Many financial institutions offer breaks on rates and fees for active duty military personnel, veterans, and their families. If you seek out the best military loans for your credit type you could save hundreds, if not thousands, of dollars.
Are you a member of the military or a veteran? SuperMoney can help you learn what to expect and what to pursue when applying for a mortgage, auto loan, personal loan, or credit card.
The best military loans of 2020
We’ve put together a list of the best lenders offering loans with special perks for the military community.
To give you an idea of what interest rates you can expect, here’s are some typical rates for each loan type:
Best mortgage loans for the military
USAA offers a suite of financial services: from banking to insurance to loans.
The lender offers both conventional and VA loans. With a conventional loan, you need at least a 5% down payment and a 620 credit score. But with a VA loan, no down payment is required, and you don’t need to meet any credit requirements.
The only catch to the VA loan is the funding fee, which can range from 1.25% to 3.3% of the loan amount. But if you’re entitled to service-connected disability payments, you don’t have to pay the fee.
The VA loan also doesn’t require private mortgage insurance. Conventional loans, on the other hand, require insurance unless you make a down payment of 20% or more.
Veterans United Home Loans is the largest VA loan provider in the United States. The same terms apply as with a VA loan from USAA, but interest rates may differ, so it’s wise to still compare both lenders. In addition to offering VA loans for new purchases, Veterans United also offers home refinance loans.
Military homeowners can use refinance loans to get cashback on a VA refinance and use the money to pay off debt, home improvements, and many other expenses. The two main VA refinance programs are the VA Streamline Refinance (also known as the Interest Rate Reduction Refinance Loan) and the VA Cash-Out Refinance.
Navy Federal Credit Union (NFCU) offers not only low interest rates but also 100% financing and super-long repayment terms. You can pay for your new car for 36 to 96 months — that’s up to eight years. Exact rates, terms, and conditions will depend on your credit and financial profiles.
In addition to offering great terms, NFCU also offers an Auto Buying Program. The program helps you find a low-priced vehicle and offers savings that aren’t available to the general public. All you need to do is enter your zip code and start searching based on your preferences.
The program includes participating dealerships nationwide, and it makes it easy to find dealerships nearest to you. If you want to buy a car while deployed, the Overseas Auto Buying program can help you find and deliver a car stateside or wherever you’re stationed.
As we’ve stated, USAA is among the best overall financial institutions for military members and their families.
You can get an auto loan through USAA for new cars, used cars, and to refinance existing auto loans. The lowest loan rates are available for new cars — typically the current year and previous year model. If you have your eye on a used car, you’ll receive better rates if you finance at least $15,000.
USAA’s loan terms range from 12 to 84 months, depending on your needs. USAA’s interest rates aren’t quite as low as NFCU’s, but the lender does offer a 0.50% rate discount if you go through the USAA Car Buying Service. You’ll also get other savings through the program. In fact, USAA estimates that the average member saves $3,554 off MSRP when using the service.
And if you set up automatic payments on your new loan, you’ll get another 0.25% discount.
As with any other type of loan, the exact rate and terms you get will depend on your credit and financial profiles. While USAA is happy to accept applicants of all credit types, you’ll need excellent credit and a solid income to get the best rates.
As a leading online lending marketplace, LendingClub loans are available to the general public. However, military personnel potentially have a distinct advantage.
That’s because when you apply for a LendingClub loan, you have to provide detailed personal and financial information. If your financial information isn’t as stellar as you want it to be, LendingClub investors may still take a chance on you based on your personal story.
What’s more, LendingClub’s minimum credit score is just 600. The lender offers competitive interest rates on the low end, but they can get high if your credit isn’t great. Also, the lender charges an origination fee of 1% to 6% of your loan amount. You can borrow between $1,000 and $40,000, and you’ll pay it back over three to five years.
Omni Financial Military Loans offer eligible borrowers personal loans ranging from $500 to $10,000. Stateside borrowers may apply online or visit a brick-and-mortar Omni Financial facility.
If you’re stationed overseas, you can complete your application online. If you’re approved, you can get your cash by check, direct deposit, or a virtual Visa debit card.
What sets Omni apart is its 15-day satisfaction guarantee. If you change your mind about the loan within 15 days of your loan approval, you can return the money at no cost.
Repayment terms include six to 36 months, and the lender’s rates are competitive. Your rate will depend on several factors, including your state of residence, the amount and length of the loan, current financial obligations, and past credit history.
NetCredit also offers personal loans for military personnel. This is one of the few subprime lenders that offers loans to active duty personnel with bad credit. Borrowers complete applications online or over the phone, and NetCredit evaluates them according to a proprietary scoring model.
The SBA has instituted the Patriot Express Loan Program in collaboration with banks and lending institutions across the country. SmartBiz SBA loans is a company that specializes in SBA loans. It can process them in a matter of weeks instead of months.
If approved, you can qualify for a loan of up to $500,000 to help you fund your business. You can use these funds to start or expand an existing business, or to buy business-related equipment, real estate, or inventory.
Repayment terms can be anywhere between 10 and 25 years, and interest rates are extremely competitive with other small business loans.
If you’re an active-duty service member, the Platinum Card from American Express is a no-brainer. Its steep annual fee would make it difficult for non-military members to afford. But American Express waives the fee if you’re on active duty.
Here are some of the highlights of the card:
- Receive a sign-up bonus worth hundreds of dollars.
- Earn 5 points per dollar spent on airline and hotel purchases made through American Express Travel, plus 1 point per dollar spent everywhere else.
- Get a $200 airline fee credit each year.
- Get $200 worth of Uber credits each year.
- Visit any of American Express’ Global Lounge Collection in airports all over the world.
- Get elite status with several hotel chains and car-rental companies.
If you can get the annual fee waived, that’s a lot of value.
The PenFed Promise Visa is the only credit card we’ve ever seen that has absolutely no fees at all. While the card doesn’t offer ongoing rewards, it does offer a sign-up bonus, so you can still get some monetary value other than skipping the fees.
So, if you need a vanilla card and want to avoid foreign transaction fees, annual fees, balance transfer fees, and cash advance fees, this is the card for you.
PenFed Credit Union, like NFCU, is dedicated to the military community, so you can also get other military perks when you become a member.
The bottom line
As a member of the military community, you have many opportunities to save money when you borrow. But it’s still important to shop around and compare different lenders to make sure you’re getting the best overall deal. That applies to mortgage loans, auto loans, personal loans, and credit cards alike.
As you take the time to do the research, you’ll have a better chance of getting the best rates every time.
Ben Luthi is a personal finance writer and a credit cards expert who loves helping consumers and business owners make better financial decisions. His work has been featured in Time, MarketWatch, Yahoo! Finance, U.S. News & World Report, CNBC, Success Magazine, USA Today, The Huffington Post and many more.