Navy Federal offers auto refinancing to members with existing car loans from other lenders
Navy Federal Credit Union, the largest military-affiliated credit union in the United States, allows current members to refinance car loans they hold elsewhere. Refinancing means taking out a new loan through Navy Federal to pay off your existing car loan balance, typically to find a lower interest rate or change your loan terms. Navy Federal members can refinance vehicles they already own, whether the original loan came from a bank, another credit union, or a dealership.
The process is straightforward: you contact Navy Federal, provide details about your current loan and vehicle, receive a rate quote, and if you proceed, Navy Federal pays off the old loan and you begin making payments to them instead. The main reason people refinance is to lower their monthly payment or reduce the total interest paid over the life of the loan, though some refinance to extend the loan term or to remove a co-borrower.
Key Takeaways
- Navy Federal refinancing is open only to current members; you must have an existing Navy Federal account or join before you can refinance.
- You can refinance a car loan from any lender, but Navy Federal will only finance vehicles that are paid off or have a lien that can be released.
- Your interest rate depends on your credit score, the age and condition of the vehicle, and current Navy Federal rates for auto loans.
- The refinance process typically takes one to two weeks from process to funding, though Navy Federal can sometimes close faster.
- Refinancing makes sense when Navy Federal's rate is lower than your current rate, even after accounting for any fees or the cost of a new appraisal.
Membership requirements and who can refinance
You must be a Navy Federal member to refinance through them. Membership is open to active-duty military, retirees, veterans, Department of Defense civilians, and their families. If you are not yet a member, you can join online or at a branch; membership is free and typically takes a few minutes to complete. Once your account is open, you are when ready may be able to access to explore for refinancing.
Navy Federal will refinance vehicles you own outright or vehicles with an existing loan balance. The vehicle must be a passenger car, truck, or SUV; Navy Federal does not refinance motorcycles, RVs, boats, or commercial vehicles. The car must be no more than 10 years old at the time of refinancing, though Navy Federal occasionally makes exceptions for well-maintained vehicles with lower mileage.
How Navy Federal's auto refinance rates work
Navy Federal publishes a range of auto loan rates rather than a single rate. Your actual rate depends on several factors: your credit score, the age and mileage of the vehicle, the loan term you choose, and whether you make a down payment. Members with excellent credit (typically 750 and above) receive the lowest rates; members with fair or poor credit pay higher rates. Navy Federal also offers slightly better rates to members who set up automatic payments from a Navy Federal checking account.
You can check current rate ranges on Navy Federal's website without providing personal information. To receive a personalized rate quote, you will need to provide your Social Security number, income, and details about the vehicle and your current loan. Navy Federal pulls a soft credit inquiry for the initial quote, which does not affect your credit score. If you decide to move forward, they pull a hard inquiry, which does appear on your credit report.
Steps to refinance your Navy Federal auto loan
Start by gathering information about your current loan: the lender's name, your loan balance, your current interest rate, and your monthly payment. You will also need the vehicle's year, make, model, mileage, and VIN (vehicle identification number). Have this information ready when you contact Navy Federal.
Contact Navy Federal through their website, phone, or in person at a branch. Request an auto refinance quote and provide the details above. Navy Federal will calculate how much you would save by refinancing and show you the new monthly payment under different loan terms (typically 36, 48, 60, or 72 months). Review the quote carefully; the savings should account for any appraisal fees or title transfer costs.
If you decide to proceed, Navy Federal will order a vehicle appraisal (usually $50 to $150, sometimes waived for members) and pull a hard credit inquiry. Once approved, Navy Federal issues a check or electronic transfer to your current lender to pay off the old loan in full. You then begin making payments to Navy Federal. The entire process from process to funding typically takes 7 to 14 days.
When refinancing saves you money and when it does not
Refinancing saves money when Navy Federal's interest rate is meaningfully lower than your current rate. A rate drop of 1 to 2 percentage points usually justifies refinancing, even after accounting for appraisal fees. A drop of 0.5 percentage points or less may not be worth the time and cost, depending on how much time remains on your current loan.
Refinancing also makes sense if you want to shorten your loan term and can afford the higher monthly payment. For example, if you have 5 years left on your current loan at 6% interest, refinancing into a 3-year Navy Federal loan at 4% interest will save you money and get you out of debt faster. Conversely, refinancing to extend your loan term (say, from 48 months to 72 months) lowers your monthly payment but increases the total interest you pay over time.
Refinancing does not make sense if you are underwater on your loan—meaning you owe more than the vehicle is worth. Navy Federal will not refinance a loan balance that exceeds the vehicle's appraised value. If you are close to being paid off, refinancing may also cost more in fees than you save in interest.
Documents and information Navy Federal will request
Navy Federal will ask for proof of income (recent pay stubs or tax returns), proof of residence (utility bill or lease), and your driver's license or military ID. You will also need to provide the current loan documents or account number so Navy Federal can verify the payoff amount with your current lender. Have your vehicle's title or registration available; Navy Federal will need to confirm the vehicle's ownership and lien status.
If the vehicle has a lien (meaning your current lender holds the title), Navy Federal will contact the lender directly to arrange the payoff and title transfer. This process is handled by Navy Federal and your current lender; you do not need to contact them yourself. Once the old loan is paid off, the lien is released and Navy Federal's lien is recorded on the title.
Comparing Navy Federal refinancing to other options
Other credit unions, banks, and online lenders also offer auto refinancing. Navy Federal's rates are often competitive, particularly for military members, but not always the lowest available. If you are a member of another credit union or bank, check their rates before committing to Navy Federal. Online lenders like LendingClub, Upgrade, and SoFi also refinance auto loans and sometimes offer faster approval.
The main advantage of refinancing through Navy Federal is the member relationship: if you already bank there, the process is simpler and you may receive member-only discounts or rate reductions. Navy Federal also does not charge prepayment penalties, so you can pay off the loan early without extra fees. If you are not a Navy Federal member and do not plan to be, another lender may be faster or cheaper.
Frequently Asked Questions
Can I refinance a car loan if I still owe money on it?
Yes. Navy Federal will refinance the remaining balance of your current loan. The new Navy Federal loan pays off the old loan in full, and you then owe Navy Federal instead of your previous lender. The vehicle must not be worth less than the amount you owe.
How long does Navy Federal refinancing take?
From process to funding typically takes 7 to 14 days. The appraisal usually takes 3 to 5 days, and underwriting takes another few days. Navy Federal can sometimes close faster if the appraisal is completed quickly and there are no issues with the process.
What if my credit score has dropped since I got my current loan?
Navy Federal will pull your current credit score and offer a rate based on that score. If your credit has declined, your Navy Federal rate may be higher than your current rate, making refinancing a poor choice. You can still request a quote to compare, but you are not obligated to proceed.
Does Navy Federal charge a prepayment penalty if I pay off the loan early?
No. Navy Federal auto loans have no prepayment penalty, so you can pay off the loan ahead of schedule without extra fees. This is one advantage of refinancing through Navy Federal rather than some other lenders.
What happens to my old loan if Navy Federal approves my refinance?
Navy Federal pays off your old loan in full using the funds from your new loan. Your previous lender closes the account and releases the lien on the vehicle. You will receive a final statement from your old lender showing a zero balance. You then owe only Navy Federal.