Military Loans

An Overview of Military Loans

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Many active military personnel and veterans use military loans for emergencies, minor purchases, buying a home and consolidating debt. Since servicemen and women are often away, they are unable to garner employment that will allow them to earn enough money to support their families and military lifestyle. Moving frequently, attending trainings, and living with the possibility of being deployed makes it more difficult to meet their needs. That’s where military loans come in.

Essentially, military loans are any loans that are specifically created for both active duty and retired military personnel. Military loan rates, fees and terms vary according to the lender, but are often designed with the unique aspects of military life in mind, (i.e. frequent moves, a complicated pay scale, etc.)

Types of Military Loans

There are many different types of military loans. Our VA Loan company specializes in VA Loans, but other types of military loans out there include:

  • Payday Loans
  • Installment Loans
  • Bereavement Loans
  • Disaster Relief Loans
  • Convalescent Loans
  • Short-Term Loans; and
  • Bad Credit Loans

Which Military Loan is For Me?

The type of military loan you are eligible for depend on your current military status, your credit rating, and a variety of other factors. Though veterans, surviving spouses, National Guardists and Reservists have the option of getting some of the other types of military loans, VA Loans are definitely the best choice for them. The United States government has enacted various law and regulations that create a positive lending experience for those who have served this country.

In addition, the government guarantees VA Loans, which means that if a veteran or VA Loan recipient defaults on his VA Loan, the government will pay off the lender. Because of this, lenders are able to issue VA Loans out more easily and with fewer qualifications than they do for conventional loans.

If you’re a qualified veteran, Reservist, National Guardist or surviving spouse, VA Loans are by far the best option for you.

Payday, Installment & Home Loans

Payday loans are short-term loans that were created for borrowers who need money before their next paycheck comes in. Payday loans are often referred to as ‘cash advances’, even though that term also can mean receiving cash from a credit card.

Payday loans generally charge anywhere from $15-$30 for each $100 the borrower receives. When you put those numbers into an annual percentage rate (APR) equation, the automatic fees come out to an APR of around 385%. To explain in other terms, the typical payday borrower ends up paying $900 for each $425 he or she borrows. Ouch!

Installment loans are loans with no hidden fees that usually come with a maximum repayment term of 36 months. They are smaller loans of up to $10,000, and the rates depend on your credit score. Many military personnel wanting to purchase a home for their family get a fixed-rate or adjustable rate mortgage (ARM) military home loan for that purpose. VA Loans, however, still offer better rates and can relieve those with VA ARM loans that have skyrocketing monthly payments. Many veterans switch their existing loan over to a VA Loan once they become eligible.