Help for military members with too much debt
When you are in debt it can weigh heavy on your mind. When you are in the military these concerns can compound. What do you do, get a consolidation loan, try to settle with your creditors, or bankruptcy?
Military debt consolidation loans are an excellent way for military members to consolidate debt even if with have poor credit. If you are an active duty military person, you may qualify for these loans.
Military Debt Consolidation Loans Explained
Military loans in general are those types of loans given to active duty military personnel. They are not necessarily loans that come from any government source. Rather, these loans are available through various institutions locally and nationally. The only requirement to applying for this type of loan is to be an active duty member of the armed forces. Some lenders accept loan applications from Active Reservists and military retirees.
What do lenders look for
Lenders are often willing to give this type of loan to military personnel because those who are active duty have a steady income from a reliable source. However, most people who are in the military will still need to have good or better credit to obtain this type of loan, especially if they expect to get a lower interest rate. Those with poor credit may qualify, depending on the requirements of the particular lender and the applicant’s income and monthly expenses, but at a higher interest rate.
What can I use a debt consolidation for
Military debt consolidation loans are loans that active duty military personnel may apply for to consolidate all of their debt into one loan payment. If you would like to consolidate the debts you have into one payment, this may be a good option for you.
Key Types and Benefits
There are two main options for these types of military consolidation loans: secured and unsecured. Secured loans are those tied to an asset, such as a home, while unsecured are the opposite. There is no asset backing these loans. This is a key distinction to make when applying for this type of loan.If you have unsecured credit card debt that you would like to consolidation into one payment, a debt consolidation loan that is secured places your asset on the line. Should you default on your loan, the lender could take legal possession of the asset, even if that is your home. Carefully consider this consequence before obtaining any type of secured loan.
Benefits of a consolidation loan
However, there are also a number of key benefits to using secured loans for this reason. The most important is the fact that a secured loan offers a traditionally lower interest rate than that of an unsecured loan such as a credit card. You could pay half -if not less- in interest.
Obtaining a Military Consolidation Loan
In order to take advantage of any type of military debt consolidation loan, you do need to compare several lenders and the loans which they offer to you. Look for the lowest interest rate, the best terms and the overall lower costs associated with the loan.
Varieties of lenders offer this particular type of consolidation loan. Most allow you to apply for a quote online. Consider the following types of lenders who may offer loans to military personnel for consolidation:
Your own bank: Often, the best route to take is to turn to your own financial institution or credit union. Most offer loans to those with good credit.
National lenders: Consider any of the national lenders who offer personal loans or high credit limit credit cards.
Home loan lenders: Most mortgage lenders offer home equity loans, which may be used to consolidate debt. These loans are secured, but they are often the most readily available option for borrowers who have good or worse credit scores. Most offer loans to military personnel as well.
VA lenders: Lenders who specialize in VA mortgage loans may also offer military loans to qualified individuals. Your local VA office can help you to pinpoint these specific lenders.
Military personnel are oftentimes targeted by unscrupulous lenders who want to inundate applicants with high interest rates and unreasonable terms. Speak to a financial advisor on the military installation to find out which local lenders have bad reputations -or are even banned- before applying for your loan.
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