Active Duty Military Loans

Be Responsible

Yes, there are many banks, credit card companies, lenders, and even the Department of Veteran Affairs that will offer active duty military loans. But, the military personnel need to be wary; they need to be responsible consumers. So often, servicemen and women are young – in their early twenties, and they may not be very experienced in dealing with family finances.

So, when credit card offers come in promising low interest, and no annual fee, they need to read the fine print and make sure that those rates are not merely introductory. And, the same goes for offers of active duty military loans. Sometimes military personnel need a loan to consolidate some debts, buy a home, help to put the kids through school etc.

Many offers will come their way, and they have to be careful to not sign up with some company that is going to charge them an unreasonable interest rate. So, when you are assessing an offer, you need to look at the rate they are going to pay, the timeframe for the loan, what the monthly payment will be, and all the fees.

Another critical factor is if the loan has a pre-payment penalty. Sometimes, getting a high interest rate is the only option available. Maybe you need the money quickly; maybe you have a poor credit rating, and can’t get a good interest rate. If that is the case, then you may have to take a higher rate.

Yet, if the loan does not have any sort of pre-payment penalty, it may be possible for them to pay off the loan in a reasonable amount of time. As an example, simply sending in an extra one hundred dollars with each mortgage payment can reduce the life of the loan by half! The interest saved over the loan’s term can more than pay for it.

Added Advantages

Then there are the VA’s own loan programs, and they can come in very handy. One of the best aspects of these programs is that they do not have to be used only by the serviceman (woman); their spouse can also apply. When someone is serving overseas, it can be quite difficult for them to get an emergency loan to help make ends meet.

With the VA’s active duty military loans, the spouse can apply and get the money the family needs. Another nice feature of these loans is that typically they do not have any security. That means that no collateral is needed. Here again, military personnel often do not have a lot of assets, so these types of loans are great for them.