For any member of the armed services, military auto loans are an excellent method for securing a car loan. Often military personnel have at their disposal the opportunity to get a loan at a lower rate of interest and with a longer payback period.
Lenders of loans to military personnel understand that the traditional ways of acquiring good credit, such as applying for and using department store credit cards, gas cards, etc., are not often available to people deployed overseas for long periods of time. Because of this, low rate car loans and even bad credit car loans exist for military members so they can get the car they need without having to worry about their poor credit rating.
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In short, military car loans are car loans specifically for those who are actively serving in the military. They are low rate car loans with perks such as 100% financing and no prepayment penalty. Military loan programs are great for getting a car loan if you meet the requirements because they have many special benefits as a sort of thank-you for serving your country.
To qualify for a military car loan, you need to have proof of being in active military service. There isn't a specific length of time for which you need to have served as long as you are currently active. (If you are an inactive veteran, you can apply for a veteran military loan instead, which frequently carry even more benefits than the regular military loan.) You will need to submit to a credit check, the same as you would with a normal loan. If you meet the qualifications, military car loans are much easier to secure than normal loans and you should get the money you apply for right away.
Nearly all members of the armed services are eligible for a military car loan. They typically offer lower interest rates and longer repayment terms which reduce monthly payments and save the borrower money in the long run. There are even insurance premiums designed for military personnel that are less than for civilians.
People applying for military car loans can also receive 100% financing on the new or used car they want to purchase, meaning there is no requirement for money up front. The car can be used anywhere in the continental U.S. or overseas with the appropriate insurance.
As a current member of the armed forces, you are considered a good risk as you receive a steady monthly income. You can also set up an automatic payment plan whereby the monthly payment is withdrawn automatically from your checking account each month. Another benefit of a military car loan is that you will face no prepayment penalty if the calculated interest is paid off of your loan prior to maturity. This means you won't be penalized if you pay off the interest sooner than expected.
Approval for military members is generally much quicker than for civilians. All you need to provide to the lender is proof of service, a social security number and a permanent address, and the application process is underway. If you currently serve in the armed forces, know that there are many options available to you to help you secure a loan for a new or used automobile. The terms of financing are better and take into consideration the fact that you might be stationed overseas and haven't had a chance to build good credit. Even if you have bad credit you can still get a good car loan because there are many lenders who know what it is like to be in your position. Look into it for yourself, and don't worry about your bad credit. There is a car and a car loan with good terms for you.
There are advantages to service members in the armed forces when applying for military car loans over conventional bank loans.
Prior to submitting a loan application online for a military car loan, a service member should do a check of their credit history to determine which loan type may be best suited to their needs. Under federal law, every person is entitled to a free annual credit report.
These reports are maintained by the three major credit-reporting bureaus and contain detailed information on a person's creditworthiness. Using a scoring system that ranges from 300 to 900, the lower the person's credit score, the more difficult it becomes to borrow. Viewing your credit report makes it easy to spot mistakes and discrepancies, as well as address any outstanding credit items.
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Many military car loans are unsecured or signature loans. Unsecured loans do not require collateral and are based on some factor of good faith, such as military service. That the loan may be unsecured does not mean however that the lender simply throws open their doors and gives a service member whatever amount they request.
A service member should become familiar with an online car loan calculator and other similar tools to determine the appropriate loan amount. These calculators take into account trade-in values, down payments, credit risk, interest rates and other factors to determine the appropriate amount to borrow. Using these tools will give the service member a good start to the loan application and the type of vehicle they should consider.
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Compare Loans
When a service member applies for a military car loan, they should compare the loan's rates and terms to those of traditional car loans. This comparison will help determine if the rate being offered on the military car loan is the best available rate or if a better deal can be obtained going the traditional car loan route. An individual with an excellent credit rating and good financial resources may find that traditional lenders may negotiate an even better loan rate than what the military car loan can offer. The service member can use their service as leverage in order to bring the interest rate down or lower any requirements such as down payments, request 0 percent financing or eliminate pre-payment penalties.
Making the Application
Once all of the documents and comparisons have been completed, the service member is ready to finish the loan application. The work done upfront to research the loan and determine the best rate and approach will culminate in obtaining a military car loan that is specific to the service member's financial situation and needs. This will allow the lender and borrower a way to walk away from the application feeling good about the terms and conditions of the loan and permits the service member to finance the purchase of their vehicle.
Finding low-rate car loans that are available to you is not difficult, but you should be aware of a few things before you sign on the dotted line so you don't end up over your head. Most lenders to military personnel are honest and wish to provide a good service, but as with anything, there are unscrupulous people out there. These are a few tips to give you some ideas of what to expect and what to watch out for.
Applying for a military car loan has many advantages for service men and women of the Army, Navy, Air Force and Marine Corps. There are also some disadvantages to these types of loans that must be considered as well before applying. Understanding what they may be will help a service member or their family be informed and make a good decision about applying for a military car loan.
