If you’re facing a Navy Federal financial hardship and can’t keep up with payments, the credit union offers different relief depending on the debt: mortgage forbearance, deferment, repayment plans, or loan modification for a home loan; deferrals, term extensions, or refinancing for an auto or personal loan; a debt management program for credit card balances; and, for active-duty servicemembers, a 4% interest rate cap on debts taken on before military service. Free financial counseling is available to any member. The right option depends on the type of debt, how far behind you are, and whether the hardship is temporary or long-term.
If You’re Behind on Your Mortgage
Navy Federal offers several home retention options, each suited to a different scenario.1Navy Federal Credit Union. Alternatives to Foreclosure
- A forbearance plan lets you make reduced payments, or no payments, for a set period. It works as a bridge while you stabilize, not a long-term fix; the mortgage grows more delinquent during the pause.
- A deferment pushes missed payments to the end of the loan term. You resume your regular monthly payment right away, and the deferred amount is due when the mortgage matures.
- A repayment plan adds a portion of your past-due balance to each monthly payment over an extended period, so you catch up gradually.
- A loan modification permanently changes your mortgage terms to lower the monthly payment. This is the route for long-term or permanent hardship.
- Reinstatement means paying everything you owe in a single lump sum by a specific date to bring the loan fully current.
- Refinancing replaces the existing mortgage with a new loan at a lower rate or better terms.
One thing to know before you choose forbearance: interest keeps accruing on your principal during the pause, so the total you owe grows even though payments are stopped.2Consumer Financial Protection Bureau. What Is Mortgage Forbearance? That extra interest doesn’t vanish; it rolls into whatever repayment arrangement you pick when forbearance ends.
Timing matters. If you miss four monthly mortgage payments, or Navy Federal has reason to believe the property is vacant, the loan may be referred to foreclosure.3Navy Federal Credit Union. Alternatives to Mortgage Foreclosure Reaching out earlier keeps more options on the table. You do not need to be current to apply; several of the home retention options are built for members who have already missed payments. Navy Federal still expects you to keep paying while your request is reviewed.
If You’re Behind on an Auto or Personal Loan
For auto loans, Navy Federal may let you defer payments for a short period, extend the loan term to lower the monthly amount, or refinance into more manageable terms. Accrued late fees may be forgiven in some cases.4Navy Federal Credit Union. What Happens If I Miss a Car Payment? There isn’t a fixed menu the way there is for mortgages; the process starts with a phone call, and what you’re offered depends on your situation.
Personal and auto loans use simple interest calculated daily on your unpaid principal from the date of your last payment.5Navy Federal Credit Union. Personal Loans FAQs Daily accrual doesn’t pause during a deferral, so a deferral period will raise the total cost of the loan.
Credit Card and Other Debt
Credit card debt has no forbearance structure equivalent to a mortgage. What Navy Federal members can access is a debt management program through the credit union’s counseling partnership. A counselor contacts your creditors to negotiate lower interest rates, waived fees, and a defined repayment schedule; you then make a single monthly payment you can afford, and the program typically runs three to five years.6Navy Federal Credit Union. What’s the Difference Between Debt Management Programs and Debt Settlement Companies This is different from debt settlement, which targets a lower payoff balance and generally comes with severe credit damage.
Active-Duty Rate Cap Under the SCRA
Under the Servicemembers Civil Relief Act, interest is capped at 6% per year on debts you took on before entering military service, including mortgages, auto loans, and credit cards, and the creditor must forgive interest above that threshold.7Office of the Law Revision Counsel. 50 U.S. Code 3937 – Maximum Rate of Interest on Debts Incurred Before Military Service For mortgages and similar secured debts, the protection runs through your period of military service and one year after discharge. For other obligations, it applies during active duty.
Navy Federal caps the rate at 4% on pre-service debt for active-duty members instead of the 6% federal ceiling.8Navy Federal Credit Union. Servicemembers Civil Relief Act (SCRA) SCRA coverage applies to active-duty members across all branches, as well as reservists and inductees who have received orders but haven’t yet reported.9United States Courts. Servicemembers’ Civil Relief Act (SCRA)
Free Financial Counseling
Any Navy Federal member can use free personal finance counseling through the credit union’s partnership with the Veterans Association of Real Estate Professionals. It covers budgeting, debt reduction, credit score improvement, and homebuying preparation, and you don’t need a Navy Federal loan or mortgage to use it.10Navy Federal Credit Union. Free Personal Financial Counseling
To sign up, fill out the Personal Finance Information Sheet on Navy Federal’s website. A counselor will call within three business days. Bring your monthly budget, a list of outstanding debts, and recent pay stubs to the call. The counselor can help you match a hardship program to your situation and build a plan around it.
How to Apply
For mortgage assistance, contact Navy Federal’s mortgage team and request the Borrower Response Package. The package includes a mortgage assistance application, a financial statement, a hardship letter explaining your situation, income documentation, an IRS Form 4506-C authorizing tax return transcripts, and a signed information release.3Navy Federal Credit Union. Alternatives to Mortgage Foreclosure You have 30 days from your first contact with a mortgage specialist to submit the completed package. Within five business days of receiving it, Navy Federal will tell you whether anything is missing. A decision follows within 30 days of receiving a completed package.
For auto and personal loans, call Navy Federal’s Personal Finance Management line at 1-888-503-7106, Monday through Friday, 8 a.m. to 4:30 p.m. Eastern.11Navy Federal Credit Union. U.S. and International Phone Numbers Have your account number ready along with a clear picture of your income, expenses, and what changed. The process is conversational rather than form-driven.
For the SCRA rate cap, contact Navy Federal through the same channels and provide documentation of your active-duty status. The credit union’s SCRA page walks through the request process for pre-service debts.8Navy Federal Credit Union. Servicemembers Civil Relief Act (SCRA)
After the Relief Period Ends
Once mortgage forbearance ends, you choose a repayment path: repay the missed amounts through higher monthly payments over time, defer the balance to the end of the loan, modify the loan permanently, or pay everything off in a lump sum.1Navy Federal Credit Union. Alternatives to Foreclosure A balloon payment isn’t required the day forbearance ends unless you voluntarily choose reinstatement.
For auto and personal loans, deferred payments are typically added to the end of the loan term, extending the payoff date. Because interest accrues daily on the unpaid principal, a deferral raises the total interest you’ll pay over the life of the loan.5Navy Federal Credit Union. Personal Loans FAQs
Whatever relief you use, contact Navy Federal before the period expires to confirm the repayment plan. Waiting until the last day creates risk that payments resume at the wrong amount or that the account is flagged as delinquent when the window closes.