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The Navy Federal Career Kickoff Loan can be an excellent way to get your finances in order as you start your military career. Military officers of all branches can borrow from $25,000 to $32,000 with a low interest rate between 1.25% and 2.99%.
The Navy Federal Credit Union cadet loan is only available to ROTC cadets and midshipmen who are within 12 months of commissioning or within 12 months after commissioning. For OCS and OTS, you must be within 4 months of commissioning or 12 months after commissioning.
For Academy cadets and midshipmen at any of the US military service academies, you must be a junior or senior at the Air Force Academy, Coast Guard Academy, Merchant Marine Academy, Military Academy at West Point, or Naval Academy.
Learn how to apply for the ROTC, OTS, and OCS Career Kickoff Loan or the Academy Cadet and Midshipmen Career Kickoff Loan Loan.
| ROTC, OTS, OCS | Academy Cadets & Midshipmen | |
| Maximum Loan Amount | $25,000 | $32,000 |
| Annual Percentage Rate (APR) | 2.99% | 1.25% |
In this post:
Navy Federal Career Kickoff Loan Application Process
The NFCU Career Kickoff Loan application process is simple. You will need a few bits of information before completing the 1 page application form:
- Social Security Number
- Date of birth
- Address
- Cell phone number
- Email address
- Branch of Service
- Name of School or Academy
- Actual or projected graduation date
- School start date
- Commission date
- Amount of loan requested, not to exceed $25,000 if ROTC/OTS/OCS or $32,000 if Academy
You can pick up paper loan documents at a Navy Federal branch or complete everything online. The online process is convenient and secure.
Navy Federal may pull a credit report to check your creditworthiness. The cadet loan can be an easy way to build a credit history with a low interest rate loan if you make on time payments.
I recommend setting up automatic payments from your checking account so that you never miss a payment. That’s one less thing to worry about as you get your military career started.
Apply for Navy Federal Career Kickoff Loan
You can apply for the Navy Federal Career Kickoff Loan in 3 ways:
- Online by filling out an application: ROTC/OCS/OTS application or Academy application
- Over the phone by calling 1-888-842-6328
- In person at any NFCU branch
Decisions to issue the loan are usually made within 24 hours. The funds should be deposited within a few business days into your Navy Federal checking or savings account.
Navy Federal Career Kickoff Loan Requirements
Navy Federal wants you to be a member for life. Offering a large, low interest rate loan is a low cost way for the credit union to recruit military officers and their families as clients for life.
You must be a Navy Federal member to apply for the loan. Navy Federal membership is open to cadets and midshipmen of all branches.
There are a few requirements to receive a unsecured loan from Navy Federal. You must establish and maintain a Navy Federal checking account with direct deposit of your net pay within 90 days of the loan origination and throughout the term of the loan.
Once you commission, you must set up direct deposit of your military pay into your Navy Federal checking account for the lifetime of your loan.
If you fail to do this, the interest rate on the loan reverts to the prevailing personal loan rate, which can be much higher than the original rate of 1.25% or 2.99%.
There are no penalties for repaying the loan ahead of schedule, paying off the loan early, or making additional payments towards the loan. I paid off my cadet loan 2 years early and it was extremely liberating.
If you are a delayed graduate, you must contact Navy Federal Consumer Loans Servicing to extend your loan repayment deferment period.
Navy Federal Career Kickoff Loan for ROTC, OTS, and OCS
The Navy Federal Credit Union Career Kickoff Loan is an unsecured loan with a maximum loan amount of $25,000 at 2.99% APR and a maximum term of 60 months.
The loan is offered to Reserve Officer Training Corps (ROTC) members within 12 months of commissioning or up to 12 months after commissioning.
Officer Candidate School (OCS) or Officer Training School (OTS) members are eligible within 4 months of commissioning or within 12 months after commissioning.
Navy Federal Career Kickoff Loan for Academy Cadets & Midshipmen
The Navy Federal Career Kickoff Loan for Academy cadets and midshipmen is offered to cadets at the following military academies:
- U.S. Air Force Academy
- U.S. Military Academy at West Point
- U.S. Naval Academy
- U.S. Coast Guard Academy
- U.S. Merchant Marine Academy
You can borrow up to $32,000 at 1.25% APR on a 60-month loan. The terms of this career starter loan are fantastic for young officers.
Monthly Payment for NFCU Career Kickoff Loan
Because the terms are different for ROTC/OCS/OTS and Academy cadets/midshipmen, let’s do a few examples of loan repayments.
Navy Federal Cadet Loan Monthly Payment – Academy
Paul is a US Air Force Academy cadet in his third year or junior year. He takes out the full Career Kickoff Loan of $32,000 in September 2023, 21 months before he commissions in June 2025.
He deferred payments on the loan until 90 days after commissioning, in September 2025. Interest accrues on the loan while he defers payments.
When he begins making payments 24 months after taking out the loan (21 months before graduating + 3 months after graduation) in September 2024, his monthly payment on the cadet loan is $564.97. The finance charge is $1898.20 if he pays off the loan on schedule.
His total repayment amount is $33,898.20 with 60 months of payments at $564.97 per month.
Navy Federal Cadet Loan Monthly Payment – ROTC
Now let’s look at Katie, a recently commissioned ROTC cadet and new Navy Federal member. She took the loan out a month after commissioning and just before she reported to her first training base and active duty.
Katie takes out the full $25,000 for 60 months at 2.99% APR. Her loan repayment starts 45 days after loan origination. Katie’s payment as an ROTC or OTS/OCS graduate, taking the loan out after commissioning, is $449.67 per month.
The total amount she’ll repay is $26,979.95 if she pays off the loan on schedule. $26,979.95 minus $25,000 borrowed equals $1,979.95 of finance charges from interest. If she pays off the cadet loan early, she could reduce the total amount repaid.
There are no early prepayment penalties on the Navy Federal Career Kickoff Loan. You can pay the loan off entirely or make extra payments at any time to reduce the length of the loan.
Navy Federal Career Kickoff Loan for Car
One of the most popular uses for the Career Kickoff Loan is to purchase a vehicle. If auto loan rates are above the rate you can get with the NFCU Career Kickoff Loan, it may make sense to purchase a car with your loan.
On the Navy Federal website, the site specifically mentions that loan funds can be used for “expenses such as buying uniforms, consolidating high-interest debt (credit cards, personal loans, etc.), paying off transition expenses or buying a car.”
You can definitely use your cadet loan for a car. To a car seller, this would make you a cash-buyer, as you do not require financing.
Investing the Navy Federal Career Kickoff Loan
I took out my cadet loan in October (November?) 2009. Since I did not need the cash immediately, I put my cadet loan to work in two investments: a certificate of deposit or CD ladder and a low cost index fund.
I invested $2,000 each into 5 CDs for $10,000 total in my CD ladder. I put $15,000 into the S&P 500 index fund exchange traded fund (ETF) “SPY.”
If I was doing it again today, I would probably use a broader stock market fund like the Vanguard Total Stock Market Index Fund, traded as VTI as an ETF or VTSAX as a mutual fund.
The CD ladder was made up of 5 CDs, maturing at 1, 2, 3, 4, and 5 year intervals. This allowed me to lock in higher interest rates on the longer term CD.
When the 1 year CD matured, I had the option of rolling into another 5 year CD, locking in higher interest rates but still allowing me access to my invested funds every year without paying an early withdrawal penalty. CD early withdrawal penalties usually just give up the last 3-6 months of interest, so you’re not really losing your principle, just some of your gains.
The other investment I made was into SPY, an ETF that tracks the S&P 500 or the 500 largest companies in America. This is the same index that the C Fund in the Thrift Savings Fund tracks.
As my CDs matured, I used the returned capital to pay off my student loans.
Cadet Loan Ideas
There are many ways you could put your Navy Federal Career Kickoff Loan to use. Some ideas might include:
- Fully fund your Roth IRA for the previous tax year and the current tax year.
- Buying a quality, used car or a low cost starter car.
- Pay off student loans, credit card debt, or any higher interest rate debt.
- Consolidate debt and reduce your monthly payments.
- Build a Certificate of Deposit or CD ladder.
- Down payment for a home or investment rental property.
- Invest in index funds and let compounding interest go to work early
- Contribute 60% of your pay to your Roth Thrift Savings Plan (TSP) account and live off of the loan savings.
Bottom Line
You can start your military officer career off on the right foot with the Navy Federal Career Kickoff Loan. With a nearly guaranteed job for several years, the Kickoff Loan can be a low risk way to access thousands of dollars at a very low interest rate.
In a high inflationary environment and a stock market that’s on sale, a low interest rate loan can be a great way to put your money to work quickly.
Just make sure that your budget as a young lieutenant, captain, or ensign can sustain the monthly cost of the loan. And don’t spend the loan on crap you don’t need or too much car!
I discuss cadet loans and how you may want to use them to get your finances off on the right foot in my book, The Military Money Manual: A Practical Guide to Financial Freedom. It’s available on my website here or on Amazon. I think you will find it useful in your journey to financial freedom while you serve in the US military.
ROTC, OTS, OCS
$25,000
2.99% APR on a 60-month loan up to $25,000
Academy Cadets & Midshipmen
$32,000
1.25% APR on a 60-month loan up to $32,000
Hi there,
is there anything available to extend the time frame of 12 months with Navy Federal? I am right outside the 12 months and missed that deadline.
Very Respectfully
Have you had a chat with Navy Federal? It’s an internal policy I believe so there should be some sort of exception to the rule or waiver process if you have a good reason for missing the deadline.