Military personal loans are financial products designed specifically for active-duty servicemembers, Veterans, and their families. These loans usually offer favorable terms and conditions tailored to the unique financial needs of the military community.
Eligibility Criteria for Military Family Members
While some family members are typically eligible for military personal loans, there are a few important considerations.
Spouses of Military Members
Spouses of military members nearly always qualify to apply for military personal loans. Before applying, be sure to check the specific eligibility criteria of the lender you’re considering, as requirements can vary. For example, some lenders might consider a non-married but cohabitating partner as eligible, while others might not.
Dependents of Military Members
Dependents (typically defined as unmarried children under the age of 26 enrolled in school) may qualify for military personal loans. The eligibility criteria for dependents often include proof of relationship and possible verification of student status. Special loan programs may cater specifically to military dependents' financial needs, such as loans for educational expenses.
Other Eligible Family Members
Eligibility for other family members, such as parents or siblings, is generally more restricted than for spouses or children. Most military personal loan programs focus primarily on immediate family. Loans for extended family members often come with additional requirements, such as higher credit score thresholds or proof of financial dependency on the servicemember.
Benefits of Military Personal Loans for Family Members
Military loans don’t just provide benefits for servicemembers — eligible family members enjoy similar (or identical) benefits.
Lower Interest Rates
Military personal loans often offer lower interest rates compared to civilian loans because of the lower risk associated with lending to military personnel, given their stable income and job security.
Flexible Repayment Terms
One of the best advantages of military personal loans is the availability of flexible repayment terms. These terms can include extended loan durations, customizable payment schedules, and options for deferment or forbearance during your servicemember’s deployment. This flexibility is especially helpful for military families because it allows them to adjust their repayment based on their current financial circumstances.
Special Protections and Rights
Military personal loans come with special legal protections and rights under laws such as the Servicemembers Civil Relief Act (SCRA). These protections include capping interest rates at 6% for pre-service loans; foreclosure protections; and provisions for lease terminations without penalty during deployments. These regulations safeguard military borrowers and their families from financial exploitation and ensure fair treatment in the lending process.
How to Apply for a Military Personal Loan as a Family Member
Gather your documents ahead of time and do a little research to make applying for a military personal loan smooth and efficient.
Required Documentation
The documents you’ll need when you apply for a military loan are the same as you would need for a civilian loan. Typically, these include:
- Proof of identity
- Income verification
- Military ID, the servicemember’s DD-214, VA Disability Award letter
- Proof of relationship to your servicemember
Depending on your lender, you may need additional documentation, so it’s a good idea to speak to someone at the lending institution before you apply. Also, make good copies of all your documents. Keep them organized and easy to find during your application process.
Comparing Loan Options
Before applying for a military loan, shop around for different offers by evaluating key factors including:
- Interest rates
- Repayment terms (i.e., duration, monthly payments)
- The lender's reputation for customer service and transparency
During your research, ask your potential lender about any additional perks or benefits offered, such as flexible payment options during deployments or financial hardships.
Completing the Application Process
Once you’ve collected your required documents and have compared your military loan options, it’s time to complete the application process by submitting your application online or in person. Be sure to follow all instructions carefully to avoid mistakes or automatic rejections. It also helps to be proactive in following up with lenders to see if they require any additional information. While you wait for a decision, maintain open communication with your lender for a smoother approval process and address any concerns promptly.
Apply for Your AAFMAA Loan Today
Active-duty E5-O4 servicemembers and their families trust AAFMAA’s Career Assistance Program (CAP) Loan Member benefit to provide the financial support they need at a low interest rate. Learn more about us and AAFMAA Member benefits today!