USAA vs. Navy Federal: Which Offers Better Auto Loans?

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USAA and Navy Federal Credit Union provide banking and lending solutions to U.S. military members, veterans and qualifying relatives. Both lenders operate in all 50 states.

However, USAA offers flexible payment options and more robust payment relief. Navy Federal features loans with longer terms and a car-buying service to help simplify the shopping and financing process.

USAA vs. Navy Federal Credit Union at a glance

You’ll find attractive APRs (annual percentage rates) and generous loan limits with both USAA and Navy Federal. Weigh each lender’s perks to decide which is best for you.

USAA auto loans

Navy Federal auto loans

How to choose between USAA and Navy Federal Credit Union

Both lenders only lend to servicemembers, veterans, their spouses and qualifying relatives. If you don’t meet those requirements, compare other auto loan rates to find a better fit.

APR range

Neither lender discloses its maximum APR online. Because there is no prequalification option with either company, you must formally apply (and accept a hard credit inquiry) to view your rates. If you have excellent credit, both Navy Federal and USAA offer best-in-class minimum APRs.

Keep in mind that Navy Federal also charges relatively high interest rates for older models. While this isn’t unusual for lenders, any vehicle that’s 20 years or older will have a rate that’s at least five percentage points higher than the new car rate.

Minimum credit score

Neither lender discloses its credit requirements. But as with most lenders, the higher your credit score, the better your interest rate will be. If you have a short credit history or a low score, consider looking at bad credit auto loan rates. These lenders tend to have more flexibility in terms of acceptance criteria.

Repayment terms

Both lenders offer fairly lengthy loan terms, with Navy Federal offering terms of up to 96 months versus 84 months with USAA. However, an eight-year loan term can be risky and expensive — even with a low auto loan rate, you’ll spend a significant sum on interest over the life of the loan.

Although USAA has slightly shorter repayment terms than Navy Federal, it offers some unique perks. USAA borrowers have the flexibility to make loan payments at their convenience, as you can pay every two weeks or monthly. Making biweekly payments can help you pay off your loan faster and save on interest.

Loan amount

USAA auto loans start at $5,000, but lower loan amounts require shorter repayment terms. You must borrow at least $15,000 to receive a 72-month term, or over $25,000 to qualify for an 84-month term.

Navy Federal takes a similar approach, requiring a loan amount of at least $30,000 to qualify for a term longer than 84 months. However, Navy Federal is the clear winner if you’re looking to finance a very inexpensive vehicle — it offers loans as small as $250.

Fees

Navy Federal doesn’t disclose all potential fees, though it does mention a $29 fee for late payments and doesn’t charge for returned loan payments.

USAA doesn’t charge loan application fees or prepayment penalties. The lender is less transparent about its other fees, like those for late or returned payments, but these charges are fairly standard among auto lenders.

Bottom line: Which lender is best?

It can be challenging to choose between the two, as both offer attractive incentives that make them worth considering. USAA offers autopay discounts you won’t find with Navy Federal. But Navy Federal’s longer shopping window or fast funding times could make it a better fit for you.

Compare more lenders before applying

If you don’t meet the service-related requirements of these two lenders, other lenders boast similarly flexible payment options and terms. Explore offers from several lenders to ensure that you get the best auto loan for your needs.