Military personnel can find themselves in a difficult situation when looking for a loan due to specifics of their lifestyle and work. Military loans offered by banks and non-banking institutions to service people in the United States Army, Navy, and Air Force can be the only source of financing for military personnel, especially people who are only starting their military career.
People in the military need to know how to save money to finance the purchase of a new car, for example, while such a procedure can be more complicated than in civilian life. First of all, we all should try to balance our savings and loans to avoid excessive borrowing and be able to meet all debt payments. Sometimes, however, a household has no choice but to get a loan to finance a new car purchase.
Soldiers can consider turning to a military loan company to obtain a car loan. You should be aware that these loans are private, personal loans secured by private companies and are not backed by the government, therefore, you enter in contract relationship with a private lender, not with the government. It is an important detail to remember because there are government-sponsored programs for military veterans but a soldier in the early stage of his/her career will rarely be eligible for such a loan.
Service members in the U.S. military can apply for a car loan virtually everywhere in the world because the leading military loan companies have offices worldwide. You can apply for loan online as well. Basically, applying for a car loan will involve providing your military ID and Leave and Earnings Statement (LES). Many banks and non-banking lenders would not check a soldier’s credit report history, realizing that service people who begin their career will lack credit history. Actually, even top brass have insufficient credit history compared to their civilian counterparts.
Obtaining a car loan from a military loan company can be advantageous because these loans usually bear lower interest rates and are exempt from some fees and service taxes banks apply to other credits. However, you should carefully check whether a local bank or car dealer can offer you more favorable terms on a car loan, which is not unusual.
Finally, keep your savings and loans in equilibrium and never borrow more than your income can cover. A military loan can prove to be a good solution to finance a car purchase but remember that interest rates and other terms may vary, so do your homework and look for the best offer in the market.