What is a Veteran Loan?
A veteran loan is a lending product custom-tailored to the unique borrowing needs of veteran and military households. For example, a veteran loan may pause payments during your deployment period if you're ever called up for active duty. In other cases, lenders offer better rates or other features in their veteran loan products. But you shouldn’t discount general personal loans, as veterans may find a better deal with a loan not specifically marketed to them.
Why Do Veterans Need Personal Loans?
While many people can find a way to live without personal loans, some veterans find this type of loan helpful for various reasons. Some of the most common reasons to get a personal loan include debt consolidation, buying a used vehicle, covering emergency medical expenses, or funding a home expansion or remodel.
Most personal loans are unsecured, meaning the lender can’t seize your assets if you don’t pay. That’s very similar to a credit card. But you usually have a fixed monthly payment, like a student or car loan. That combination of features may be a great way to access quick cash. But only apply for this type of loan if you understand the costs and are confident in your ability to repay the loan as agreed.
How to Get a Personal Loan for Veterans
Getting a veteran personal loan usually requires a combination of steps, including a review of your credit history, income and expenses, and other details included in your loan application.
Here is a blueprint you can follow to apply for a personal loan for veterans:
- Search for the best lenders: Like any other major purchase, it’s a good idea to shop around to find the lender with the best loan terms and features for your goals and needs. Lenders have different credit requirements, loan limits, repayment periods, and other options that could make one better or worse for you.
- Compare your rates and options: When you’ve found your top two or three lenders, it’s time to go ahead and apply. Online applications often take less than 10 minutes when you have your information handy and available. When prequalifying, many lenders use a soft credit check, which doesn’t impact your credit score.
- Sign and agree to your desired loan terms: Pick the loan with the terms you want, and follow the steps to sign the loan documents. Again, this is often done online. A loan agreement is a legally binding contract, so don’t sign unless you’re sure you want the loan and are okay with the costs and repayment terms. At this point, the lender may complete the application with a hard check of your credit history, which slightly impacts your credit score for up to two years.
- Funds disbursement: If all goes well, you should be quickly approved and get access to funds. If you entered your bank account information during the application process, your funds might be disbursed through direct deposit as soon as the next day.
- Repayment period: Now you have the money, but it’s time to start your repayments soon. The first payment is often due around a month after the loan funds are sent to the borrower. Late and missed payments can severely harm your credit score, so consider automatic payments to ensure you always pay on time.
Other Financial Resources for Veterans
Borrowing money isn’t always the right solution to financial problems. Consider other financial resources for veterans that can help you keep your financial footing or avoid major financial challenges.
- Grants for veterans: Government and nonprofit organizations offer grants to qualifying veterans and their families. An example is the US Cares Emergency Assistance Program, which gives awards averaging $650 to help with monthly living expenses.
- Financial counseling for veterans: Government and nonprofits offer free and discounted financial counseling to help veterans understand their finances and make better choices. The VA is a good starting point for finding vetted counseling programs.
- Veteran loans: Veterans may qualify for special loans to start a business, buy a home (VA home loans), or for other needs.
- Veterans of Foreign Wars programs: The local VFW can be a great place to network with other veterans and access grants and other resources to help you deal with financial struggles or improve your financial knowledge.
- Military benefits: Even after your time in active duty, you may qualify for discounted healthcare, education funding, life insurance, and job training. These programs can be worth tens of thousands of dollars or more to your family.
- Personal fundraising: Personal fundraising sites like GoFundMe connect you with family and friends who may be willing to help you with a financial contribution during a time of hardship.
Conclusion
Personal loans can help veterans overcome a financial jam, get ahead of debt, or start on a major purchase or project. While personal loans are not suitable for everyone, you may find a personal loan with a low rate and low fees that works well for your goals. In almost all cases, personal loans are better than payday loans.
Consider your goals and needs when shopping for personal loans for veterans. While there is no perfect personal loan for all veterans, there is likely a best personal loan for your needs. This list should help you get started with some of the best lenders on the market today.