Best Personal Loans for the Military

If you're a service member or veteran looking to finance a large or small expense, you have a variety of options you can explore — personal loans, home equity financing, government grants, and more. Navy Federal Credit Union offers the best personal loans for military service members and veterans thanks to its high loan amounts and long repayment terms. Top choices also include online lenders Upgrade, LightStream, and SoFi.

Best personal loans for military members

Navy Federal: Best for officer candidates and home improvements

Navy Federal Credit Union offers membership to active-duty, veteran, and retired service members and their families. Navy Federal offers:

• Unsecured personal loans: Available up to $50,000 with repayment terms up to five years and interest rates from 8.74% to 18.00%. Home improvement loans are available up to $150,000 with repayment terms up to 15 years.
• Secured personal loans: Can be secured with your Navy Federal savings account or Navy Federal CD at a lower rate and with no credit check. You'll have to apply over the phone or visit a physical branch.
• Career Kickoff loan: Juniors and seniors at the U.S. Air Force Academy, U.S. Coast Guard Academy, U.S. Merchant Marine Academy, U.S. Military Academy, or U.S. Naval Academy are eligible; ROTC and OCS/OTS officers and candidates are also eligible. APRs are 1.29% and 2.99%, respectively; repayment terms are available up to five years. Maximum loan amounts are $25,000 and $32,000.

Depending on the loan type, you may also defer payments up to 90 or 180 days.

USAA: Best large loans for military members

Membership at USAA is available to active, retired, and veteran service members and their families. It offers personal loans with loan amounts ranging from $1,000 to $100,000, repayment terms up to seven years, and APRs starting at 9.640% and ranging to no more than 18.51%.

What are military loans and how do they work?

A military loan is simply any loan that a retired or active military member or their family can use. 

Personal loans for the military are the most flexible and are generally the same as traditional personal loans. They provide a lump sum of funds that you pay off in monthly installments with interest over a set period. Repayment terms often range from two to seven years, but may be longer for certain high-dollar loan purposes like home improvement or RV financing.

Loan amounts typically range from $1,000 to $100,000 or more, depending on your lender, credit profile, and income. 

Many lenders charge an administrative or origination fee for providing the loan. Depending on the lender, the origination fee could range from 0% to 15%. 

You can find personal loans for veterans and service members from a variety of financial institutions, including:

• Banks: Personal loans may be available at local community and large national banks.
• Credit unions: Many credit unions provide personal loans, but you'll need to become a member to borrow. Some credit unions, such as Navy Federal Credit Union, are exclusively open to service members.
• Online lenders: A variety of online lenders provide personal loans as well. Online lenders often offer competitive rates and fast funding.

What can you use a military loan for?

Lenders offer personal loans for a wide range of uses, but they generally fall into the category of personal and household expenses — and just about everyone has those, including members of the military.  

Most borrowers use the Credible personal loans marketplace to consolidate or refinance debt, including existing loans and credit card accounts. According to 12 months of personal loans data, the five most common uses for borrowers who used Credible to get a loan are:

• Debt consolidation: 39.14%
• Credit card refinancing: 25.39%
• Home improvement: 9.74%
• Major purchases: 7.84%
• Paying bills or rent: 5.35%

You can also use a personal loan for other expenses, such as moving or relocation, medical debts, vacations, weddings, and car repairs. Just make sure the lender you choose offers loans for your intended purpose before applying.

Learn More: Where Can I Get a Personal Loan?

What are interest rates on military personal loans?

Interest rates factor into the cost of taking out most types of loans. For personal loans, the cost of borrowing is typically expressed as the annual percentage rate (APR), which accounts for interest plus any upfront fees, such as origination fees.

APRs on personal loans can range from around 7% to 36%, depending on the lender, the borrower’s credit score, and other factors. 

Thanks to the Military Lending Act (MLA), service members and veterans don't have to worry about a military annual percentage rate (MAPR) exceeding 36% on a loan. Also, because of the Servicemembers Civil Relief Act (SCRA), you might qualify for interest rates starting at around 6%.

Military Lending Act

The MLA states that loans offered to active-duty servicemembers, their spouses, and dependents can't have MAPRs higher than 36% or charge prepayment penalties, along with other protections. 

The MAPR is similar to a loan's APR and still accounts for the interest rate and upfront fees. However, the MAPR also accounts for participation and application fees, which may not typically be part of an APR.

Servicemembers Civil Relief Act

If you took out a loan before joining the armed forces, the SCRA allows you to reduce your interest rate to 6% when on active duty. If you leave active duty, the lender can't add any lost interest back. 

You can apply for the interest rate reduction anytime on active duty and up to 180 days after. Inform your lender in writing and provide a copy of your orders. The SCRA also has other benefits, such as protection against a loan default judgment and a limit on a lender's ability to repossess your property.

Pros and cons of a personal loan

Personal loans have certain advantages over other types of credit, but they might not be the best option for every borrower or every situation. Weigh the pros and cons before taking out a personal loan.

How to compare lenders

Here are some tips for comparing personal loans for service members:

• Prequalify with multiple lenders: Many personal loan lenders let you prequalify for a loan online. This process won't impact your credit, and it can let you preview the APR and other terms you might qualify for without committing to a specific lender. Prequalification is not an offer of credit, and the final rate you receive may differ from the estimate. Note that when you apply, most lenders will conduct a hard credit check, which could temporarily ding your score.
• Review the APR: The lower the APR, the lower your monthly payment could be. The APR is the best way to compare loans, as it accounts for the interest rate and upfront fees. A personal loan calculator can help you estimate your long-term costs based on your loan amount, repayment term, and APR.
• Consider repayment terms: The longer your repayment term, the more interest you may pay and the longer it can take to pay off. Most personal loan lenders offer repayment terms from two to seven years. Home improvement loans may have longer repayment terms, such as 15 or more years.
• Look for available discounts: Find out if the lender offers any member benefits or rate discounts that could save you money. For example, some credit unions provide members with special perks, such as deals on car rentals and auto insurance. Banks and online lenders may reduce your interest rate slightly if you set up automatic loan payments.
• Determine if you need a cosigner or co-borrower: A cosigner signs the loan with you and agrees to pay back the loan if you default. Cosigners do not have access to any of the loan funds. A co-borrower has the same responsibilities, but unlike a cosigner, they have equal access to the loan funds. If you need a cosigner, look for lenders that allow them, as not all do.
• Look at secured loan options: Secured loans require collateral, such as a CD, your car, or a savings account. Consider these loans if you have fair or bad credit, as they may have no credit check and low APRs. While you can get a lower APR because of collateral, you risk losing your asset to the lender if you default.
• Consider funding time: Look for lenders that can disburse your funds quickly if that's important. Most lenders can send your money as soon as the same or next business day after approval. Some can take up to a week.
• Read lender reviews: Before picking a lender, check customer reviews to see what other borrowers say. It's also worth evaluating the lender's customer support options and any protections it may provide if you run into financial hardship down the line. Check out Trustpilot and Better Business Bureau (BBB).

Check Out: How To Compare Personal Loans

How to apply for a military personal loan

When you're ready to apply for a military loan, here are the general steps you'll need to take:

1. Check eligibility for grants and other options: Before you begin the process for a personal loan, consider checking your eligibility for any grants or other financial assistance programs. These options typically don't require you to repay.
2. Review your credit: A strong credit score can help you qualify for the best rates and terms on a personal loan. Check your score using Credible's free credit monitoring tool, or through your bank or credit card issuer. You can also get a free credit report once a year from AnnualCreditReport.com and review it for any incorrect information.
3. Shop around and prequalify: Research lenders that have the APR, loan amount, and terms you're looking for. Prequalify for loans, if possible, to compare your quotes without harming your credit score. The prequalification form may require your Social Security number and personal information, such as your address and date of birth. This information is typically required to proceed with prequalification. When you prequalify, it's not an offer of credit, and your final rate may differ from the quote.
4. Submit a loan application: Once you've chosen a lender, complete and submit a formal loan application. The lender will perform a hard credit check, only temporarily hurting your score.
5. Gather your documentation: The specific requirements can vary by lender, but you may need to provide pay stubs, tax returns, and bank statements.
6. Get your funds: Once approved, some lenders can disburse funds the same or next business day, while others may take a few business days.

Learn More: How To Get a Personal Loan

Other options for service members and veterans

Before taking out a loan, explore your options for free grants and financial assistance for veterans and service members. Here are a few programs you might qualify for:

• Contact your military service relief organization: You may be able to get assistance from your military service relief organization. Grants or interest-free loans may be available from the Army Emergency Relief, Navy-Marine Corps Relief Society, Air Force Aid Society, and Coast Guard Mutual Assistance.
• American Legion: The American Legion offers a Temporary Financial Assistance grant up to $1,500 for qualifying veterans with a child 17 or younger.
• Disability housing grants: The U.S. Department of Veterans Affairs offers disability grants such as the Specially Adapted Housing (SAH) Grant, Special Home Adaptation (SHA) Grant, and Temporary Residence Adaptation (TRA) Grant. These grants can provide money for building, renovating, or installing accommodations in a home.
• Operation First Response: This charitable group offers funds for groceries, mortgage payments, and other essentials to disabled veterans and their families.
• Total and Permanent Disability Discharge: If you owe federal student loans, you may be able to get them canceled through this program.
• USA Cares: If you're a service member who served after 9/11, you may qualify for emergency financial assistance through this program.
• VA Disability Compensation: Qualifying veterans can qualify for tax-free monthly payments through the VA's disability compensation benefit.
• VFW's Financial Assistance for Service Members: This program has a $2,500 grant for daily necessities to eligible service members on active duty.
• Get help from your local Red Cross chapter: Contact your local Red Cross for support.
• Other services and programs: You can find more information about other available programs by visiting the National Resource Directory.

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best loans for the military. We chose the best lenders based on the following weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible’s team of experts gathered information from each lender’s website and from our partners directly. We also considered each of our partner lenders’ statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it’s accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.