Veterans Personal Loan Guide

Personal loans are a diverse and accessible avenue for veterans and their families to gain financial flexibility. Whether adjusting to civilian life, consolidating debt, or just planning a large purchase, veterans often find personal loans to be their most attractive financial option.

Who provides personal loans for veterans?

Veterans are not restricted to any specific lenders when seeking personal loans. However, there are over 200 military-affiliated financial organizations that cater to the needs of veterans and other individuals related to the armed forces.

Some of them, like Navy Federal Credit Union and USAA Federal Savings Bank, work only with active and former military members and their immediate families. Although these institutions do not always boast the lowest annual interest rates (APR), they generally offer accessible loans with caps on APR that limit debt potential. Some institutions that fall into the category of military-friendly banks include: 

 Despite their accommodations, preferential treatment does not always extend to personal loan programs. Other non-military lenders might offer better and more accessible terms. Borrowers are advised to understand the requirements and specializations of a range of financial institutions so that they can identify the most favorable loan options for their particular situation.

How to prequalify for a personal loan

One of the best ways to evaluate potential loan products is to go through the prequalification process with multiple lenders. Most lenders will perform a soft credit check and an initial analysis of a customer’s financial profile (i.e. income, credit history, outstanding debt, etc.), then offer preliminary terms that suggest the ultimate loan option.

 If the lender grants the prequalification, customers can accept the offer and move forward with the formal personal loan application. Almost all of these institutions offer convenient online prequalification. For those wishing to complete many prequalifications at once, many personal finance companies can quickly submit your information to multiple lenders.

Best personal loan options

Available loans range from $1 to $100,000 and, as of October 2020, have annual interest rates between 5.95% and 36%. A customer’s access to these products depends on several factors, including their employment, debt ratio, and credit history.

For those with excellent credit

Individuals with good financial stability may find that conventional lenders with no military connections offer the best rates. Headlining this list of low-interest lenders are:

Lightstream: Currently offering the lowest rate in the market at 5.95%, this division of Truist provides loans from $5,000-$100,000 on 2-7 year terms. Securing this market-setting rate requires excellent credit (800 FICO credit score or above) and enrollment in automatic payment. Funding is immediately available upon the completion of loan verification.

SoFi: Their low 5.99% APR includes a 0.25% reduction for automatic payment, and is accessible only to highly qualified candidates based on income and credit history. Loans run from $5,000 to $100,000 on 2-7 year terms and do not require an origination fee. It may take several days for funds to arrive.

Best Egg: Qualifying for their interest rate of 5.99% requires a credit score of at least 700 and a six-figure annual income. Loan amounts range from $2,000 to $35,000, and money is available within one business day. Best Egg does not require automatic payment to receive their lowest rate

Downside: While these companies offer low-interest rates, their stringent thresholds for qualification make those favorable terms inaccessible to many customers.

Best military-affiliated personal loan options

While they don’t necessarily have the lowest rates, their products are generally more accessible to those with imperfect credit and financial profiles. Also, their APR ceiling of 18% helps customers avoid snowballing debt.

Pentagon Federal Credit Union: PenFed’s 6.49% APR is the fourth lowest rate on the entire market, and their range of $500-$20,000 accommodates loan amounts well below the minimum for other lenders with comparable rates. Loan approval requires a stable source of income and a fair credit rating (anywhere from 580-699). However, PenFed offers the uncommon option to include a cosigner in loan deals.

Downside: There is no option to prequalify, and for those seeking debt consolidation, PenFed will not pay their customers’ creditors directly.

USAA: This military-only organization offers competitive rates from 6.99% to 17.65% on loans from $2,500 to $5,000 (these rates do include a 0.25% discount for automatic payment). Loans feature no minimum requirements, no prepayment fees, and accept joint applications in which two people are responsible for paying off the balance of the loan. Loans are provided on 1-7 year terms and require no origination fees.

Downside: This is a relatively small range of possible loan amounts, with an extremely low maximum value. Approval includes a hard credit check that can temporarily damage one’s credit score.

Navy Federal Credit Union: The planet’s largest credit union boasts no origination fees and no minimum requirements, as well as loan amounts from $.01-$50,000 on 1-5 year terms. Home improvement loans are also available on terms of up to 15 years but at elevated interest rates of 15.29%-18%.

Downside: NFCU’s 8.19% rate, while competitive among most credit unions, faces more affordable competition in the overall marketplace. The company also offers no prequalification and performs a hard credit pull that harms one’s credit score. Money is not immediate, taking 3+ days to be delivered.

For those with bad credit

These options exist outside of military financial institutions and don’t generally feature loan products catered to veterans. However, they do offer options for veterans who fail to meet the qualification standards of the previously discussed institutions.

OneMain Financial: OneMain’s primary advantage in the lending market is its accessibility. Interest rates run from 18%-35.99%, but the company accepts joint applications and allows customers to secure their loans through collateral (usually an automobile, but this motor vehicle collateral option is not available to active-duty military and their immediate family). These secured loans typically lead to a lower APR on a loan product. Depending on the state, customers might be required to pursue a minimum loan amount.

Downside: OneMain charges origination fees, either a flat $250-$400 or a 1%-10% fee on loans from $1,500-$20,000. Customers might be also required to meet with the company in person at one of their over 1,600 locations in 44 states.

Avant: This lender offers the most affordable range of rates (starting at 9.95% APR) to customers with a credit score of at least 580, the lowest threshold for fair credit. There are options for flexible payments, as customers can change their payment date up to one day before it is due. Also, money is often delivered within one business day.

Downside: Avant charges an origination fee up to 4.75% of the loan proceeds, and does not offer options to co-sign or otherwise secure a loan. They also require a credit qualification standard that is too high for some loan seekers.

LendingPoint: This lender provides loans of $2,000-$35,000 at 15.49%-35.49% APR to borrowers with a credit score of at least 585. LendingPoint allows for changes in payment date, but also requires an income of at least $20,000 per year and a debt ratio below 40%. 

Downside: Borrowers in dire credit situations do not qualify, and options for co-signing and securing a loan are not available. LendingPoint also charges a 0%-6% origination fee.

For those struggling to meet requirements for a conventional loan

Each branch of the military maintains a relief society that offers financial assistance to veterans, and, in many situations, their immediate family members. This assistance usually comes in the form of no-interest loans and grants that require no repayment. Military relief societies specialize in disseminating emergency relief funds on a case-by-case basis, and applicable emergencies include, but are not limited to:

  • Supplies for children/babies
  • Rent payments
  • Vehicle repairs
  • Utilities
  • Emergency Travel
  • Dental Care
  • Disasters

Veterans can submit requests to be reviewed by employees. However, each relief society has a different approach to this process:

  • Navy-Marine Corps Relief Society: Customers must make an appointment at a local NMCRS location, and complete a Financial Assistance Application and Pre-Appointment Information Sheet. Veterans looking to obtain a quick assist loan or emergency travel assistance are able to walk in without making an appointment.
  • Army Emergency Relief: Veterans within 50 miles of a military base or institution can contact the AER officers at those locations to submit their relief requests. Those who do not live within 50 miles of a military installation can call the American Red Cross at 1-877-272-7337, who are authorized to work on the society’s behalf.
  • Air Force Aid Society: Those seeking assistance can simply fill out and submit an online form that describes their specific situation.
  • Coast Guard Mutual Assistance: Specific relief applications are available and can be completed online. However, they must be printed and submitted in person to a CGMA Representative. If there is none available within 50 miles, veterans have the option to work with another military institution or the American Red Cross.
  • For more information, veterans can contact these lenders directly. They can also seek the free financial guidance offered by organizations like the Department of Veterans Affairs, or if they’ve been discharged within the last year, Military OneSource.

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