Veterans transitioning to civilian life often face financial challenges, such as loss of military benefits or difficulty finding a job. They may need to rely on grants or other financial assistance, or perhaps take out a personal loan.
“Part of the transition challenge is there are things that go away; maybe it’s a tax-free housing allowance, tax advantages or health care that comes with little or no cost on the military side,” says J.J. Montanaro, an Army veteran and financial planner with USAA.
A personal loan — money borrowed from a bank, credit union or online lender that’s paid back in fixed monthly installments — may be an option for veterans looking to cover large unexpected expenses or consolidate high-interest credit card debt.
Some lenders cater to veterans and active members of the military, including those with bad credit, defined as a credit score below 630. Other lenders provide personal loan options regardless of your veteran or military status.
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Personal loans for veterans with bad credit
Bad credit means you likely will pay a higher rate on a personal loan, so you might want to first explore other quick ways to borrow money.
If you’ve determined a personal loan is your best option, know that getting a loan requires a few steps, and you’ll want to check your credit score and shop multiple lenders. Options include online lenders and credit unions, some of which cater to veterans and may offer lower rates and more flexible terms for bad credit borrowers.
ONLINE PERSONAL LOANS FOR bad CREDIT
• APRs: 17.59%-35.99%
• Loan amount: $1,500-$25,000
• Loan terms: 1 to 5 years
• Minimum credit score: None, but borrowers average 600 to 650
• Time to funding: Same day to up to three days
• Fees: Origination and late fees; both vary by state
OneMain provides bad credit personal loans ranging from $1,500 to $25,000. The lender does not have a minimum personal credit score or gross income requirement. Its borrowers’ average credit scores are between 600 and 650.
While you can start your application online, OneMain typically requires an in-person visit to one of its 1,600 branches to complete the process. With APRs ranging from 17.59% to 35.99%, it’s one of the more expensive personal loan options.
•APR: 9.95% - 35.99%
•Loan amount: $2,000 - $35,000
•Loan terms: 2 to 5 years
•Minimum credit score: 580, but borrowers’ average range is 600 to 700
•Time to funding: Average of 2 days
•Fees: Origination fee of 4.75% of loan amount; fees for late payment and unsuccessful payment
Avant focuses on consumers with low credit scores. The lender requires a minimum credit score of 580, although its average borrower’s score ranges from 600 to 700. The lender does not have a strict gross income minimum, but applicants generally earn at least $40,000 a year.
•APR: 15.49% - 34.99%
•Loan amount: $2,000 - $25,000
•Loan terms: 2 to 4 years
•Minimum credit score: 600
•Time to funding: Next day, in some cases
•Fees: Origination fee of up to 6% of loan amount; fees for late payment
LendingPoint is an option if you have bad credit and need fast cash for an emergency, with funding as fast as the next day in some cases. The lender requires a minimum credit score of 600, but it also considers factors such as employment status, credit history and debt-to-income ratio.
Personal loans from credit unions
Navy Federal Credit Union: Navy Federal is the world’s largest credit union, with more than 7 million members. You can become a member if you are active-duty military, a veteran, a Department of Defense civilian employee, or a family member of any current member.
Navy Federal offers members personal loans up to $50,000, with repayment periods up to 15 years and rates of 7.39% to 18%.
USAA: Membership at this bank is free and open to active military, veterans, spouses and surviving spouses of USAA members, individuals whose parents are or were USAA members, and former USAA members.
Its loans range from $2,500 to $50,000, with repayment periods from two to seven years and APRs of 8.99% to 18%. Funds are available in your USAA account by the next day, according to the company. Borrowers with excellent credit qualify for USAA’s lowest rate of 8.99%, which includes a 0.25% discount for automatic payments.
USAA also provides resources to assist with the transition from active duty to veteran status.
» MORE: Read NerdWallet’s review of USAA
Personal loans for veterans with good credit
Borrowers with good credit (a score of 690 or higher) who need fast funding and prefer not to visit a physical bank branch can consider online lenders.
Online personal loans for good credit
•APR: 3.09% to 14.24% with AutoPay; 3.59% to 14.74% without AutoPay
•Loan amount: $5,000 - $100,000
•Loan terms: 2 to 7 years
•Minimum credit score: 660
•Time to funding: As soon as the same day
Lightstream and SoFi offer low starting interest rates and long repayment terms, which can help keep monthly payments lower.
Lightstream funds loans as soon as the same day. There are no origination fees or late fees on its personal loans. You’ll need strong credit (a minimum score of 660), as well as several years of credit history with a variety of accounts to qualify.
• APR: 5.0% - 15.0% (fixed and variable rates)
• Loan amount: $5,000 - $100,000
• Loan terms: 3 to 7 years
• Minimum credit score: 660
• Time to funding: Typically 7 days
• Fees: Late fee is the lesser of 4% of payment or $5
SoFi’s funding takes longer than Lightstream, typically three to seven days. Like Lightstream, its loans carry no origination fees or prepayment penalties. The difference: SoFi has no minimum credit history requirement. However, you’ll likely need high income to qualify; SoFi’s typical borrower has a median income of $101,000.
Financial assistance, grants and resources for veterans
Veterans seeking personal loans or short-term emergency cash may have other resources available, such as grants, which provide free money with no repayment required, and financial assistance. Here’s a list of some potential resources.
Financial assistance and benefits
U.S. Department of Veterans Affairs: The VA’s annual guide to federal benefits for veterans, dependents and survivors offers information on disability compensation, housing grants for disabled veterans and educational assistance.
A veteran service officer at the National Veterans Foundation can help you write and submit benefits claims to the VA.
The Coalition to Salute America’s Heroes: This nonprofit helps veterans cover expenses such as utility bills, car and mortgage payments, and medical bills for wounded veterans and families of Operation Enduring Freedom, Operation Iraqi Freedom and Operation New Dawn. Applicants must meet eligibility requirements to be considered for financial aid and other services.
Job training and placement
Blue Star Families: This nonprofit organization provides free resources and services to more than 1.5 million military families, such as training and job placement, career networking events and mentoring.
Hiring Our Heroes: The U.S. Chamber of Commerce launched this nationwide initiative to help veterans, transitioning service members and military spouses find employment opportunities. Hiring Our Heroes hosts free job fairs throughout the country, and also offers a corporate fellowship program, resources for creating a resume, and access to thousands of volunteer mentors.
Rebuild Hope: This volunteer-driven nonprofit provides financial counseling to disabled Iraq and Afghanistan veterans and their families. Qualified applicants may receive emergency financial assistance grants between $1,500 and $2,000.
Unmet Needs Program: The Veterans of Foreign Wars offers this program for military families who have financial difficulties stemming from deployment or other military-related activity or injury.
It provides grants up to $1,500 and can be used for eligible expenses, which include household expenses, car repairs, utilities, food and clothing and medical bills.
Modest Needs Homecoming Heroes Grant: This nonprofit corporation offers a financial assistance grant to eligible military veterans who have recently returned from overseas deployment. The grant helps with one-time emergency expenses or a temporary loss of income.
The American Legion: This nonprofit veterans organization offers a Temporary Financial Assistance program, which awards cash grants of up to $1,500 to children of current active-duty or American Legion members.
Business grants and resources: Veterans looking to start a business or existing business owners can seek financial assistance through small-business grants, as well as education and training programs aimed at helping veteran entrepreneurs.