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Navy Federal Credit Union | Private Student Loan FAQs

The Basics

LendKey is our servicer for student loans. Navy Federal Credit Union has partnered with LendKey to leverage their expertise in working with schools to ensure the best experience for our members.
The Navy Federal Credit Union Private Student Loan can be used to pay for qualified educational expenses including tuition, room and board, books, and other school related expenses. Private student loans serve as a way for students to fill the funding gap between the cost of attending school and the amount of federal loans, grants, and available scholarships.
Federal student loans follow guidelines set forth by the U.S. Department of Education and typically offer fixed and lower interest rates compared to private student loans. However, federal loans, unlike most private loans, have borrowing limits, which may not allow a student to borrow enough to cover the entire cost of education. Private loans help students fill the funding gap between the cost of attending school and the amount of federal loans, grants, and available scholarships. Both private and federal student loans typically allow students to defer full principal and interest payments while in school and some offer economic forbearance options once a student completes school. Unlike federal loan programs, private lenders assess the credit history of the borrower and cosigner before making a loan.
Eligibility for federal, state, and university funded financial aid is determined by completing the Free Application for Federal Student Aid (FAFSA). All students are strongly encouraged to apply for federal aid by completing the FAFSA, which can be obtained online at www.fafsa.ed.gov.
No. Students are encouraged to explore and exhaust all federal aid options first, and then use private student loans to help pay the remaining education expenses.
The financial information you provide in the Free Application for Federal Student Aid (FAFSA) is used by the government to determine your Expected Family Contribution (EFC), which is the amount you and your family are expected to pay towards your education. The EFC is then subtracted from the cost of attendance for your respective school to determine the amount of financial aid you are eligible to receive.
The EFC is a calculated assessment of how much your family is expected to contribute to your college costs. The EFC takes into consideration your family’s financial strength – income and assets. Other factors considered include the number of family members and number of family members in college.
To qualify, applicants must meet credit and underwriting criteria and be a:
  • member of Navy Federal Credit Union
  • U.S. citizen, permanent resident
  • legal adult in the state they reside
  • For in-school loans: currently enrolled at least half-time in a degree-granting program at an eligible school
  • For refinancing loans: must be a graduate of an eligible school

The Application Process

A cosigner is an adult who is creditworthy and is willing to assume legal responsibility for the loan liabilities along with you. The cosigner must be a U.S. Citizen or Permanent Resident.
The need for a cosigner depends on the results of a credit check. A co-signer can help borrowers qualify for a Private Student Loan, especially if those that are in-school full time and don’t have income of their own. Having a cosigner can also help get a lower rate which will decrease the cost of the loan. Both the borrower and the cosigner should be aware that they hold equal responsibility for repayment of the loan.
Cosigner release is available for creditworthy borrowers after making consecutive on-time full principal and interest payments during the Repayment Period. The borrower may request for cosigner release and retain the loan on a stand-alone basis, if the following requirements are met:
  • Borrower has made 24 consecutive, on-time full payments of principal and interest during the Repayment Period.
  • Borrower meets minimum credit requirements, based on a new credit pull initiated at the time of the request.
  • Borrower meets minimum income requirements, based on proof of income documents provided at the time of the request.
You can confirm whether or not your school is an eligible school on the first page of the application, which is located here Eligibility Page.
We encourage you to start early. You can start the loan application process once you know what school you will be attending, the Cost of Attendance for the current academic year, and can provide proof of enrollment. It is suggested, that you allow yourself 6-8 weeks from the time of the initial application until your school receives your funds.
You can borrow as little as $2,000 or up to the cost of attendance per year for a maximum total of $120,000 in undergraduate loans or $160,000 in graduate loans.

School-certified cost of attendance is the amount of money your school believes is required to attend their institution. It includes tuition, fees, room and board, and other education-related expenses.  The school’s financial aid office can provide this figure.  Keep in mind that Private Student Loans are meant to bridge the gap between the cost of attendance and the funding you have received from Federal Student Loans, scholarships and grants.

Navy Federal requires that all credit approved loans go through the school certification process and reserves the right to approve a lower amount than the school certiied amount or withhold funding if the school does not certify private student loans.

The application process must be completed online at http://NavyFederal.lendkey.com/

Applicants will need to provide their:
  • Navy Federal Access Number
  • Social Security Number
  • government-issued ID
  • basic information about their academic standing
  • permanent address, phone number and email
Yes, you must provide proof of enrollment at an eligible school to complete the application process.
If you are a returning student, you must provide an unofficial copy of your most recent graded transcript as proof of enrollment at the school you are attending to complete the application process. If you are an incoming freshman, your school will confirm your enrollment during the certification process.
You must provide a copy of your two most recent pay stubs received within the last 60 days. Pay stubs submitted for review must clearly display the following five pieces of information:
  1. Employer Name
  2. Pay Period
  3. Employee Name
  4. Gross Income
  5. Deductions
Depending on your type of employment or financial situation, we may be able to accept alternate proof of income:
  • If you are self-employed, you must provide the previous 2 years’ tax returns and required schedules.
  • If you are retired, you must provide a pension and/or social security award letter or 1099R.
  • If you are a commission-based employee, you must provide the previous 2 years’ W-2 and two recent pay stubs received within the last 60 days.
If the loan is cosigned, only the cosigner needs to submit these documents.
School certification is normally completed by the school’s financial aid staff and will include information like the Cost of Attendance and the registration status of the student. Certification ensures that the student is not over-awarded in total funding beyond the Cost of Attendance.
Yes, all loans are certified with the school.
During the application process, cosigners will be asked to create an account and complete their own application. They complete the same application procedures as the borrower for joint-credit.
Yes. During the application process, and as part of the underwriting process, a credit bureau report is pulled for both the borrower and cosigner.
The status of your application is available by signing in to your account. The green status bar you see immediately after login indicates which stage your application is currently in.
Applying:
The borrower started the application but it has not been credit reviewed for one of two reasons:
  • The borrower hasn't submitted the application yet
  • The borrower invited a cosigner that has yet to complete his/her portion of the application
Reviewing:
  • The application for both the borrower and cosigner (if applicable) is reviewed and an initial credit decision is determined
Gathering:
  • The borrower is conditionally approved
  • The borrower and cosigner (if applicable) uploads the required documents
Approving:
  • The application is under final review
Signing:
  • The application is fully approved
  • The borrower signs the loan agreement and acknowledges the disclosures
  • The loan is certified by the school
Disbursing:
  • The loan disbursement is scheduled
The repayment term begins 6 months after the borrower graduates or ceases to be enrolled at least half-time in an eligible degree-granting program. Once repayment begins, the borrower has 10 years to repay the loan.
The loan proceeds will be sent to the school by check or through electronic funds transfer (EFT). The check will usually be mailed within 5-7 business days of the borrower accepting their final disclosure unless the school requests a later date. Typically, once the school receives the funds, they will process the amount owed, and send the remaining funds to the student.

Paying Back the Loan

Interest Rate = Base Rate + Loan Margin

The Base Rate is the average of the 3-Month London Interbank Offered Rate (LIBOR), which is a variable component that resets quarterly on the first day of January, April, July, and October.

The Loan Margin stays constant for the life of the loan and is determined during the application process.
LIBOR stands for the London Interbank Offered Rate. This is the rate at which banks can borrow from each other and is used as the base rate for all of Navy Federal’s education loans. Rates are published daily online and in newspapers.
Unpaid interest accrues while the borrower is in school. Upon entering full repayment, all accrued and unpaid interest is capitalized (or added) to the principal balance of the loan.
Yes, interest on student loans is tax deductible. An in-depth explanation is available on the IRS website.
Borrowers may request Forbearance due to economic hardship during the life of the loan. During a granted Forbearance period, interest continues to accrue and the term of the loan is not extended. Forbearance will reset the number of on-time monthly payments that are counted towards any potential cosigner release option that may be available to you.
The in-school period lasts while the borrower is enrolled at least half-time and includes a 6-month Grace Period once the borrower leaves school. During this time, the borrower is required to either make full interest payments or a monthly $25 Proactive Payment. Any unpaid interest continues to accrue during the in-school period.
There are two standard repayment options available, that allow the borrower to defer full principal + interest payments until six months after separating from the school:

Interest-Only Repayment: the borrower is immediately responsible for making full monthly interest payments on the loan while enrolled in school. Six months after separating from the school or ceasing to be enrolled at least-half time in a degree granting program, the borrower enters repayment status and is responsible for making full interest and principal payments.

Proactive Payment: while enrolled at least half-time in a degree granting program, the borrower is only required to make monthly $25 Proactive Payments during the in-school period. Any unpaid accrued interest is capitalized (or added) to the outstanding loan amount once at the end of the in-school period. Six months after separating from the school or ceasing to be enrolled at least-half time in a degree granting program, the borrower enters repayment status and is responsible for making full interest and principal payments.
A Proactive Payment is a $25 monthly payment the borrower must make while they are in school. The borrower will begin making full principal + interest payments once they have separated from the school or dropped below half-time status. The Proactive Payment helps the borrower demonstrate financial discipline and saves the borrower interest expenses over the life of the loan.
The Grace Period is a 6-month period of time that begins once a borrower graduates or is no longer enrolled at least half-time in a degree granting program. After the Grace Period, the borrower must begin making regular principal and interest payments. Borrowers are required to either make full interest payments or a monthly $25 Proactive Payment during the Grace Period.
Borrowers are given a six month Grace Period once they graduate or separate from school before they enter repayment status. Once a borrower enters repayment status they are responsible for making full principal and interest payments.
Yes, a borrower may prepay the loan either partially or in full at any time without incurring any fees or penalties. Please submit prepayments via paper check, with the Loan ID and “Toward Principal” written on the memo line.
All monthly loan payments are made to the servicer, LendKey, using either an electronic transfer from a financial institution account designated during the application process or mailed in by check. Borrowers can set up automatic monthly ACH payments directly from their "MyAccount" by logging into their account, clicking the Payments tab, and Manage Payments. Please have the following information available: Financial Institution Name, Account Type, Account Holder Name, Routing Number, and Account Number.

Borrowers can submit payments via paper check to the following loan payment address:

LendKey
P.O. Box 824575
Philadelphia, PA 19182-4575


Please write your Loan ID and the payment date in the memo line. For example, if your payment is for your March 1st invoice, please include "03/01/15" next to your Loan ID.

Protecting Your Information

Personal information is not shared with third parties for marketing purposes. Only information that is necessary and required to complete the loan application process, make payments, and transfer funds may be shared. Please consult our privacy policy for additional details.
Our servers are equipped with Secure Socket Layer (SSL) certificate technology, which encrypts the user's entire online session. Automatic sign out occurs after a period of inactivity. All banking information and social security numbers are stored in a secure off-site data center. All users must pass through our secure verification systems to prevent identity theft. Please consult our privacy policy for additional details.
All borrowers must have a valid driver’s license or social security number. This information is used to obtain non-credit based questions from an identity verification agency. The user is asked a series of questions that must be answered correctly. Since these questions are not based on a person’s credit history, obtaining another person’s credit report does not provide sufficient information to pass our identity verification test. Those who violate our security and privacy protections are subject to disciplinary action, including prosecution to the fullest extent allowable by law. Please consult our privacy policy for additional details.

Navy Federal Credit Union | Refinancing FAQs

The Basics

LendKey is our servicer for student loans.  Navy Federal Credit Union has partnered with LendKey to leverage their expertise in working with schools to ensure the best experience for our members.
The Navy Federal Credit Union Student Loan Refinance Program can be used to consolidate and refinance your outstanding federal and private student loan debt. The student loan refinance program allows borrowers the ability to consolidate and refinance one or more student loans into one loan at a potentially lower interest rate, and/or extended repayment term.

Federal and private student loans can be refinanced with Navy Federal.

If you consolidate your Federal Student Loans through a Navy Federal Refinance Loan, you will lose certain benefits associated with your Federal Student Loans, including certain forbearance and deferment options, loan forgiveness for public service, income-based repayment plans, and loan forgiveness in the event of borrower death. You may be able to consolidate your outstanding Federal Student Loans without losing these benefits by consolidating into a Federal Direct Consolidation Loan with the Federal Government. A full explanation of Federal Student Loan benefits and consolidation options can be found at studentaid.ed.gov.

To qualify, applicants must meet credit and underwriting criteria and be a:
  • member of Navy Federal Credit Union
  • U.S. citizen, permanent resident
  • legal adult in the state they reside
  • For in-school loans: currently enrolled at least half-time in a degree-granting program at an eligible school
  • For refinancing loans: must be a graduate of an eligible school

The Application Process

You can confirm whether or not your school is an eligible school on the first page of the application, which is located here Eligibility Page.
A cosigner is an adult who is creditworthy and is willing to assume legal responsibility for the loan liabilities along with you. The cosigner must be a U.S. Citizen or Permanent Resident.
The need for a cosigner depends on the results of a credit check. A cosigner can help borrowers qualify for a Private Student Loan, especially if those that are in-school full time and don’t have income of their own. Having a cosigner can also help get a lower rate which will decrease the cost of the loan. Both the borrower and the cosigner should be aware that they hold equal responsibility for repayment of the loan.
Cosigner release is available for creditworthy borrowers after making consecutive on-time full principal and interest payments during the Repayment Period on refinancing loans.

The borrower may request for cosigner release and retain the loan on a stand-alone basis, if the following requirements are met:
  • Borrower has made 12 consecutive, on-time full payments of principal and interest during the Repayment Period.
  • Borrower meets minimum credit requirements, based on a new credit pull initiated at the time of the request.
  • Borrower meets minimum income requirements, based on proof of income documents provided at the time of the request.
The minimum you can borrow is $7,500 per year. The maximum you can borrow is $125,000 for undergraduate debt and $175,000 for graduate school debt.
The application process must be completed online at https://NavyFederal.lendkey.com

Applicants will need to provide their:
  • Navy Federal Access Number
  • Social Security Number
  • government-issued ID
  • basic information about their academic standing
  • permanent address, phone number and email
Yes, you must provide proof of graduation from an eligible school. Your graduation date needs to be verified through documentation, such as a school transcript, copy of the degree, diploma or certificate, written or verbal school verification, or through an electronic method such as the National Student Loan Clearinghouse.
You must provide a copy of your two most recent pay stubs received within the last 60 days. Pay stubs submitted for review must clearly display the following five pieces of information:
  1. Employer Name
  2. Pay Period
  3. Employee Name
  4. Gross Income
  5. Deductions
Depending on your type of employment or financial situation, we may be able to accept alternate proof of income:
  • If you are self-employed, you must provide the previous 2 years’ tax returns and required schedules.
  • If you are retired, you must provide a pension and/or social security award letter or 1099R.
  • If you are a commission-based employee, you must provide the previous 2 years’ W-2 and two recent pay stubs received within the last 60 days.
If the loan is cosigned, both the borrower and the cosigner will need to submit these documents.
For each loan to be refinanced, you must provide the last statement, and a payoff letter, or screenshot with the loan’s payoff amount that is valid for 30-45 days. The payoff amount is a stated amount that will satisfy the loan obligation through a specified date in the future.
Yes. During the application process, and as part of the underwriting process, a credit bureau report is pulled for both the borrower and cosigner.
The status of your application is available by signing in to your account. The green status bar you see immediately after login indicates which state your application is currently in.
Applying:
The borrower started the application but it has not been credit reviewed for one of two reasons:
  • The borrower hasn't submitted the application yet
  • The borrower invited a cosigner that has yet to complete his/her portion of the application
Reviewing:
  • The application for both the borrower and cosigner (if applicable) is reviewed and an initial credit decision is determined
Gathering:
  • The borrower is conditionally approved
  • The borrower and cosigner (if applicable) uploads the required documents
Approving:
  • The application is under final review
Signing:
  • The application is fully approved
  • The borrower signs the loan agreement and acknowledges the disclosures
  • The loan is certified by the school
Disbursing:
  • The loan disbursement is scheduled
Borrowers receive electronic monthly statements summarizing all account activities.

Paying Back the Loan

Interest Rate = Base Rate + Loan Margin

The Base Rate is the average of the 3-Month London Interbank Offered Rate (LIBOR), which is a variable component that resets quarterly on the first day of January, April, July, and October.

The Loan Margin stays constant for the life of the loan and is determined during the application process.
Yes, interest on student loans is tax deductible.  An in-depth explanation is available on the IRS website.
LIBOR stands for the London Interbank Offered Rate. This is the rate at which banks can borrow from each other and is used as the base rate for all of Navy Federal’s education loans. Rates are published daily online and in newspapers.
Borrowers may request Forbearance due to economic hardship during the life of the loan. During a granted Forbearance period, interest continues to accrue and the term of the loan is not extended. Forbearance will reset the number of on-time monthly payments that are counted towards any potential cosigner release option that may be available to you.
Level Repayment: You are responsible for full interest and principal payments monthly for the term of the loan.
The Level Repayment option maintains one consistent payment structure over the loan term.
Yes, a borrower may prepay the loan either partially or in full at any time without incurring any fees or penalties.
All monthly loan payments are made to the servicer, LendKey, using either an electronic transfer from a financial institution account designated during the application process or mailed in by check. Borrowers can set up automatic monthly ACH payments directly from their "MyAccount" by logging into their account, clicking the Payments tab, and Manage Payments. Please have the following information available: Financial Institution Name, Account Type, Account Holder Name, Routing Number, and Account Number.

Borrowers can submit payments via paper check to the following loan payment address:

LendKey
P.O. Box 824575
Philadelphia, PA 19182-4575


Please write your Loan ID and the payment date in the memo line. For example, if your payment is for your March 1st invoice, please include "03/01/15" next to your Loan ID.

Protecting Your Information

Personal information is not shared with third parties for marketing purposes. Only information that is necessary and required to complete the loan application process, make payments, and transfer funds may be shared. Please consult our privacy policy for additional details.
Our servers are equipped with Secure Socket Layer (SSL) certificate technology, which encrypts the user's entire online session. Automatic sign out occurs after a period of inactivity. All banking information and social security numbers are stored in a secure off-site data center. All users must pass through our secure verification systems to prevent identity theft. Please consult our privacy policy for additional details.
All borrowers must have a valid driver’s license or social security number. This information is used to obtain non-credit based questions from an identity verification agency. The user is asked a series of questions that must be answered correctly. Since these questions are not based on a person’s credit history, obtaining another person’s credit report does not provide sufficient information to pass our identity verification test. Those who violate our security and privacy protections are subject to disciplinary action, including prosecution to the fullest extent allowable by law. Please consult our privacy policy for additional details.