Navy Federal Auto Loan Deferment: Everything You Need to Know

When it comes to managing auto loans, Navy Federal Credit Union offers several options for deferment that can help borrowers facing financial difficulties. Deferment allows you to temporarily suspend or reduce your auto loan payments without the worry of defaulting. This article explores the details of Navy Federal’s auto loan deferment, including eligibility, how to apply, and the potential impacts on your loan.

What is Auto Loan Deferment?

Auto loan deferment is a temporary suspension of your loan payments. Navy Federal Credit Union offers deferment to assist members who are experiencing financial hardships, such as job loss, medical emergencies, or other unforeseen circumstances. During the deferment period, you are not required to make monthly payments. However, interest may continue to accrue on your loan balance.

Eligibility for Deferment

To be eligible for deferment with Navy Federal, you generally need to meet the following criteria:

• Current Loan Status: Your loan should be current, meaning no missed payments or overdue balances.
• Financial Hardship: You must demonstrate a genuine financial hardship that impacts your ability to make payments.
• Membership Status: You must be a member of Navy Federal Credit Union in good standing.

How to Apply for Deferment

Applying for deferment with Navy Federal involves a few straightforward steps:

1. Contact Navy Federal: Reach out to their customer service department. You can do this via phone, online chat, or by visiting a local branch.
2. Provide Documentation: You may be required to provide documentation proving your financial hardship. This could include job loss notices, medical bills, or other relevant paperwork.
3. Review Terms: Navy Federal will review your application and provide you with the terms of the deferment, including how long the deferment will last and any potential impacts on your loan.

Impact of Deferment on Your Loan

While deferment provides temporary relief, it’s important to understand its implications:

• Interest Accrual: Interest may continue to accrue on your loan balance during the deferment period. This means that even though you’re not making payments, your overall loan balance may increase.
• Loan Term Extension: The deferment period might extend the total length of your loan. This can result in paying more interest over the life of the loan.
• Credit Score: Navy Federal typically reports deferred payments as current, so your credit score should not be negatively impacted. However, it’s essential to confirm this with Navy Federal.

Deferment vs. Forbearance

Deferment is often confused with forbearance, but there are key differences:

• Deferment: Payments are temporarily suspended, and interest may continue to accrue.
• Forbearance: Payments are also temporarily suspended, but the borrower may need to pay all accrued interest and principal later.

Alternative Options

If deferment is not a viable option for you, consider exploring other alternatives:

• Loan Modification: This involves altering the terms of your loan to make payments more manageable.
• Refinancing: Refinancing can potentially lower your interest rate or extend your loan term to reduce monthly payments.
• Budget Adjustments: Sometimes, making adjustments to your budget can help manage your loan payments without needing deferment.

Conclusion

Navy Federal Credit Union’s auto loan deferment can provide significant relief if you’re facing financial difficulties. By understanding the eligibility requirements, application process, and potential impacts, you can make an informed decision about whether deferment is the right choice for you. Always consult with Navy Federal representatives to explore all available options and ensure you choose the best solution for your financial situation.