What Navy Federal Refinancing Means and Who Can Do It
Navy Federal Credit Union lets you refinance a car loan — meaning you replace your current loan with a new one, usually at a lower interest rate or with different terms. The new loan pays off the old one completely, and you start making payments to Navy Federal instead of your original lender. This works whether your current car loan is with Navy Federal or another bank, credit union, or lender.
To refinance through Navy Federal, you must be a member of the credit union. Membership is open to active-duty and retired military, veterans, Department of Defense civilians, and their families. If you are not yet a member, you can open an account before you refinance. The car itself must be financed (not paid off), registered, and typically no more than 10 years old, though Navy Federal's exact age limits vary by vehicle type.
Key Takeaways
- Navy Federal refinancing replaces your current car loan with a new one from the credit union, and you need to be a Navy Federal member to start.
- The main reason to refinance is a lower interest rate, which reduces your monthly payment or the total interest you pay over the life of the loan.
- You will need your current loan details, vehicle information, proof of insurance, and a recent credit report to move forward.
- The process typically takes one to two weeks from process to funding, and Navy Federal will contact your old lender directly to pay off the balance.
- Refinancing makes sense when your credit score has improved since you took out the original loan, or when market rates have dropped.
When Refinancing Through Navy Federal Makes Financial Sense
Refinancing saves you money only if the new interest rate is lower than what you are currently paying. Navy Federal publishes its current auto refinance rates on its website, and those rates depend on your credit score, the age and mileage of the vehicle, and how much you still owe. If Navy Federal's rate is higher than your current rate, refinancing will cost you more, not less.
The second reason to refinance is to change your loan term. If you have five years left on a seven-year loan and want to pay it off faster, you can refinance into a shorter term — though your monthly payment will go up. Conversely, if your payment is too high, you can refinance into a longer term to lower it, though you will pay more interest overall.
Refinancing also makes sense if your credit score has improved significantly since you took out the original loan. Lenders use your credit score to set your rate, so a higher score now can unlock a better rate than you received before. Check your credit report before you contact Navy Federal to understand what rate you might receive.
Documents and Information You Will Need to Gather
Before you contact Navy Federal, collect the following: your current loan account number and the name of your current lender, the vehicle identification number (VIN) from your registration or title, the current mileage, and your proof of auto insurance. Navy Federal requires active insurance before they will fund the refinance.
You will also need to know the current payoff amount on your existing loan — the exact balance you owe right now, not your monthly payment. Call your current lender or log into your account online to find this figure. Navy Federal will verify it when you explore, but having it ready speeds up the process.
Have a recent credit report available if possible. You can view your free credit report once per year at annualcreditreport.com. Knowing your credit score beforehand helps you understand what rate Navy Federal is likely to offer and whether refinancing will actually save you money.
How to Start the Refinancing Process With Navy Federal
Log into your Navy Federal online account or call their auto lending department at 1-888-842-6328. You can also visit a branch in person if you prefer to speak with someone face-to-face. Navy Federal offers refinancing applications online, by phone, and in branch — choose whichever is most convenient for you.
During the process, you will provide your vehicle details, current loan information, and personal financial information. Navy Federal will pull your credit report as part of the process. This is a hard inquiry, which temporarily lowers your credit score by a few points, but the impact is small and temporary.
Navy Federal will give you a rate quote and show you the new monthly payment and total interest you would pay. Review these numbers carefully. If the rate is lower than your current rate and the monthly payment works for your budget, you can move forward. If not, you can decline without penalty.
What Happens After You Are Approved
Once Navy Federal approves your refinance, they will contact your current lender directly to request the payoff amount and arrange payment. You do not have to call your old lender yourself — Navy Federal handles this step. The payoff process typically takes three to five business days.
During this time, continue making payments to your current lender as usual. Do not stop paying until you receive confirmation that the old loan has been paid off. Missing a payment, even during the refinance process, can damage your credit and may cause the refinance to fall through.
Once the old loan is paid off, Navy Federal will send you new loan documents and payment instructions. Your first payment to Navy Federal will be due on the date specified in those documents, which is usually 30 to 45 days after the loan funds. Set up automatic payments through Navy Federal's online banking to avoid missing a payment.
Costs and Fees Associated With Navy Federal Refinancing
Navy Federal does not charge an origination fee, process fee, or prepayment penalty for auto refinancing. This means you will not pay extra money upfront to refinance, and you can pay off the loan early without being penalized.
However, your old lender may charge a prepayment penalty if your original loan included one. This is rare with auto loans, but it is worth checking your original loan documents or calling your lender to ask. If a prepayment penalty exists, Navy Federal will factor it into the payoff amount, and you will pay it as part of the refinance.
The only cost you may encounter is if you need to update your vehicle registration or title to reflect the new lender. This varies by state and is usually a small fee paid to your state's motor vehicle department, not to Navy Federal.
What to Do If Your Refinance process Is Declined
Navy Federal may decline your process if your credit score is too low, the vehicle is too old or has too many miles, or you owe more than the vehicle is worth. If this happens, ask Navy Federal why you were declined — they are required to tell you the specific reason.
If the issue is your credit score, you can work on improving it over the next few months and reapply. If the issue is the vehicle's age or mileage, refinancing through Navy Federal may not be an option, but other lenders have different requirements. If you owe more than the car is worth, refinancing will not help because the new lender will not lend more than the vehicle's value.
You can also ask Navy Federal whether a co-signer would help your process. A co-signer with better credit can sometimes allow you to refinance even if you would not be approved on your own, though this puts the co-signer on the hook if you miss payments.
Frequently Asked Questions
How long does the entire refinancing process take from start to finish?
Most refinances complete within one to two weeks. The process and approval usually take one to three business days, and the payoff of your old loan takes another three to five business days. Once the old loan is paid off, Navy Federal funds the new loan within one to two business days.
Can I refinance a car I still owe money on?
Yes, that is the entire point of refinancing. You refinance the remaining balance on your current loan. If you have paid off your car completely, you cannot refinance it through Navy Federal because there is no loan to replace.
Will refinancing hurt my credit score?
The hard inquiry Navy Federal pulls will lower your score by a few points temporarily. However, refinancing actually helps your credit long-term because it replaces an old loan with a new one, which can improve your credit mix. The temporary dip disappears within a few months.
What if I want to pay off my Navy Federal refinance early?
Navy Federal does not charge a prepayment penalty, so you can pay off the loan early without any extra fees. You can make extra payments toward principal at any time through your online account or by calling their customer service line.
Can I refinance if I am behind on my current car loan payments?
Most lenders, including Navy Federal, will not refinance a loan if you are currently behind on payments. You will need to bring your account current first. Once you are up to date, you can then explore to refinance.