Who Will Loan to Active Military?
Active duty service people often find challenges sourcing loans because of their unique financial and personal circumstances. Many lack collateral, access to banking facilities and a permanent address. As a result, active duty military can look to military lenders for assistance.
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Challenges
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The main challenge for a member of the military is the fact he is not likely to have good credit. Sometimes this happens because military personnel miss payments on loans. Even without missed payments, though, credit suffers because these individuals do not take many loans, do not have much equity or collateral, and otherwise lack the financial infrastructure required by many lenders.
Military Lenders
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There are a number of lenders who advertise "military loans." Some of these lenders are attempting to service an underserved area of the economy, and they make it a priority to work with military personnel. However, some of these lenders are simply taking advantage of the fact they know many soldiers cannot get loans. They will use this information to charge high interest rates and financing fees because they are aware they have little competition.
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VA Loans
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Your best bet for an active duty military loan is to work with a lender qualified by the Department of Veterans Affairs (VA). The VA guarantees home, personal and other loans for members who meet requirements to obtain a Department of Veterans Affairs Certificate of Eligibility. To obtain eligibility, fill out Form 26-1880 to learn the loan amount limit you qualify for. Then, go to a lender on the list of the VA's approved lenders, and ask for a VA loan.
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References
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- Photo Credit soldier image by Ivonne Wierink from Fotolia.com
