Guide to Loans Offered to the Military Service Member

Swimming with sharks is one way to describe military communities.  Outside most bases there are frequently similar business establishments, they are, tattoo parlors, bars, car dealerships, dance clubs and “loan sharks.”  Why?  The prey consists of young soldiers or sailors who are financially inexperienced, have little or no credit, have a consistent pay check but haven’t learned how to manage it yet and often start having families and get in over their heads financially and are desperate. 

There are many who are willing to advance you the cash at a very high price.  Unfortunately, it can become habitual to continue living above your means.  Before you stress out and run out in town to seek a cash advance, it would be wise to counsel with the financial adviser’s offered free on base.  They have a wealth of information at their finger tips.  Also, Military One Source can offer advice to active duty over the phone. 

Not all loans are created equal.  There are many beneficial loans available to military members, however, you must do your research before diving in or you could end up drowning in interest.  If you are needing cash for an emergency such as a car broke down and you need it to get to work or you helped a family member out and you find yourself short or your electric got cut off in the dead of winter or you have an emergency root canal. 

In each military branch there will be a Relief Society that is a volunteer organization that can offer one time cash advances interest free for emergencies.  There are forms you will have to fill out and you may be required to attend a budgeting class, but it is worth it if it prevents you from having to borrow at high interest rates.

Many types of loans are offered through government banks.  Check your financial institution for what loans are available.  The interest rates tend to be lower with a set repayment terms on the loan so that you are not carrying long term interest.  Most banks such as USAA, Pentagon Federal, Marine Federal, Navy Federal, etc. are open to all active duty, retired and reservists from all branches of the military. 

VA Home Loans is a nice benefit for military members.  However, check the terms before you decide to use it because you can only use it once.  If you are buying a house but do not think you will be permanent to the area, you may want to wait until you are going to be some place for longer than a few years.  Consult with your mortgage company first as they are often familiar with the terms of usage.

The “loan sharks” mentioned surrounding the base are all establishments that promise to hold your check and give you cash.  You will get your money at a very high cost and it is not solving your problem.  It actually is built to perpetuate it.  The interest rates and fees are so high that you are bound to run out of money early and need to come back.  The slogans such as “We’re here to serve you because you serve us,” sound patriotic but is not a true service.  Do yourself a favor and use the lifesaver the military has thrown you to help you learn how to be financially sound before jumping in with the sharks.