u/Hateful_Face_Licking

I am planning to buy a vehicle from a friend here soon for $30,000. My wife suggested using a Navy Fed certificate pledge loan instead of a used car loan.

Just based on what I’m seeing:

+ You essentially pay interest back to yourself. 2% to the bank, 3.5% to the certificate. Better than the 5.5% going to the bank.

+ Bank isn’t listed as the lienholder which saves the headache of Navy Fed inevitably losing your title.

+ Flexible terms.

+ No early payoff penalties.

- Ties up $30k and makes it untouchable for a few years (not necessarily a problem for us).

- No GAP coverage.

There is always a catch though. Wanted to see if you guys have had experience going down this route or if there is something significant I’m not seeing.