Lenders may be hesitant to approve applicants when bad credit is a factor, but that’s not the same as never getting approved. The fact is that several other factors influence such decisions, including job security and income. Perhaps that is why lenders are more open to approving military loans for bad credit borrowers.
Like everyone else, members of the military must meet specific criteria before they have any chance of being approved. But they also get the benefit of fast loan approval because of the degree of job security they enjoy as US government employees.
There is another reason lenders are happy to see a loan used for constructive purposes, such as debt consolidation. A military loan may be exclusively available to members of the armed forces, but they are just as susceptible to the pressures of everyday life as the rest of us. Debt consolidation is a constructive use of loan funds.
Advantages for Military Personnel
Most civilians would love the kind of breaks military personnel enjoy, but there are good reasons why they get them. For starters, lenders feel very positive about the financial security these applicants have, with no layoff and no chance of their employers going bankrupt. Therefore, a military loan for poor credit management is considered a safe investment.
Income is clearly a very important part of the equation, and since the US government is sure to make payments to its employees every month, the chance of borrowers defaulting is close to zero. With this in mind, offering fast loan approval can hardly be considered a risk.
It may be true that civilians generally find it difficult to get approved for a loan with bad credit, but employment status means that a military loan is easier to obtain.
Other key benefits
Of course, as members of the military, there are some other benefits available to those who get bad credit military loans. Normally, interest rates are quite low, but when the borrower is on active duty abroad, he can get further interest rate reductions.
In some cases, interest rate reductions can be as much as 6%, drastically reducing monthly payments. However, perhaps the most significant aspect of that legislation is that it pertains to both military loans and private loans.
Also, since the purpose of these loans is to pay off debt and thus improve the overall financial situation of the borrower, lenders are more open to increasing the loan limit. Therefore, it is easy to agree to grant a fast loan approval.
Check loan details
It is very important that all loan applicants review the details of any loan that is offered. Military personnel should not skip that step, as it is just as important that you examine the terms carefully before accepting any bad credit military loan.
There is also no shortage of places to find the right information, as the Internet provides excellent access to a variety of information sources. However, it’s also worth talking to lenders directly, especially online lenders who specialize in the military loan niche market.
It’s always possible to get answers via email and chat on their website, but to get answers to specific questions (like interest rate structure, range of repayment schedules, and even the details of their fast loan approval process) it’s best to speak with a representative. And of course, a military loan counselor can provide you with more information, usually available on base.