Our military is here to protect us when we need them the most. The job of a military member is both extremely unique and extremely important. Because of this fact, the needs of these individuals are also extremely unique.
That’s why many financial institutions have made services that cater to the needs of veterans and active duty military members a primary focus. Indeed, there are even US laws that regulate lending practices as it pertains to members of the military.
If you’re a member of the military, it’s important to know the loan options that are available to you. Start by examining your credit score and determining how much you need to borrow. If it’s possible, try to improve your credit score if need be, and then begin shopping around for the best offers from various lending companies.
Do I have to be on active duty to apply for a military loan?
There are many different types of loans that members of the military can take advantage of. Some of these types of consumer loans include personal loans, installment loans, and credit cards, as well as VA loans that apply to lending solutions like mortgages.
Not all of these types of loans apply to active duty members only. Military loans also are available for those that have met a certain requirements around time spent in military service during both times of peace and war.
Some loans require you to be a member of the financial institution to apply. For example, USAA requires you to be a member, but you do not need to be on active duty in order to get a personal loan. Some loans like VA loans require that you have completed 90 consecutive days of service, as well as several other requirements centered around the length and conditions of your service.
It’s important to remember that even though you do not need to be on active duty for many types of military loans, the Military Lending Act still only provides protections and caps interest rates for those that are on active duty.
What is the Military Lending Act?
The Military lending act protects active duty members of the military from certain consumer credit practices. It was enacted in 2006 and implemented by the Department of Defense (DoD). The protection extends to military members’ spouses and dependents and it is enforced by the Federal trade commission.
The goal of the MLA was to protect military members from lending practices that could potentially take advantage of them while they are away on duty. The MLA is necessary because of certain job demands that are unique to the careers of military members.
What types of loans are covered under the Military Lending Act?
Many types of consumer loans are covered by the Military Lending Act, but not all lending companies had to comply on day one of the MLA’s enactment. The final rule wasn’t released until July 2015, and credit card companies didn’t have to comply with the MLA until October of 2017.
They were given an exemption during that time so that they could make adjustments in order to comply. As it currently stands, in 2022, some of the types of loans that are covered under the Military Lending Act include the following:
- Credit card companies
- Payday loans
- Overdraft lines of credit
- Some types of installment loans
Veterans and service members with bad credit
If you have bad credit but you’ve spent time serving in the military, it is still possible to obtain a loan. In addition to things like your credit score and your annual income, lenders looking to offer loans to active and former military members with bad credit find unique ways to expand eligibility for those seeking a loan. For example, they may take into account expenses such as child support payments or include the total amount of income of everyone within your household.
Veterans and service members with good credit
If you have good credit, then there are a few companies that are willing to go the extra mile for their customers. Aside from the ease of application being a smoother process, some of the perks for having a higher credit score may include a wider array of reasons you will be able to obtain a loan for. For example, Lightstream allows you to finance land or even a so-called tiny home.
Lenders with Veteran discounts
Many insurance and lending companies cater specifically to veterans as well as active military members. In order to qualify for a loan from these companies, you often have to be a member. If you are a member the perks usually apply to your entire household including spouse and children.
Look for a financial institutions that cater to veterans can offer perks such as discounts on car rentals, or various car buying programs. Such perks usually are not available at traditional banks and mortgage companies.
Military loans for homeownership
VA loans are mortgages that are issued by a private lender and guaranteed by the US Department of Veteran affairs. VA loans are issued by financial institutions such as mortgage companies, credit unions, and banks, and are a popular choice for veterans because the vast majority of them require no down payment, allowing for a much easier experience when it comes to getting your foot in the door.
There are a few requirements you have to meet in order to qualify for a VA loan as a veteran. These include 181 days of active service during times of peace, 90 consecutive days of service during times of war, and more than 6 years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 of those days being consecutive.
Can I get a military loan with bad credit?
It is possible to get a military loan even if you have bad credit. This is true for both active duty military members and veterans, and there are a number of financial institutions, including credit unions, that cater specifically to members of the military.
In order to make up for lower credit scores, lenders will expand eligibility by taking into account additional factors that will put you as a customer in a more positive light and will reduce the amount of risk that the lender will accept.
For example, when assessing annual income, a bank or a credit union might take into account the income of the entire family or household instead of just the individual.
Military loans, unique offers, and perks
Military members have extremely high demanding jobs, and at some point, they may need to secure funds for medical bills, homeownership or renovations, or debt consolidation from previous high interest credit lines.
That’s why there are a plethora of financial resources beyond lending, all of which are available to active duty military members and veterans. Federal regulations and various programs that cater to these specific individuals help ensure that they themselves and the ones they care about are protected and supported in their time of need.
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Who qualifies for military loans?
Military loans are available for both veterans and active duty military members. In some cases, the length of time and conditions may affect eligibility for certain loan programs.
What loans are available for the military?
Most consumer loans are available for members of the military including credit cards, personal loans, some types of installment loans, and payday loans.
Are there personal loans for veterans?
Veterans have access to personal loans from a plethora of different lending companies and financial institutions. Some of these lenders cater specifically to veterans, and some of them have special offers for veterans.