USAA vs. Navy Federal: Which offers better auto loans?

USAA and Navy Federal provides 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 allowing borrowers to pay whenever convenient. Navy Federal features loans with longer terms and a car-buying service to help simplify the shopping and financing process.

USAA vs. Navy Federal at a glance

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

USAA auto loans

Better for flexible payment options

USAA

Rating: 4 stars out of 5

4

Learn more in our Bankrate review

• Bankrate's view

  Founded in 1922, USAA has evolved from an auto insurance company to a full-scope provider of financial services. And unlike its competitors, USAA features flexible loan due dates so you can sync your payment plan to your payday. Borrowers can pay once a month, twice a month or every two weeks.

• Pros and cons

  

  Pros

  • Flexible repayment options
  • Autopay discount
  • Minimal fees

  

  Cons

  • No prequalification
  • Limited accessibility
  • Undisclosed loan details

Navy Federal auto loans

Better for longer-term loans

Navy Federal

Rating: 4.2 stars out of 5

4.2

Learn more in our Bankrate review

• Bankrate's view

  Navy Federal features purchase and refinance loans in its lending arsenal. It is currently the country’s largest credit union, offering attractive financial solutions to its customers. Plus, Navy Federal partners with TrueCar, allowing you to comparison shop for a vehicle online. Although the minimum credit score is not disclosed, you’ll likely need excellent credit to land the lowest rates.

• Pros and cons

  

  Pros

  • Range of repayment terms
  • Extended shopping window
  • Car buying service

  

  Cons

  • Undisclosed rate ranges
  • Limited availability
  • Higher APRs for older vehicles

How to choose between USAA and Navy Federal

Both lenders only lend to servicemembers, veterans, their spouses and qualifying relatives. If you do not meet those requirements, compare other auto loan rates to find a better fit. Otherwise, USAA is ideal for flexible repayment options and Navy Federal for longer-term loans.

APR range

Neither lender discloses the expected maximum APR online. Because there is no prequalification, you’ll need to apply for preapproval to view your possible rates. Navy Federal boasts a lower starting rate of 4.09 percent versus USAA’s minimum rate of 4.74 percent.

However, Navy Federal charges higher interest rates for older models. While this isn’t unusual for lenders, any vehicle with a model year before 2022 will have a much higher starting interest rate than its minimum.

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 small credit history or a score on the lower end, 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 up to 96 months versus 84 with USAA. However, a loan term of up to eight years can be risky and result in overspending on interest.

Also, even though the USAA has slightly shorter repayment terms than the Navy Federal, it has some perks Navy Federal does not. USAA borrowers have the ability to make loan payments when it is convenient, 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 not all borrowers can finance a loan that low. Instead, the lender functions in tiers based on loan terms. To borrow the lowest available amount of $5,000, the terms can be between 36 and 60 months. 72-month loans have a minimum of $15,000 and 84-month terms have a minimum amount of $25,000.

Navy Federal takes a somewhat similar approach, requiring that loans must be a minimum of $30,000 for terms between 85 and 96 months. However, you may be able to get a loan for $250 and up with Navy Federal. Overall, Navy Federal stands out in this category for its more flexible loan amounts.

Fees

Navy Federal’s website does not disclose all potential fees, though it does list a returned loan payment fee and late fee. USAA, on the other hand, does not charge loan application or prepayment penalties. The lender also offers a 0.25 percent discount to borrowers who enroll in automatic payments.

The 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 lower minimum APR, longer shopping window or fast funding times could make it a better fit for you.

Compare more lenders before applying

If you do not meet the service-member requirements of the two lenders, there are other lenders that boast similarly flexible payment options and terms. Explore offers from several lenders to ensure that you get the best auto loan for your needs.

PenFed

Best for prequalification

Skyla

Best for large loan amounts and low rates

LendingClub

best for a seamless application