It is widely believed that, regardless of your walk of life, low credit rating makes getting a loan more difficult. But this is only the case when lenders pay attention to the score applicants have. For members of the military, it is possible to secure even large loans, like $20,000 military loans, with bad credit.
It might seem like a myth that such a large sum of money can be secured with a poor credit history, but the military is considered by lenders to be a different type of applicant. This is down to a number of logical reasons, but the overriding fact is that job security and certainty of income are both high. As a result, many lenders offer no credit check approval processes, and fast loan approval.
Of course, applying for a large military loan does involve satisfying a number of set criteria, so it is not accurate to think that all members of the armed forces are guaranteed loan approval. But approval is certainly more accessible than for civilians.
Special Status of Military Personnel
So why are members of the military considered differently by lenders? Well, their job security is extremely high because they are employees of the US government. This means that they can never suffer unexpected redundancy, and their income is guaranteed to be received like clockwork every month. By any standards, this makes getting approval on a $20,000 military loan with bad credit rather straightforward.
The element of risk is also covered by the fact that payments are made directly into the bank accounts of military members, and repayments from those paychecks can be diverted automatically to the lender. So, even if they wanted to, the borrower could not miss a repayment. With such security, fast loan approval seems logical.
But that is not to say that repaying a large military loan is not a grave responsibility. So, the applicant needs to meet the set criteria before they can get the green light.
Qualifying Conditions to Satisfy
As with all loans, there are basic criteria that must be met before any lender will even consider granting approval on a $20,000 military loan with bad credit. These include being at least 18 years old and confirmation of the income earned.
But there are also some special qualifying criteria too. Military loans are reserved for current and former members of the military, so proof of military service is essential. Only when the lender is certain that the applicant qualifies will they begin to consider the application. And if the right boxes are ticked, then fast loan approval can be looked forward to.
The only other stipulation is that the applicant can actually afford to make the repayments, so the 40% debt-to-income ratio rule is applied. If the outcome is positive, then approval on a large military loan is set.
Why No Credit Checks?
It might seem that providing no credit check assessment processes is asking for trouble, but there are huge advantages for both parties. Lenders agree that the financial mistakes of the past are not proof that they will be carried out again. So, even applications for a $20,000 military loan with bad credit can be taken on its own merits.
The idea of a credit check is to gather information to confirm the risk an applicant is, and then to decide on the interest rate to charge to compensate for that risk. But since military personnel have little risk financially, there is no need to check on them and fast loan approval can be confidently provided. So, when seeking large military loans all that really matters is that the right boxes are ticked.