How to Refinance Navy Federal Student Loans

Kathryn Morstad
how to refinance navy federal student loans
how to refinance navy federal student loans

As we move closer to the eventual end of the pandemic-related deferments for federal student loans (as of this date, August 31, 2022), people are in the process of evaluating the refinance options available to them.

They are also weighing the looming interest rate increases that are sure to negatively impact refinancing loans in the future.

Today, there are over 44 million people with federal and private student loans totaling more than $1.6 trillion. The amount is staggering — it’s more than all the credit card debt in the U.S. combined.

If you are a member of the armed forces or a veteran and belong to Navy Federal Credit Union, you may have financed your private student loans through them. Let’s take a look at why you should consider refinancing those loans.

Why You Should Consider Refinancing Navy Federal Student Loans

When you look at how to refinance Navy Federal student loans (or any federal or private student loans), you want to weigh the pros and the cons.

Is there money to be saved? Can you change the terms of your current loans to better meet your needs through refinancing? Will you need a cosigner to get the best rate? These are all questions that can be answered during the student loan refinance process.

Let’s take a look at the benefits and the drawbacks of refinancing Navy Federal student loans, as well as the best way to compare student loan lenders and offers.

7 Positives of Refinancing Student Loans

There are a number of pros to refinancing Navy Federal Student Loans, or any federal or private student loans.

When you took out those loans, the interest rates were probably significantly higher than they are now. In fact, depending on the type of student loan and the year it was initiated, you could be paying rates as high as 8% to 9% with variable rates that are even higher.

By refinancing those high-interest loans, you can gain some significant savings. Let’s look at the pros of refinancing federal and private student loans:

1.   You Could Lower Your Interest Rate and Save Money

The biggest (and most obvious) benefit to refinancing your loans is the ability to save money. When you refinance your federal and private student loans, including loans from Navy Federal, you will get a new interest rate based on today’s private lender marketplace.

To get a glimpse of the big picture, today’s interest rates are at historic lows. While that may not last forever, student loan refinancing rates are currently starting at 1.74% for variable rate loans and 2.74% for fixed rate loans.

When we say that today’s current rates may not last, we’re basing that on the current guidance from the Federal Reserve Bank (also known as the Fed) that is reporting a possibility of up to eight more increases over the next two years. The Fed’s intention is to curb inflation and a possible recession. However, even at the minimum increases, this could raise interest rates anywhere from 2% to 4%.

Today’s sense of urgency has people looking at their refinancing options while the rates are low and there is still money to be saved.

To get an idea of the amount of money you could save, try this Student Loan Refinance Calculator. It will determine your lifetime savings on interest, as well as calculate your new monthly payment.

As an example, if you have student loans totaling $32,000 (the current national average right) and you are paying 7.2% interest over the next 8 years, your monthly payment is about $440. You will also be paying more than $10,000 in interest throughout the life of the loan.

If you were to refinance that same $32,000 at 8 years, but for 3.2%, your monthly payment would drop to $378 per month and you would save almost $6,000 in interest.

2.   You Could Have One Easy Payment Each Month

Most people ended up graduating with multiple student loans taken out at different times during their college career.

If that’s the case, you now have multiple student loan bills each month with different due dates and payment amounts, which can create a nightmare when trying to manage your finances.

By refinancing, you can consolidate all of those bills into one easy payment and reduce your monthly headache. Most lenders also offer autopay, which can make your life easier — not only is your bill paid automatically, but a lot of private lenders offer a .25% interest rate discount for autopay.

3.   You Can Lower Your Payment to Save Money Each Month

If your focus is more short-term and your main goal is a lower monthly payment, many refinancing lenders offer terms up to 20 or 25 years, which spreads your payments out over a longer period and reduces your monthly amount due.

Be sure to weigh the long-term impact of lengthening your student loan repayment term. There is a good chance that you may pay more in interest with the longer term loan.

You could always take advantage of the lower payments now with a longer term, and then refinance again later to a shorter term when you can make larger payments.

4.   You Can Pay Off Your Loans More Quickly

Maybe your goal is to pay off your loans as soon as possible. Paying off your loans more quickly could allow you to put your buying power somewhere else, like buying a house, getting married, or starting a family.

By refinancing your loans to a shorter term, you can pay them off faster and focus your resources elsewhere. Keep in mind that refinancing to a shorter term will increase your monthly payment, but you will save money on interest in the long term.

5.   You Can Use a Cosigner on a New Loan and Get Better Terms

If you aren’t satisfied with the rate you qualify for due to a low credit score or insufficient income, consider using a cosigner.

A cosigner can be a parent, grandparent, or even a friend that is willing to vouch for you and has a financial profile that will get you a better deal.

And the good news — there are a number of refinance lenders that offer a cosigner release option where you can have the cosigner removed from further responsibility once you have made a predetermined number of on-time payments (usually 12 to 24 months).

6.   You Can Transfer Your Parent’s Loans

Like many people, your parents may have taken out Parent PLUS Loans or private parent loans to help supplement your education expenses. Refinancing is a great way to take responsibility for those loans now that you are in a better financial position.

By moving the student loans solely into your name, your parent can focus on other financial options without having to worry about your debt. They may be saving for retirement or planning to travel and would appreciate being able to do that without the burden of additional financial obligations.

7.   There are No Fees to Refinance

Unlike a mortgage or home equity loan, there are no application or origination fees for student loan refinancing, and most lenders don’t have any prepayment penalties. That means you can refinance as often as there are benefits to gain at no cost to you.

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4 Negatives of Refinancing Student Loans

It’s important to consider the potential drawbacks to refinancing Navy Federal student loans. Here are two drawbacks to consider:

3.   You Will Lose Nave Federal’s Customer Benefits (But Will Get New Benefits)

Most private lenders (including Navy Federal) offer a form of deferment or forbearance. When you refinance, any benefits associated with your Navy Federal loans will be lost. However, the company that you refinance with will have a new set of benefits — be sure to review these before you proceed with refinancing. All of Purefy’s recommended lenders offer some form of financial hardship assistance or forbearance, if you have difficulty making ends meet in the future.

4.   You May Not Qualify for a Refinance

Refinancing comes with eligibility requirements that include credit and income limits that applicants must meet. Use Purefy’s Rate Comparison Tool to see if you are eligible and receive up to four pre-qualified quotes. We describe the process in more detail below.

If you aren’t eligible for student loan refinancing on your own, remember that you can always reapply with a cosigner.

See How Much You Can Save

Student Loan Refinance Calculator

View Details


Student loan refinancing combines your current loans into a single loan with a new rate and term. See how much you can save by entering your loan information below, or by getting quotes from multiple lenders using Purefy’s rate comparison tool.

Step 1: Enter Current Loan Information

Loan Balance
Your remaining student loan debt to be repaid.
Interest Rate
The amount that the lender charges in interest, expressed as a percentage.
Current Monthly Payment
The total amount of your monthly student loan bill.
Add Multiple Loans to Calculate

Step 2: Enter New Loan Information

New Interest Rate
Your updated interest rate after refinancing student loans.
The length of time you have to repay your student loan debt in full.

Add Multiple Loans

Insert additional loan

Step 3: See How Much You Can Save


Lifetime Interest


New Monthly



Current Loan New Loan Savings
Rate 6.7% 4.2% 2.5%
Lifetime Interest $37,520 $22,210 $15,310
Monthly Payment $1,146 $1,018 $128

Like what you see? Check your actual prequalified rates from the industry’s top lenders in just 2 minutes or less.

Is it a Good Idea to Refinance Private Student Loans?

Refinancing student loans is a personal decision for everyone. It is important to understand your financial goals and what you are trying to accomplish through refinancing. Do you want to save money over the long term, or are you interested in lowering your monthly payments now?

There are no right or wrong answers to these questions — it’s a matter of what works for each person on an individual basis.

The good news is there are no fees or obligations to explore your options or to apply for a refinanced student loan.

Who Should Refinance Navy Federal Student Loans?

Refinancing student loans, whether Navy Federal, federal, or private, is best done when you have your financial ducks in a row. This would include:

An Outstanding Credit Score

When you took out your private Navy Federal loan, you may have noticed that your initial approval was based primarily on available income rather than credit score. This criteria is unique to Navy Federal student loans and not typically the case with refinancing lenders.

Most student loan refinancing lenders take credit scores into account, so your credit score should be at least 660 (the minimum for most refinance lenders). And remember, the higher the score, the lower the interest rate.

Credit scores can be tricky to improve, as increasing your score often happens slowly over time. You have to borrow money and show that you can pay it back on time every month, while keeping your overall credit utilization low. But each time you officially apply for a loan, you’ll undergo a hard credit pull which may lower your credit score temporarily. It’s important to be careful how many times you actually apply for credit (including car loans, credit cards, mortgages, etc.). Most bureaus consolidate multiple inquiries of the same type over a short period of time, so if you are rate shopping it’s most beneficial to keep multiple applications within a 14-day time period.

You want to keep your credit in good shape, so check your credit report and score once per year for free. An annual review is a good way to make sure you correct any mistakes that could affect credit decisions, as well as ensure your identity hasn’t been stolen.

Good, Reliable Income

Can you demonstrate strong income? Have you been at your job for a while? If you have your own business, does it show a profit? Student loan refinance lenders will consider these factors and more when you apply, so without strong income you will likely need a cosigner.

A note about new employment: some lenders will accept an offer letter for income verification, but not all lenders will. If you have an offer but have not yet begun employment, check with the lender to ensure this is acceptable before applying and undergoing a hard credit pull.

Debt-to-Income Ratio (DTI)

Not only do lending companies want to know that you make enough money, but they also want to know that you manage it well and aren’t over-extended on the money you spend each month. A low DTI shows lenders you can afford the monthly payments for the new loan.

You can determine your DTI by using a calculator such as the one Purefy offers here.

It’s a fairly simple calculation: just divide your monthly rent/mortgage and other fixed expenses (your car loan, student loans, credit card minimums, etc.) by your gross monthly income. As a general rule, most lenders want your DTI at 38% or below to qualify for student loan refinancing.

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Refinancing Student Loans:  How to Refinance Navy Federal Student Loans Quickly and Easily

If you have weighed the pros and cons and decided to move forward with refinancing your Navy Federal student loans, then the next step is to do a comparison of multiple lenders since each one has different rates, benefits, and underwriting criteria.

Rather than visit each lender’s site, consider using a student loan marketplace like Purefy’s Rate Comparison Tool.

Compare Student Loan Refinance Rates with Purefy

Purefy’s state-of-the-art digital quote generation engine will collect some personal information about you and your loan needs, submit that info to a group of industry-leading lenders, and generate a quote comparison report with pre-qualified offers that allows you to choose the best option for your lifestyle and needs.

It’s 100% free and there’s no obligation to move forward with an application.

Here’s how it works:

Tell Us About You and Your Student Loans in 2 Minutes

Just fill out the information requested and Purefy will do a soft credit check (meaning it won’t impact your credit report) to connect you with real student loan refinancing offers. Your information is transmitted using top-tier secure encryption (SHA-256 RSA) and is 100% secure.

You will need to provide the following details:

  • Basic demographic info, including address, date of birth, and social security number
  • Annual income, whether from a paycheck, tax returns (if self-employed), or 1099-R forms (if retired)
  • Whether you own a home or rent (and if so, your monthly rental payment)
  • What school you graduated from and the degree you obtained
  • Whether you are a US citizen or permanent resident
  • Total amount of student loans that you hope to refinance (both federal and private)

In about two minutes, you will receive a report outlining pre-qualified offers from multiple lenders. These are actual offers based on your unique credit profile, not teaser rates or estimates.

Select Your Favorite Pre-Qualified Rate

Once you receive the student loan refinancing offers, it’s time to evaluate and compare your options. You will see each lender’s best fixed and variable rates (if applicable), the terms available, your new monthly payment, and any other special offers or benefits.

From there, you may want to use the student loan savings calculator to compare the bottom line for each quote. The calculator will determine your monthly payment as well as the amount of interest you can expect to pay over the life of the loan. You might also want to verify if the lender offers a .25% discount for using autopay and if that discount is factored into the quote.

Once you have made your selection, it’s time to move on to the application process. You will be automatically connected to the private lender’s application system.

Complete Your Refinance Application

Now comes the actual student loan refinance application, which should take about 15 minutes to complete. At this point, the lender will complete a hard credit pull which will show as an inquiry on your credit report.

Once you are pre-approved, you will need to provide supporting documents to verify your information. These can include:

  • A government-issued photo ID
  • Verification of your living situation – a copy of a utility bill with your name, etc.
  • Pay stubs or tax returns to verify income
  • A payoff statement and student loan statement for each loan being refinanced
  • Your diploma or official transcripts to verify graduation

E-Sign and Close Your Loan

Once you are approved, all there is to do is e-sign your loan documents to finalize your new loan. The refinance lender will pay off your existing loan(s) and issue loan documents for your new refinanced student loan.

Be sure to continue making payments on the old loans until you are notified that the final payment has been made. If you end up making a payment and the existing loan is overpaid, your old lender will return the money either to you directly or to your new lender to be applied to your new loan.

To Summarize — How to Refinance Your Navy Federal Student Loans and Start Saving

Refinancing private student loans – like those from Navy Federal – can provide a variety of benefits including saving money, paying off college debt faster, simplifying your finances, and lowering your monthly payment.

Like with any big purchase, a refinance deserves a closer look to find the best lender with the options and attributes that you’re looking for. By using Purefy’s custom process, you can find the loan product that most closely fits your lifestyle and budget.

When you ask the question, “How do I Refinance Navy Federal Student Loans?”, Purefy has the answer!

Interested in Student Loan Refinancing? Compare rates from top-rated lenders and see how much you could save.

Checking your rates takes 2 minutes and has no impact on credit. 

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ELFI Rate Disclosure

4 ELFI Rate Disclosure:

Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 01/01/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

Earnest Rate Disclosure

2 Earnest Rate Disclosure:

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.72% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.39% APR to 9.19% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

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ISL Rate Disclosure

5 Iowa Student Loan Rate Disclosure:

Fixed Rate Loan Terms: 5 years/60 monthly payments, 7 years/84 monthly payments, 10 years/120 monthly payments, 15 years/180 monthly payments, or 20 years/240 monthly payments. Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. This rate is expressed as an APR. Fixed APRs range from 6.94% to 11.58% APR [low to high range with 0.25% auto-debit rate reduction]. Rates are subject to change without notice. Fixed rates will not change during the term. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan including a 0.25% auto-debit rate reduction. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. All estimates are based on information provided by you and are for informational purposes only, accuracy is not guaranteed and may not reflect actual rates or savings and do not constitute an offer of credit. Your actual rate, payment and savings may be different based on credit history, actual interest rate, loan amount, and term, including your cosigner [if applicable]. If applying with a cosigner, we use the higher credit score between the borrower and the cosigner for approval purposes. All loans are subject to credit approval.

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