Navy Federal does or does not charge.

1. Application fee – fee to apply for rates & approval.
2. Loan origination fee – fee to create the new loan.
3. Disbursement fee – fee for distributing funds to lenders to pay off loans that have been refinanced.
4. Prepayment penalty – fee for making extra payments to reduce a refinance loan balance or pay it off early.
5. Late payment fee – fee for making a late payment. Navy Federal considers payments late once they are 15 days overdue. For Wisconsin residents, the late payment fee is the lesser of $10 or 5% of the overdue balance.
6. Returned payment fee – fee for failed payments due to insufficient funds, also known as a “bounced check”.
7. Collection fee – fee for collection activity on a defaulted debt.

Current Promotions & Offers

Navy Federal Credit Union offers a 0.25% interest rate reduction to borrowers who enroll to make automatic payments. Members of the credit union can take advantage of special offers with Navy Federal’s partners, including discounts and cash bonuses from Navy Federal as well as from their partnering corporations and organizations.

Navy Federal Refinance Eligibility Requirements

To qualify for refinancing with Navy Federal, all borrowers must meet the criteria below.

• Citizenship Requirement: U.S. citizenship or permanent residence.
• Income Requirement: a minimum $24,000 annual income -OR- at least $1,200 annual income with an eligible co-signer.
• Credit Score Requirement: no minimum score specified.
• Graduation Requirement: must have graduated from an eligible school; there is no graduation requirement to refinance parent loans.
• Location Requirement: 50 U.S. states and Puerto Rico.

Additional restrictions apply for specific individuals and loans.

• Undergraduates may refinance up to $125,000 in student loans.
• The minimum monthly payment is $50 or $25 with special permission.
• 21 months of credit history may be required.
• Borrowers are required to become members of Navy Federal Credit Union. Membership is not limited to the Navy, but it is restricted to:
  • Members of any branch of the U.S. military, including active duty members, members of the Delayed Entry Programs (DEP), officer candidates, reserves, and veterans, retirees, and annuitants.
  • Family members of any of the above, including parents, grandparents, spouses, siblings, children (including adopted and stepchildren), grandchildren, and household members.
  • DoD civilian employees, including contractors, retirees, and other U.S. government employees assigned to DoD installations.

Navy Federal Student Loan Repayment Options

Lenders vary greatly on the benefits and options provided to borrowers during the loan servicing period. Additionally, benefits may only be available on a case-by-case basis. Navy Federal offers some relief options.

Deferment & Forbearance

Navy Federal does not advertise an official forbearance or deferment policy, though the institution’s refinance loan disclosure does refer to “periods of forbearance and deferment.”^[1]

Navy Federal and LendKey may each allow borrowers to apply for deferments on a case-by-case basis and/or under certain undisclosed circumstances.

Additional Options

Navy Federal may offer other opportunities for relief or contract modification.

• Co-signer release may be available after 12 consecutive, qualifying payments.
• Death / disability discharge may be available in the unfortunate circumstance that a borrower passes away or suffers total permanent disability.

Navy Federal Reviews, Complaints & Lawsuits

Beyond our own findings, our team also collected the most genuinely insightful customer experiences we could find, including any instances of legal action against the company in which the details became public.

Navy Federal Online Reviews

Below are 3 samples of Navy Federal customer reviews we found on public forums, included here for their value as unedited, uncensored, and unsolicited user experiences. Note that these reviews are unverified, may include inaccuracies, and may provide outdated information (about rates, bonus offers, etc.).

“Navy Federal does not allow me to refinance my student loans with them because they “are not partnered with my school to verify graduation.” I think it’s absurd that I can’t refinance my loans through Navy. I was in the process of switching to Navy as my primary financial institution, but I don’t think I’ll be doing that. ” – Connor on Trustpilot, 6/4/2021

“I have been with NFCU for over 21 years. Did everything with them from my first time shared secured loan, auto loan, to mortgage loan, student loan, and then now working on my retirement portfolio. ” – Areeyah-Michaelaon Trustpilot, 4/29/2021

“I absolutely love navy federal. We have our mortgage, a student loan refinance and a used car loan through them.

They gave us the best rates on our student loan refi, and they’re generally easy to deal with. We just closed our [Big Bank] account last month and now do all our banking with them.” – KAT_85 on reddit, 5/2/2020

More (unfiltered) customer reviews of Navy Federal are available at TrustPilot.com (4.5 out of 5) and ConsumerAffairs.com (1.2 out of 5).

Navy Federal Consumer Complaints

As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB), a federal agency. As part of its mission, the CFPB allows consumers to log official complaints. These complaints are publicly available on the CFPB official website.

Since December 2, 2011, consumers have submitted 19,041 complaints about Navy Federal Credit Union (Navy Federal) to the CFPB for an approximate average of one (1) complaint every five (5) hours and 45 minutes; that complaint rate is over 200 times higher than the average daily complaint rate among reviewed lenders.

In 2023, Navy Federal received 4,335 complaints, which is equivalent to:

• 183.4% higher than Navy Federal’s average annual complaint rate.
• one (1) complaint for every $2.05 million in that year’s loan interest income.
• one (1) complaint for every 5 employees.

The allegations made in these complaints are unverified, are not necessarily representative of all consumers’ experiences with Navy Federal, and may contain outdated information (about rates, bonus offers, etc.). Note that a lender with a large customer base is likely to have a higher number of complaints when compared with smaller lenders.

Below we’ve included three (3) of the most recent complaints (as of this writing) regarding student loans, student loan refinancing, and/or debt collection in which the consumer consented to share their details.

Complaint 8497154
3/8/2024
Maryland

“XXXX XXXX XXXX is a third party company who, brought off a Navy Federal Credit Union Account from another 3rd party company from XXXX. The account is an old charge off from XXXX into XXXX with Navy Federal Bank. Who XXXX XXXX XXXX, states on a letter sent out XX/XX/XXXX that Navy Federal Credit Union is the original account owners. The 3rd party company in XXXX must have sold XXXXXXXX XXXX the Navy Federal Credit Union information as of XX/XX/XXXX in order for this XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXXXXXX XXXXXXXX XXXX XXXX to submit a threatening letter on a charged off account. The updated information on my credit report made it seem as if this is a brand new account but, its a charge off originated from another company. When I had no dealings with any third party companies in order for them to retrieve my social security number to update my credit report with their information. Which is a fraudulent attempt to collect a debt on a charged off collection account. The letter to receive monetary on an account that I never did business with their company nor has Navy Federal Credit Union contacted me in three years to dispute these actions. It would be considered fraudulent to input on my credit report they were a collection company I had an account with as of XXXX”

Complaint 8475676
3/5/2024
Arkansas

“Good day im XXXX XXXX I am here today seeking more help with 2 account listed on credit report and to show I have had several of my rights under Arkansas law and FDCPA VIOLALTED by Navy Federal Credit Union and XXXX XXXX XXXX. 1. I reached out to legal help to give myself protection in these scary times of companies garnishing my pay and forcing me to repay overpayment from past employer. Navy Federal Credit Union forced closed my accounts and a hard working man and have never been in any type of criminal mischief I was contacted by phone that my accounts were being closed because this company thought that my earning were from ill gains I was working upwards of 130 hrs a weeks and they accused me of not earning my funds legally I was told by Navy Federal representative I had a fee days to remove my funds from the account so I open up a new bank account with a new financial institution and called Navy Federal Credit Union to transfer my funds over to my new account I was told by the representative that I could not transfer my funds to a outside institution but I could only transfer funds to another Navy Federal member I reached out to several military buddies and was able to get one to assist me but he charged me a fee to transfer once funds were transferred i I called Navy Federal Credit Union to ensure that the accounts were closed and was told yes checking and saving was closed so I had a payroll deposit with a overpayment sent from an employer even after company immediately realized there mistake they tried to do a reverse of payment which caused me to owe the employers funds back so called Navy Federal Credit Union and asked to solve the situation and realizing my funds had been garnished by them I didn’t have any judgements against or even been contacted by any law group Navy Federal Credit Union bullied me and took those funds so I reached out to all 4 credit agencies to dispute items on credit reports companies being XXXX, XXXX, XXXX, XXXX and placed complaints with CFPB and Arkansas Attorney General not knowing at the time my consumer rights had been violated and under Arkansas Law and FDCPA 2. Under Arkansas law I was not forwarded the opportunity navy garnished fund and applied as they felt but under arkansas section 17-24-509 my rights were violated 3.17-24-509. Multiple debts. If a consumer owes multiple debts and makes a single payment to a debt collector with respect to the debts, the debt collector may not apply the payment to a debt that is disputed by the consumer and, if applicable, shall apply the payment in accordance with the consumer ‘s directions. My funds were garnished I feel most people really might not understand that have rights and these companies prey on the unknowing i am making a stand for myself and those other like me. As a resident of Arkansas I was never served with notice of garnishment. Definition of garnishment Garnishment refers toa court ordered process for collecting on a judgment, which takes money directly from the defendant ‘s wages or other third party who owes the defendant a debt. 2020 Arkansas Code Title 16 – Practice, Procedure, And Courts Subtitle 7 – Particular Proceedings And Remedies Chapter 110 – Attachment and Garnishment Subchapter 4 – Garnishment Proceedings 16-110-415. Garnishment of wages Universal Citation : AR Code 16-110-415 ( 2020 ) ( a ) Upon the garnishment of salaries, wages, or other compensation due from the employer garnishee, the employer garnishee shall hold, to the extent of the amount due upon the judgment and costs, subject to the order of the court, any nonexempt wages due or which subsequently become due. Again i was not forwarded any opportunity to communicate before funds were taken and my right were violated. Navy federal and sayer law firm bullied me with and judgment 15 U.S. Code 1673 – Restriction on garnishment ( a ) Maximum allowable garnishmentExcept as provided in subsection ( b ) and insection 1675 of this title, the maximum part of the aggregatedisposable earningsof an individual for any workweek which is subjected togarnishmentmay not exceed ( 1 ) 25 per centum of hisdisposable earningsfor that week, or ( 2 ) the amount by which hisdisposable earningsfor that week exceed thirty times the Federal minimum hourly wage prescribed bysection 206 ( a ) ( 1 ) of title 29in effect at the time theearningsare payable, whichever is less. In the case ofearningsfor any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect. Only after the funds were taken did navy federal and XXXX XXXX XXXX file for judgement after I filed for a dispute with XXXX, XXXX, XXXX and consumer financial protection bureau then after did navy federal file after the judgement shortly after I reached out to the Arkansas Attorney General office and received response back from navy federal via Arkansas Attorney General the judgement was dismissed by navy federal and XXXX XXXX XXXX I felt if it was a scare tactic to force and scare so that is the reason I reached out to Arkansas Attorney General office for assistance I feel i was violated and coercion tactics Definition of OPPRESS keep ( someone ) insubservienceandhardship, especially by theunjustexercise of authority. ” a system that oppressed working people ” These to company placed a judgemt against me and did not inform me of those actions and i was denied employment because checking my background they found I had a judgement pending and denied me employment has caused me financial hardship for them not following the law. 17-24-507. Unfair practices. ( a ) A debt collector may not use unfair or unconscionable means to collect or attempt to collect a debt. There Practices were in secret and unfair to me as a consumer. After findings of judgement I contacted the Arkansas Attorney General 2nd time and they stepped in the middle law suite was dismissed Navy Federal Credit Union and XXXX XXXX XXXX used deceptive means to cause fear and emotional damage to collect. 17-24-511. Furnishing certain deceptive forms. ( a ) It is unlawful to design, compile, and furnish a form knowing that the form would be used to create the false belief in a consumer that a person other than the creditor of the consumer is participating in the collection of or in an attempt to collect a debt the consumer allegedly owes the creditor, when in fact the person is not participating in collecting or attempting to collect the debt.”

Complaint 8446419
2/29/2024
Nevada

“Navy FCU has violated my consumer rights according to the FDCPA. Received a written settlement offer {$4200.00} which was sent to me on XX/XX/XXXX the letter is missing the key element of any contract which is the expiration or due by date. On XX/XX/XXXX I received a Federal income tax deposit of {$9900.00} they saw the amount and seized it from my personal checking account at XXXX XX/XX/XXXX. On XX/XX/XXXX @ XXXX : XXXX XXXX I called the number provided to me by Navy FCU to be connected to a Recovery unit/collection department. Made contact with a representative and advised her that they removed my income tax refund from my account. She responded yes we did, it was to recover a charged off credit card debt. Remind you they answered as Navy FCU not any 3rd party, so Im under the impression there is no collection department Im speaking with a rep from Navy Recovery. Absolutely no mention of any attempt to collect a debt on navy behalf just straight to the point we took the money because you owe us for a charged off amount. My reply so you guys monitored my account with full intentions on transferring out all of my refund to other which it reads on my statement, immediately upon deposit without notice. She said yes we have a clause in our contract that states we can collect any outstanding credit card or loans without notice. Livid and almost lost my soul that they snatched almost {$10000.00} from me, I cried my life away explaining to her that she can clearly see that I just got the letter and no previous attempts were being mailed to me trying to collect this debt that they charged off, its not even correct on my credit report. Navy FCU just sent me a a settlement notice on XX/XX/XXXX with no timeline or additional terms stating if I dont reply by expiration the offer can change or cancel. I said this is not the proper way to operate or conduct legal debt collection per the state of XXXX. She agreed to honor the settlement offer I received and credit the remainder back to my checking account however she did not want to honor the {$4200.00} that navy sent less than 30 days ago as in the settlement offer with no due by date. XXXX XXXX, misrepresented the amount by adding {$1000.00} more to the settlement offer. She immediately also recovered another account that had a small balance which settlement offer was written as {$640.00} She took increased the offer without notice or reason to {$790.00}. I asked why am I being charged extra she she said because she is rounding it up 50 % I said but thats not the written offer and you should honor whats in writing she said I dont have to give you the credit back so I just cried cause she was using my weakness to humiliate me so I just thanked her for doing it and advised that I feel like they just watched my account purposefully, all the other deposits were never touched before this large deposit. I asked to speak to a supervisor and was advised no one is available. XX/XX/XXXX at XXXX XXXX now they are trying to reverse the settlement offer and take the credited money back but I already transferred it out of the account. This is retaliation for reciting that she is in violation of FDCPA. This cant be legal. * Failed to disclose in the initial communication with the consumer that the debt collector is attempting to collect a debt and any information obtained can be used for that purpose.”

For a full list of complaints made against Navy Federal in the CFPB’s Consumer Complaint Database, click here.

Navy Federal Lawsuits

Navy Federal Credit Union has recently faced legal action regarding how the institution issues fees for returned checks or insufficient/nonsufficient funds (NFS). In addition, their collection practices have also been the subject of federal investigation. Note that while this information is updated regularly, ongoing legal action is subject to change.

Ruby Lambert v Navy Federal Credit Union, Case No. 1:19-cv-00103-LO-MSN

In April 2021, a U.S. District Court judge ruled that Navy Federal Credit Union was obligated to pay $16 million in a class action lawsuit to credit union members who were charged Represent non-sufficient funds (NSF) fees between January 28, 2014 and October 27, 2020. Beneficiaries to the settlement have been advised they will receive their payments automatically.^[2][3]

Lloyd, et al. v. Navy Federal Credit Union, Case No. 17-cv-1280

Jenna Lloyd sued Navy Federal in 2019 on behalf of herself and other current and former members alleging the institution “breached its contract with member checking Account Holders and improperly assessed and collected Overdraft Fees on certain transactions.”^[4] The following year, a judge ordered Navy Federal to pay a total of $25 million (or 0.30% of annual corporate revenue, 0.02% of corporate assets) for reimbursements and legal fees.^[5] Current account holders were reimbursed via direct deposit in January 2021, and checks to former account holders were posted on February 24, 2021.

Consumer Financial Protection Bureau Charges

In 2016, the Consumer Financial Protection Bureau (CFPB) investigated Navy Federal and found that the credit union had violated the Dodd-Frank Wall Street Reform and Consumer Protection Act.^[6] The CFPB charged that between 2013 and 2015, Navy Federal Credit Union falsely threatened legal action and wage garnishment, falsely threatened to contact commanding officers of the U.S. military, misrepresented the consequences of overdue payments on a line of credit, and illegally froze members’ funds and account access. Navy Federal was fined $28.5 million (or 0.04% of corporate assets at the time); this included a $5.5 million civil penalty and $23 million to compensate affected consumers. Those who received a letter threatening to contact their commanding officer received at least $1,000 in compensation.^[7]

Frequently Asked Questions

These are the most common questions consumers have about student loan refinancing with Navy Federal.

• Is Navy Federal good for refinancing student loans?
  Navy Federal may be a good option for current members and those who would like to join Navy Federal Credit Union. Membership includes exclusive perks; some of these are extended just to particular members, such as certain military personnel.

• Does Navy Federal have a minimum credit score requirement to refinance student loans?
  Navy Federal does not disclose a minimum credit score to qualify for student loan refinancing.

• Are Navy Federal loans federal?
  Navy Federal loans are not federal. Navy Federal has no affiliation with the federal government or the U.S. Department of Education.

• Does Navy Federal charge a prepayment penalty?
  There are no penalties for early payments or repaying a loan in full before its term is over.

• Does checking your rates with Navy Federal hurt your credit score?
  Yes, checking your rates with Navy Federal may impact your credit score.

• Is Navy Federal a bank?
  Navy Federal, while offering many of the same financial services that a traditional bank does, is a credit union with limited membership eligibility.

• Can I refinance a Navy Federal loan?
  You can refinance Navy Federal student loans, student loans from another private lender, and federal loans. There is no limit to the number of times a borrower may refinance with Navy Federal. Note, however, that every new line of credit requires a hard credit check that may affect your FICO score.

• Can I refinance just some of my loans with Navy Federal?
  Yes, you can refinance some, all, or just one of your qualifying student loans with Navy Federal. You may choose to refinance your private loans only or refinance private and federal loans together.

• Can I refinance loans that have already been refinanced?
  Yes, you can refinance loans as many times as you want with Navy Federal. Note that each time you refinance, you will have to submit a new application; every application requires a hard credit check that may affect your credit score.

• Can my spouse and I refinance our loans together with Navy Federal?
  Navy Federal does not offer joint refinancing.

• How long does it take to refinance with Navy Federal?
  Navy Federal does not offer a timeline. Approved loan offers are valid for 30 days.

• Who services Navy Federal refinance loans?
  Navy Federal services all their own refinance loans.

• Does Navy Federal offer a grace period?
  Navy Federal does not offer a grace period but may honor an existing grace period.

• How often do variable rates change?
  Navy Federal updates variable rates every 90 days for a total of four (4) times per year.

• Can I get any special rates or discounts with Navy Federal?
  Navy Federal Credit Union offers a 0.25% interest rate reduction to borrowers who enroll to make automatic payments. Members of the credit union can take advantage of special offers with Navy Federal’s partners, including discounts and cash bonuses.

• What happens if I file for bankruptcy?
  Navy Federal specifies that borrowers who declare bankruptcy may still be obligated to repay their loan.

• Does Navy Federal partner with any major student refinance lender marketplaces?
  Navy Federal partners with LendKey.

Compare Student Loan Refinance Reviews

Sources

1. Navy Federal Credit Union (Navy Federal), Private Education Loan Application and Solicitation Disclosure Form: Refinance Loans
2. Credit Union Times, Federal Judge Grants Final Approval Over Navy Federal’s $16 Million Class Action Suit
3. JND Legal Administration, Lambert Representment NSF Fee Settlement: Frequently Asked Questions
4. NFOverdraftLitigation.com, Lloyd v. Navy Federal Credit Union Settlement
5. Navy Federal, 2020 Annual Report
6. Consumer Financial Protection Bureau, CFPB Orders Navy Federal Credit Union to Pay $28.5 Million for Improper Debt Collection Actions
7. Annual Report Owl, Navy Federal Credit Union 2015 Annual Report Download
8. Navy Federal, Rates & Terms