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How to Settle a Debt with Navy Federal

Sarah Edwards | April 11, 2024

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Fact-checked by George Simons, JD/MBA

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD/MBA. In his spare time, George likes to cook, because he likes to eat.

Summary: To settle a debt with Navy Federal, you should respond to any pending lawsuits, determine how much you can pay off in a lump-sum, send a settlement offer, and get the settlement agreement in writing. SoloSettle can help you settle your debt with Navy Federal for less.

Navy Federal Credit Union is the largest credit union in the world. Prior and current service members of the U.S. Armed Services and their families can hold accounts at one of its many branches.

While the credit union initially served members of the U.S. Navy, it is now open to all service members, civilians, and contractors who work for the U.S. Department of Defense.

Having an account with Navy Federal entitles you to certain benefits, including low-cost loans and credit cards. You can also get a mortgage or home equity line of credit (HELOC) as a Navy Federal member.

However, sometimes people face unexpected difficulties, and they can’t make payments on their Navy Federal credit card or loan. If you find yourself unable to satisfy your obligations with your Navy Federal debt, you have a few options. You can attempt to set up alternative payment arrangements, get a debt consolidation loan, or settle the debt.

Here’s how.

Settle debt with Navy Federal

You can negotiate debt settlement at any stage of the collections process. SoloSettle makes it easy.

Settle with SoloSettle

Set up payment arrangements with Navy Federal

If you’re missing payments or not abiding by the terms of your loan agreement, Navy Federal has already taken notice. You’re probably already receiving phone calls or letters from them.

If your problems have only been going on for a few months, you can attempt to negotiate alternative payment arrangements with Navy Federal. Call them and explain your situation. If you’re currently unemployed or have other financial difficulties you are attending to, Navy Federal may agree to grant you a forbearance for a short period.

If Navy Federal can’t give you a forbearance, you can ask them to lower your monthly payments. Lower monthly payments can give you a little extra room while you’re dealing with extenuating circumstances.

Consolidate your loan with Navy Federal

Debt consolidation is also an option. Debt consolidation involves obtaining a special loan that you use to repay all of your outstanding debts. If you have multiple debts you can’t seem to pay down, debt consolidation can reduce your interest costs and allow you to pay off your debts more quickly.

The best debt consolidation loans have low interest. However, you’ll need a good credit score to qualify. If you don’t have a good credit score, you may still be able to get a debt consolidation loan, but the interest rate will likely be higher.

You can compare the debt consolidation offer to the interest rates on your other obligations to determine whether it will bring you any savings.

Debt consolidation is preferable to other options that can damage your credit score, like stopping payments or declaring bankruptcy. But be careful not to run up the balance of your paid-off credit cards and adopt healthy financial habits as you move forward.

Should I settle my debt with Navy Federal?

Settling your debt can allow you to save money by paying less than the total amount of the obligation. You’ll also eliminate future interest charges.

There are two times when you can settle a debt with Navy Federal: when you stop making your regular loan payments or when Navy Federal attempts to sue you for an unpaid balance.

If you’ve recently stopped making payments to Navy Federal and have the savings available to make a settlement offer, you can attempt to negotiate with them. Offer to pay a portion of the total balance, in a one-time, lump-sum payment, in exchange for release from the remaining balance of your loan.

Remember that Navy Federal is under no obligation to accept your offer. They can decline it altogether or provide a counteroffer. However, if they see you’re struggling, they may be more willing to take your settlement offer.

Settle your debt with Navy Federal if they are suing you

If you’ve received notice that Navy Federal is suing you, debt settlement is still an option. In fact, you can reach out to settle a debt with Navy Federal at any stage of the lawsuit process. Here’s how.

Your first step is to file an Answer in response to the Complaint filed by Navy Federal. Respond to each of the claims from Navy Federal. While you plan to negotiate a settlement, an Answer prevents the court from giving Navy Federal a default judgment against you.

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Take stock of your current finances to determine what you can afford to offer Navy Federal in exchange for a settlement agreement. It’s best to begin with at least 60% of the value of your debt. For instance, if you have an unpaid credit card with Navy Federal for $3,000, you can offer them $1,800 to settle the obligation.

Since you won’t have much time to arrange a settlement with Navy Federal, you should handle the process via email. Email gives you a written record of the negotiation while keeping the communications instantaneous.

How can I start the debt settlement process?

Once you’ve determined how much you can afford to pay off, send Navy Federal your initial offer. Your message might sound something like this:

“Dear Navy Federal,

I would like to offer a lump-sum payment of $___ to settle the debt associated with case number ____. Please let me know if you accept the offer, or if you’d like to counter.

Please do not contact me in any other way than by responding to this message. I'm prepared to litigate this matter and win in court. I’m also prepared to file an FDCPA complaint.”

The team at Navy Federal will review your email and determine whether your offer is adequate to settle the debt. If it’s not, they will likely provide you with a counteroffer.

You may go through several rounds of counteroffers with Navy Federal. Don’t worry, it’s part of the process. Keep a calm mind and consider your responses before sending a reply to any counteroffer.

As you correspond, be careful to avoid sharing sensitive information, including bank account numbers, and be wary of sending ACH transfers. Once you reach an agreement with Navy Federal, be sure to get the details in writing. This can save you from any trouble should they change their mind or forget the terms and conditions of your settlement.

If you’re not sure how to handle the negotiation process, SoloSettle can help.

Negotiate debt settlement on your own

We wanted to know the best ways to negotiate debt settlement, so we asked a lawyer for some tips. Watch the video below to learn more about how to negotiate debt settlement on your own:

Here's a recap on how to negotiate debt settlement with Navy Federal on your own:

  • Avoid threatening bankruptcy as it's often ineffective.
  • Show proof of your limited ability to pay, like being on Social Security, facing multiple debts, or having wage garnishments.
  • Make a realistic offer, considering they will likely counteroffer.
  • For junk debt buyers, settlements of 10-35% of the total debt are typical, while original creditors may accept 50-75%.
  • If you propose a payment plan, ensure it's realistic for your budget. Be truthful about your financial situation, as creditors often have detailed information about you.

SoloSettle, powered by Solosuit, is also a powerful tool that can help you settle debt. With the SoloSettle software, you can send and receive debt settlement offers until you reach an agreement with Navy Federal. SoloSettle then helps you manage the debt settlement agreement documentation and forwards your payment to Navy Federal for you, helping you protect your personal financial information.

Let’s look at an example of how to settle a debt with Navy Federal.

Example: Tyler is being sued by Navy Federal after falling several months behind on his payments. He uses SoloSuit to respond to the lawsuit, giving himself time to negotiate a debt settlement. After analyzing his finances and doing some research into debt settlement with Navy Federal, Tyler decides he can afford to pay off up to 85% of the debt right now. He uses SoloSettle to send his initial offer, starting low at 40%. After a few rounds of negotiations, SoloSettle helps Tyler reach an agreement with Navy Federal of 65% of the debt. Tyler saves money and puts himself in a better financial position moving forward.

Use SoloSettle to settle your debt on your own.

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Does Navy Federal offer debt consolidation loans?

Yes, Navy Federal offers debt consolidation loans ranging from $250 to $50,000 with fixed rates between 8.99% and 18.00%, depending on the term length.

A debt consolidation loan can help you combine multiple debts—usually high-interest debts like credit card balances—into a single loan, typically with a lower interest rate or more favorable terms. Debt consolidation makes it easier and less expensive for borrowers to pay off debts. The goal is to simplify payments, reduce interest costs, and help manage debt more effectively.

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