Military loans are an interesting segment of the lending industry. Although lenders may not design loans specifically for military personnel or veterans, special programs and rules exist to ensure that military families can borrow the money they need. As you read further, consider which options best suit your situation, including loans, cash advances and programs that allow you to move forward in life.
While your military service is just one portion of your life, several financial tools can help fund other parts of your life.
What is a Military Loan?
A military loan is a financial tool designed specifically for active-duty military personnel or a retired servicemember. Keep in mind, however, that you likely cannot shop for a “military loan” through every financial institution you research. Look, instead, for programs that suit active or retired military personnel and their families.
In short, you can look for lenders that cater to the military or programs that offer preferential service to the military or related civil servants.
Additionally, you may want to consider Small Business Association (SBA) loans for veteran-owned businesses.
Are Loan Discounts Available for Military Personnel?
In banking, as in other consumer-related industries, you can often find a discount for veterans or military personnel. Additionally, service members can use the Servicemember’s Civil Relief Act, a law created to provide extra protections for servicemembers in the event that legal or financial transactions adversely affect their rights during military or uniformed service. Among other protections, the law states that if you took out an automobile, home or student loan or incurred credit card debt prior to becoming a service member, or if you took out such a loan jointly with your spouse, then you are entitled to have your interest rate reduced to a maximum of 6 percent per year. This accommodation does not expire until 1 year after your discharge.
So, while you may have access to better rates than most, you should ask the financial institution of your choice if there are even lower rates available. While it would be impossible to list all the discounts that are available to military personnel, you should seek out a discount at every bank and with every financial platform you choose.
Preparing for Military Loans
While military loan options are enticing, you must prepare for these loans as much as you possibly can. Taking care of your credit, paying your debts faithfully and remaining financially healthy is more important than uncovering a specific loan.
Preparing for a military loan should include:
- Pay off debt as much as possible
- Pay all your debts on time
- Create a monthly budget to help control your spending
- Dispute incorrect items on your credit report
- Try to save as much money as you can
As you prepare for a military loan, you will find that you can put yourself in a much stronger financial position while also seeking the funding you require. Moreover, you may want to consider smaller loans—no more than $1,000—similar to those offered by platforms like MoneyLion.
What is a Military Grant?
While a military grant is not a loan, it’s an option that military personnel and their families might consider. Evaluating these options will expand your financial horizons, helping you obtain a greater level of financial freedom.
Grant programs to be considered include:
VFW Unmet Needs Program: Grants up to $1,500 are available to help with basic life needs. No repayment is required.
Pell Grants: Educational grants available for children aged 24 and younger of deceased veterans.
Other national organizations supporting veterans and military personnel include:
- The American Legion
- Paralyzed Veterans of America
- Veterans of Foreign Wars
MoneyLion is a digital financial platform that helps the “99% feel 100%” about their finances. The platform ensures that you have every option you need to live well and grow, including:
- Mobile banking
- Credit builder loans up to $1,000
- Options to get paid early
- Buy-now pay-later options
- Cash advances
- Cashback rewards
- No hidden fees
- Financial trackers and calculators
- Crypto and investment accounts
Learn More About Military Loans Today
As an active duty or retired service member, you can learn more about military loans that will help you progress through life and improve your financial wellbeing. As always, return to Benzinga at any time to learn more about loans, stocks, cryptocurrency and a wide array of financial instruments.
Frequently Asked Questions
Can you borrow from the military?
Yes. If you’re active or retired military personnel or a family member, you may qualify for a loan through the Army Emergency Relief program, one example of relief programs available to servicemembers and their families.
Are there grants for veterans?
Yes. The Department of Veterans Affairs offers grant programs for honorably discharged military personnel. Several types of programs are available, including educational grants.