The military is a great place for you to make a living, learn skills, develop discipline and even make a career. As a military service member you and your peers are usually the backbone of the economy when a large military base or post lies in the area. All too often there are people ready to take advantage of you because they know that a steady paycheck, naiveté and inexperience often accompany young Soldiers, Sailors, Airmen and Marines.
I’ve seen many a young soldier in financial dire straits try to climb out of a hole by taking out loans or procuring cash in other ways. Soon, they find out that the establishment they got their money from wasn’t the straightest or fairest in the world. Even institutions on the up and up will charge outrageous interest rates because of your unique and vulnerable position.
You see, in the civilian world not paying a bill will cause some problems; bad credit reports, harassing phone calls, repossession, threatening letters, collections and even lawsuits. Well, in the military you’re still subject to all of that. However, these institutions also know that the military is the kind of employer that will take its own administrative action against employees who fail to pay debts. Believe me, if you worked at your local factory with good benefits and a steady paycheck they probably wouldn’t care if you were paying your bills or not, as long as you were working. The military is different.
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Some Things to Remember When Trying to Get a Loan in the Military
- Most loan establishments (legit or otherwise) know exactly how much you make when you walk into an office or on a car lot when you’re in uniform. Your rank tells a lot about you: Salary, a good estimate on your experience and age, married and/or kids, etc. Sure, they’ll find out eventually but don’t go in advertising the information. Which means don't go in wearing your uniform. You’ll only have the advantage of them not knowing your rank for a short-time. Use it.
- Business owners, lenders and those like them usually know that if you don’t your bills or default on a debt that they can just call your command and put more even more pressure on you by using the military chain of command. This is especially true in areas where military bases are. Many people in those areas have been in the military and some are even retirees. They know the system.
- DO NOT, under any circumstances, take out loans at illegitimate businesses. Let me clarify what I consider “illegitimate”. If it’s not a bank, credit union, or military support branch or organization-then it’s not legitimate. Sure, pawnshops, pay check advances and title loans (house and automobile) are all legal, but they’re not in business to help you or for the good of the community. They’re there to get their money back, plus an outrageous interest rate OR take your house, car, paycheck and/or valuables.
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There are a lot more things to consider. Even some legitimate and honest financial institutions will lend you the money that you need at a very high interest rate. Know your options and when in doubt you can use your military service's financial and budgeting services to steer you in the right direction.
Now, let’s get into some safe places to get a military loan.
Note 1: Everyone’s opinion or experience with certain establishments can differ, but in my 19 years of service these are the only places that I would recommend to my Soldiers if they needed money in an emergency, or to finance a car purchase or home loan.
Note 2: I am not affiliated with, or in any way am including the below businesses for my own benefit (either monetary or gift) nor do I know anyone who works at these places.
Best Places to Get Military Loans
Military Emergency Loans Services Example: Army Emergency Relief (AER)
Over the years, Army Emergency Relief has assisted many thousands of Soldiers. And the Army is not the only service that has this kind of assistance available to its members. These types of services are emergency funds that even though need to be paid back they are completely interest free. AER and the likes are not traditional loan services. They are available to take a financial burden off of the military member in the case of emergencies only. For example, if a loved one dies and you need money for a plane ticket to get home, then AER can help. Also, if you can’t pay your electric bill or car payment for whatever reason these kinds of offices will be able to help but they’ll want to directly address the emergency. For example, if your car payment is $350 and you can’t pay it. then these types of emergency loan services will give you a check for $350 made out to the lender or the business you owe money to…not to you. Again, they want to address the emergency. They will work with you, though, so don’t be hesitant to try them.
Military Centered Credit Unions on Bases and Posts
Some examples of these institutions are Fort Bliss Federal Credit Union, Hanscom Federal Credit Union, Navy Federal Credit Union, etc. It may be more difficult to qualify at these types of places but they are legitimate, safe and will not charge you anything more than the standard interest rates. Military knowledgeable and friendly.
Behind AER and on-base/post banks and credit unions, USAA is the MOST military friendly actual bank that I have ever worked with. They were created to cater and care for a customer base that is largely military. In recent years USAA has made it easier for non-military people to open accounts and use their services but, again, they are always military centered in that all USAA clients and members have military in their background or lineage.
Pioneer Military Lending
You can argue with me all you want here. I know many senior leaders will want to kill me for including Pioneer because they make it real easy to get a military loan and charge a high interest rate. That being said, I know a lot of senior leaders who have used Pioneer military lending during their careers and would have been in a bad spot had Pioneer decided to not lend them the money they needed. I will add, Pioneer should be your last option. Not that it is a bad lending institution but only if you are denied by the above options.
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