There can be several reasons why a credit score drops, but it all comes down to the simple fact that combined repayments are too high to manage. But when members of the military get a military loan with bad credit, it can actually be the solution to the problem.
Members of the military are not immune to bad credit. True, they have a better employment status due to the fact their employer is the US government, but they still face the same financial challenges everyone else does. Clearing existing debt is not easy, and therefore securing extra funds to help in the task is important.
But there are great advantages for military personnel who choose to take out a military loan to handle their debt problems. The alternative is to seek a civilian loan to clear debts with, but the terms are not always great.
Military Vs Civilian Loans
So, what are the advantages that securing military loans with bad credit has over securing civilian loans? Well, for a start, the typical terms that come with the military option are far superior to those offered by traditional civilian lenders, with interest rates lower and loan limits stricter.
Because of their secure income, military members have little trouble in proving an ability to make repayments. And when clearing existing debts is the purpose of the loan being sought, the chances of getting approved are even stronger.
Repayment methods also mean that the chances of defaulting are pretty much non-existent. The government deducts military loan repayments each month, diverting the sum to the relevant lender. It means military personnel do not even have to worry about forgetting to make a repayment.
Military Vs Consolidation Loans
But given that there are numerous dedicated debt consolidation programs out there, is this not a more viable option for any military borrower too? In fact, it depends on the specific situation that the borrower is in. Getting a military loan with bad credit is easier, and should do the trick if the debt is modest.
However, if the debt is very large, and a significant degree of financial discipline is required, then getting a consolidation program from a recognized debt consolidation company is usually the best option. These professionals can ensure debts as large as $100,000 can be dealt with practically.
For military members, the challenge of clearing existing debts independently through a military loan can be too much. A consolidation company may be more expensive, with a fee added to loan charges and interest rates, but leaves little room for further mistakes.
Applying For A Military Loan
The decision whether to apply for a civilian loan or a military loan with bad credit is pretty straightforward, but like all financial products, getting the application right is essential to getting fast approval.
The best move is to approach one of the officially recognized military lenders, who have satisfied the standards set by the military itself. However, there are dozens of lenders who welcome military applicants. Providing proof of military membership is obviously pretty simple, but lenders will want to see a credit history, even when the loan purpose is clearing existing debts.
It is also worth approaching lenders online, with official military approval meaning the normal risks of borrowing a military loan online can be avoided. Applications can be received from overseas, unlike with civilian lenders.