What Are Military Car Loans?

Are you a service member? You and your comrades-in-arms have a special privilege when you need to take out an auto loan. Military auto loans are made especially for members of military service. Read on to learn more about these loans.

Overview
Like what has just been mentioned, military auto loans are exclusive to military personnel. These loans offer lower interest rates, no prepayment penalty, flexible payments terms and even 100% financing. They are not too good to be true because they are really made to be advantageous to those who are serving the country with their lives.

To qualify, you need to present your credit and proofs of income and active military service. Some lenders have minimum tenure required; others don’t have. Veterans can also take advantage of this privilege, but terms may slightly vary from regular military auto loans.

It is actually easier to get approved for a military auto loan than in civilian loans, as long as you meet the requirements. This is because they are subsidized by the government. In other words, you are backed by the government. However, some lenders have their own restrictions in terms of eligibility requirements.

Benefits
Military auto loans are not unfair if they have better terms and more perks than the auto loans for civilians. Again, these loans are subsidized by the government because they are more of an expression of gratitude towards servicemembers than a profit source.

The biggest advantage, perhaps, of military auto loans is the lower annual percentage rates or APRs offered. Compare them with regular auto loan rates and you’ll understand better. Getting qualified is also easier. The ranges of credit scores that military lenders consider as good and bad differ from those used in evaluating civilian borrowers. They are more lenient. What is considered bad credit in a regular auto loan may still be in the good-credit range in military auto loans.

In general, servicemembers are not also required to be in the United States to apply for an auto loan. They can ask a family member or someone they trust to do it for them. They can even let someone make the payments to the lender. This is permitted so that servicemembers won’t get distracted while deployed.

And lastly, applications for military car loans can be conveniently and quickly accomplished online. Military borrowers do not have to spend their days for R and R on visiting lenders to complete applications. They can do everything online instead at their most convenient time.

Flaws
Some lenders may have restrictions that can make the military financing program limited. For example, you might not get approved for a military auto loan if you haven’t reached the minimum number of years of service required. Some lenders do not also allow anyone to file an application except the servicemember himself or herself.

Another flaw in military auto loans is the high interest rates you may encounter if you have bad credit. Although we’ve mentioned earlier that military auto loans have lower interest rates than regular loans, the same rule that bad credit gets higher interest rate still applies. Why? Lenders still take a risk when they do business with servicemembers with poor credit history. Those who work in military cannot increase their income fast when they need to, unlike civilians.

As a final note, consider comparing auto loans—military and regular—before agreeing to an offer. It is possible to find a regular auto loan better than a military car loan. If you have the time, do some math yourself as well.
 
     

 

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Auto Approval Center is a lead provider to lenders around the US. Average APR rates range from 3.2% to 24% depending on credit. Some dealers/lenders may have implications for non-payment or late payments, please see your specific terms for more information. By applying with Auto Approval Center, you agree to have your credit pulled for lending purposes and this could have an impact to your credit score. Thank You for your business!
 

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