Disadvantages of Military Loans

Military loans are provided to individuals serving or who have served in the Army, Navy, Air Force and Marine Corps as well as Army and Air National Guard. This includes both active duty, reservists and individuals who have served in the military and have since retired, including war veterans. These loans are provided through private lenders and help military service members and their family members meet their financial obligations.

Income and Credit Requirements

A service member or family member who takes out a military loan needs to meet the qualifications of the lender extending the loan terms. This includes income and credit requirements that may disqualify some military members and their families, particularly during times of service when income is low and the main provider is in active duty.

Lower Borrowing Limits

The amounts available under a military loan are usually between $5,000 and $100,000. Special approval is needed for larger loan amounts and it may not have the same guarantee from the Department of Defense as loans of lower amounts. A private lender that does not participate in the military loan program may be able to offer better terms and a larger loan for certain types of purchases.

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