Armed Forces Loans
WHAT ARE ARMED FORCES LOANS?
Armed forces loans are available from qualified providers to active-duty and career-retired United States service members. These loans can be short or long term including lump sum distributions as well as lines of credit. Armed forces loans can be used for almost any need including bill consolidation, home improvement, car payment, travel or vacation. Maximum loan amounts vary according to loan provider, credit status and repayment terms. Some lenders lend up to a maximum amount of $10,000.
WHO QUALIFIES FOR ARMED FORCES LOANS?
All United States military personnel (US Army, Navy, Air Force, Marines and Coast Guard) who are on active duty (E-2 and above). Applicants can be stationed anywhere in the world and still qualify. Some loan companies require at least 18 months left on the applicant’s current enlistment as well as an applicant interview. Each potential borrower must submit their most current Leave and Earnings Statement (LES) with their application.
WHAT ARE THE PAYBACK TERMS ON ARMED FORCES LOANS?
Repayment terms vary among lenders of armed forces loans, and the terms may depend on the borrower’s credit status. Some repayment terms go up to 36 months. Interest rates also vary and can sometimes be very high, even up to %112 so it is important to shop around and read the fine print.
DOES BAD CREDIT EXCLUDE ME FROM RECEIVING AN ARMED FORCES LOAN?
Bad credit does not automatically exclude a person from receiving an armed forces loan. An applicant’s credit status is taken into account with every loan application, and the applicant’s credit score may or may not prohibit them from receiving a loan. It is best to speak directly with the lender to see if one qualifies. The lending institution will run an official credit check on every applicant.
DO I NEED COLLATERAL TO GET AN ARMED FORCES LOAN?
No. Most lenders grant these loans with no up front collateral needed. In general, a co-signer, someone who backs up the borrower in case he/she can’t pay, is not needed either. These terms also vary from lender to lender.
WHAT ARE THE WAYS IN WHICH I RECEIVE MONEY ON ARMED FORCES LOANS?
Some loans are distributed as a lump sum, that is, all the money at once. Other plans offer monthly allotments. There are also lines of credit that work very much like a credit card, but the borrower receives cash that is eventually paid back according to the loan terms and conditions. If the borrower does not need the whole sum right away a line of credit is favorable since interest only accumulates on the borrowed amount. With a lump sum distribution, interest begins to accrue on the entire amount right away.
CAN I RETURN UNUSED ARMED FORCES LOANS?
Yes, depending on the lending terms there is usually a period of time where you can return the loan free of charge as long as you return the entire amount.