Members of the military are not quite as secure in their finances as some people think. True, they have strong job security, but they are not the best paid employees and have all the usual bills and expenses civilians are familiar with. It means that bad credit is as much a reality for them as anyone else, so applying for military loans with bad credit is nothing strange.
Of course, military members do have some advantages over civilians, not least that their opportunities to secure fast loan approval are more common. But to secure approval at all, they must first meet strict loan criteria and prove an ability to afford the monthly repayments. There are no guarantees of approval.
So, how should an applicant go about applying for a military loan? What are the terms they should look for? And what are the loan options that members of the military should consider?
How To Qualify
In truth, the task of qualifying to apply for a military loan with bad credit is not difficult. The key condition is that applicants prove they are members of the military, and the rest – being over 18, a US citizen and being in full-time employment – is confirmed by the fact they are in the military.
The only area of uncertainty lies with the state of their finances, with lenders wanting to know why they have a low credit score in the first place. If the reason is rooted in poor money management, there may be a reluctance to give the green light, but if it is down to unforeseen circumstance, then fast loan approval is possible.
Affordability is also important, with the debt-to-income ratio significant in proving it. The ratio limits the share of income to commit to loan repayments to just 40%. In order to be approved, the repayments on the new military loan cannot push the share above that limit.
Loan Options To Consider
There is more than one kind of loan that military members can apply for, but the most suitable when seeking military loans with bad credit rests on the category of bad credit military borrower that intends submitting an application.
The first category includes those who have a poor credit history – those who have had loans in the past and have either consistently missed repayments or have defaulted on loans completely. These are considered a larger risk since they have a poor habit of repayment, so getting fast loan approval is quite unlikely.
The second category includes those who have no credit history as they have never taken out a loan before. These are those applicants who joined the military immediately after high school graduation. Their low credit score is not due to a poor repayment habit, so a military loan is very much attainable.
Finding the Right Loan Source
It is possible to apply for a military loan with bad credit from traditional lenders, like banks, but it is generally better to apply to online lenders due to their superior terms. These lenders offer special terms to military applicants due to their employment status and income security. However, it is also worth going to military approved lenders.
As designated military lenders, they offer a strong possibility of granting fast loan approval, but most significant is the fact that these lenders are accountable. This can be a problem when seeking loans from online lenders, with some unscrupulous operators to be found online.
For any unfamiliar lenders, it is best to check out their reputation before signing up to any military loan agreement. Visiting the Better Business Bureau website is the best way to do so.