Drivers typically save an average of $137* per month, adding up to $1644* annually, when they refinance their Navy Federal Credit Union loan. Switch your auto loan carrier.
Let’s first look at Navy Federal Credit Union and its auto loan business.
Want to see how other drivers have rated their experience with Navy Federal Credit Union? We’ve compiled links to some of the sites where you can find customer feedback about Navy Federal Credit Union.
Navy Federal Credit Union auto loan reviews:
Whether you have held an auto loan from Navy Federal Credit Union for a few years or even just a few days, there are potential benefits to refinancing that loan that you should consider.
An auto loan can be refinanced multiple times over the course of owning a car. Whether you originated your vehicle financing with Navy Federal Credit Union or replaced your original loan with one from them, you can still opt to explore other loan providers that may be able to offer a more competitive pricing that saves you money.
If you are considering replacing your current auto loan with Navy Federal Credit Union for another that offers greater affordability, one of the first things you should investigate is what your current loan agreement says about ending the loan early. Look over your loan documents for any clauses that cover prepayment, and specifically prepayment penalties. If your Navy Federal Credit Union auto loan includes a prepayment penalty fee, it’s wise to take that cost into account when weighing your refinance options.
Many states limit what a lender can charge borrowers in prepayment penalties; typically, the maximum fee drivers may face is 2% of the remaining loan balance. For example, say you owe $10,000 on your car loan and your agreement has a 2% prepayment penalty fee in place; your lender may levee a $200 charge when you pay off the loan by refinancing. You can contact Navy Federal Credit Union to get more guidance on what if any prepayment penalty you would face in the event you pay off your auto loan before it is set to end.
A critical question when it comes to refinancing: Can I save money over my current loan by switching? To answer this with confidence, you need to shop around for loan offers from a range of providers. A nationwide lender marketplace like the one built by RateGenius gives drivers access to a broad selection of providers that support a spectrum of credit profiles. Engaging with RateGenius may improve your odds of securing terms that are more competitive and affordable than those offered by your Navy Federal Credit Union auto loan. Plus, you apply for financing through the RateGenius platform but get exposure to multiple financial institutions at once, saving you time and effort.
When you refinance your vehicle loan from Navy Federal Credit Union, you have the chance to add, upgrade or remove forms of vehicle protection plans. It’s possible that your Navy Federal Credit Union was sold with a vehicle service contract (VSC) or guaranteed asset protection (GAP). VSC works like a warranty, shielding you from out-of-pocket repair and maintenance costs as your car ages. GAP offers drivers financial protection against owing more on their car loan than the vehicle is worth in the event of theft or a total loss due to damage such as from a serious accident.
It's possible that you can add affordable protections like GAP and VSC as part of refinancing your auto loan, where you keep your monthly payment on par with what it is currently. If you already have these coverages built into your Navy Federal Credit Union auto loan, you might be able to swap those products for more affordable options.
Once you are ready to move forward with refinancing, the next step is to submit your credit application. You can apply directly to a lender, or, as noted above, access a lender marketplace through a platform like RateGenius, where your application is presented to multiple lenders.
The application for an auto loan consists of questions about you, your finances, and your vehicle. You’ll also be asked if you wish to include a co-borrower on the loan. It’s important to be careful to provide complete and accurate information. It’s common for the entity taking your application to request copies or photos of documentation from you that verifies your identity and income (usually your driver’s license and paystubs from your employer), along with your car’s registration and proof of insurance. Gathering these materials ahead of time can make the application process go faster.
With your application submitted, lenders conduct their review to determine if you qualify for refinancing based on their lending standards. At this point in the process a “hard” inquiry, or hard pull, is made by the lender to access your credit report. This report tells them about your creditworthiness and plays an important part in how lenders evaluate your application.
You can access your credit report for your own review for free once a year from each of the big three credit bureaus, Experian, TransUnion and Equifax. It’s a good habit to check your credit report so you can spot and correct any errors. This is especially important to do before your credit report is pulled by a potential lender as part of any credit application, since you don’t want any negative incorrect information to harm your chances of approval or scoring a competitive rate.
If approved, the lender will provide you with a loan offer outlining the terms, interest rate, and repayment structure.
Review the offer carefully. Ask questions so you fully understand the terms. If you find the loan offer acceptable, you can formally accept it by signing the necessary documents.
You’ve accepted the new lender’s loan offer and are moving forward. Next, they pay off your existing auto loan with Navy Federal Credit Union.
It’s often the case with refinancing an auto loan that there are no payments due by you to your new lender for 45 days after closing. That said, before the changeover to the new lender is finalized, you should not stop paying the bills coming from Navy Federal Credit Union.
By now you’ve reached the end of the refi process and your old loan with Navy Federal Credit Union is in the rear-view mirror. You should expect your new lender to provide instructions on how to start making payments on the new loan.
There are several factors that call help tell you whether it’s the right time for you to refinance.
Generally, a new auto loan provider won’t be interested in assuming your auto loan from Navy Federal Credit Union through refinancing if the remaining balance on the loan is below $10,000.
When you apply to refinance, the lender will also compare your car’s value to the remaining loan balance. This is called the loan-to-value ratio, or LTV. But unlike refinancing a mortgage, you can still qualify for auto loan refinancing even if you owe more than the car is worth. The general LTV maximum around 130%.
To calculate LTV, divide the current remaining balance by the car’s market value. For example, let’s say you owe $15,000 on a car that is worth $13,000. In this case, the LTV is approximately 115%; that factor alone isn’t likely to be disqualifying.
Interest rates fluctuate over time based on economic forces. If the interest rate environment becomes more favorable compared to when you secured your current auto loan from Navy Federal Credit Union, there could be an opportunity to refinance at a lower rate.
Improvements to your credit score over time may put you in a position to receive more affordable loan terms from lenders. A borrower who has a history of paying bills on time and following other good credit habits pose less of a risk to lenders and may be eligible for more competitive rate offers. So, if your own credit score has seen a substantial uptick since you closed on your Navy Federal Credit Union auto loan, it may be an opportune time to seek a new loan with a more affordable rate.
Many drivers refinance their auto loan to lower their monthly payment. The goal may be to free up room in their budget for other expenses, or to set aside more cash. Reducing your interest rate through refinancing is one lever to potentially lower your monthly payment. But it’s also possible to secure a lower payment without necessarily locking in a lower rate; extending the term of your auto loan can have the effect of spreading the cost across a longer timeline, leading to a smaller monthly bill. Just note that with a term extension, you may end up paying more in interest over the life of the loan, all else being equal.
Alternatively, some borrowers take advantage of refinancing to shorten the length of their auto loan by accelerating payoff. If your income has grown since you took out the loan from Navy Federal Credit Union, you may be in the position to make larger payments. Maybe you started with a five-year (60-month) loan and have four years left. Now you want to clear the debt from your balance sheet sooner. You could roll into a three-year (36-month) loan by refinancing and close out the loan in a year’s less time.
You generally need to have a clean vehicle title to refinance. You can pull a copy of the title from your state’s bureau of motor vehicles to see if it’s clean.
Many auto loan providers have restrictions on the age and mileage of vehicles they will provide financing for. Lenders’ policies vary, but in general if the car you wish to refinance is older that 10 years or has logged more than 100,000-150,000 miles, you may have difficulty finding a lender that will assume its loan. An auto loan typically is a secured form of credit, like a mortgage, where the car is the collateral. Because older and high-mileage cars have already expended a large portion of their value, a lender isn’t as likely to want to accept that car as loan collateral.
What kinds of savings can drivers expect when they swap out their auto loan from Navy Federal Credit Union for a new on by refinancing? There are a lot of factors that influence the answer. But looking at averages helps provide general guidance.
Last year, drivers who refinanced their auto loans through RateGenius lowered their monthly payment by $137* per month. That means what they paid for their auto loan decreased on an annual basis by $1644*. This is calculated by taking the average monthly payment savings of all the loans that were funded by RateGenius customers during the calendar year. Those customers decreased their interest rate by an average of 3.42%.
Here’s a short checklist that can help you navigate your refinance.
To jumpstart your auto loan refinance, consult providers you’re interested in. RateGenius is a loan marketplace that connects drivers with 150+ lenders across the country. RateGenius lets you explore offers easily with one application that reaches multiple institutions. Applying takes just a few minutes, and experienced RateGenius loan specialists are available to help guide you through the loan process, every step of the way.
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