Credit ratings have traditionally been seen as a core aspect of getting a loan application approved. Certainly, they are not completely ignored, but their significance is less than many might expect and there are ways around the issue. For those applicants in the military, however, getting military loans with bad credit is a lot more straightforward.
Most banks and other lending institutions offer special loan packages to bad credit borrowers, but the terms are not usually good since the perceived risk is higher. Getting approval with low credit scores usually comes down to proving an ability to make repayments, and convincing the lender they will be made without a hitch.
But for members of the military, the loans available offer much better terms than their civilian equivalent. Military loans can be offered at lower interest and longer repayment terms because of a number of aspects, not least the fact that the employer is the US government.
Who Can Get These Military Loans?
The military has a list of recognized military lenders that should always be approached when seeking a military loan with bad credit. These lenders have a variety of loan packages reserved for those who qualify, but for those with bad credit ratings, there are two in particular to choose from.
The first is for members of the military with no history of securing loans in the past. Basically, it for young enlistees who come straight from high school. These are similar to college loans, and loan approval with low credit scores is quite easy.
The second option is a military loan for those who have found themselves in financial difficulties. These may be personnel who have existing debts and expenses they are struggling to keep up with, or retirees who have struggled to adapt to the financial realities of life outside the military.
Where to Get a Military Loan
There are several places to get military loans with bad credit. Traditional banks do offer them, but it is not always possible to get the best terms from them. The interest charged is still higher with them, so it is a good idea to take to the Internet to track down the best possible deals.
Online lenders are known to offer the best deals in a number of loan categories, and are used to granting loan approval with low credit scores. But the best possible place for a military member to get a loan is from a certified military lender.
Of course, whether the military loan is sought from a bank, a certified lender or an online lender, it is still essential that the small print is read on the terms of the deal. These usually throw up hidden charges, like late penalties and deferment fees, if any apply.
Ensuring the Loan is Affordable
When the motivation behind the loan is dealing with rising debts or a difficult financial situation, it can be tempting to seek the maximum amount possible. But this is not a good idea when looking for a military loan with bad credit.
No matter the circumstances, lenders are tied by the 40:60 debt-to-income ratio, so proving affordability is essential if there is any chance of securing loan approval with low credit scores.
It is, therefore, a good idea to calculate the minimum required and seek that amount, and also to look for the longest repayment term possible. That way, the repayment sum each month is kept low, and the military loan is much more affordable.