Transitioning from/ balancing military and civilian life can prove an uphill task. And, many active and retired servicemen/ women often face financial troubles, barely being able to keep up with the bills. That often ends in accumulated debts, most of which are defaulted.
Yet, debts should be the last thing to worry you during and after service. Issues about late payment of bills, defaulted loans, accumulated interests, and how they’ll affect your credit score shouldn’t come in the way of your service delivery.
That’s why we have debt consolidation for military and veterans with bad credit. These loan products will help prevent you from sinking deeper into a financial mess or get back to your feet if you already had. We discuss all that.
Debt consolidation involves taking one loan to clear smaller debts. Consolidation, instead of paying multiple lenders differently, lets you merge your repayments. Such include credit card issuers and other lenders.
Rolling your debts into a single repayment often means paying lower interest rates, which is the main idea behind debt consolidation.
Military members and veterans can also consolidate their loans. They can also take advantage of the 0% introductory interest offer on credit card balance transfer.
A 0% introductory interest means paying 17.3% on APR. Such saves you some bucks on interests hence the ability to pay the loan even faster.
However, debt consolidation loans for mortgage refinancing are only available to servicemen or veterans already having VA home loans.
This way, they can also receive a cash payout to offset their other bills. But, the value of the appraised home must be higher than what you owe on it. Please note, however, that consolidation will often involve paying closing costs.
For credit card debt consolidation, remember, you are taking an unsecured loan and turning it into a secured one with your home on the line.
Combining debts into a single loan with simplified repayments and the lowest interest rates can make the process of debt elimination quicker and more efficient, especially to military men/ women and veterans.
That’s why the federal government and different private organizations continue to work to make these loans available for these important persons of the society. The following are the options those in service and veterans can explore;
Low credit requirements – most veteran and military debt consolidation loan lenders don’t lay much emphasis on the credit score of the borrower. Lenders like OneMain Financial, Navy Federal, and USAA don’t even have a minimum credit score requirement. This makes the loans accessible to everyone and the application process even easier
Borrowers using their homes as security could lose equity to their homes. A single bad decision could have you losing a property a worked all your life to acquire
Longer repayment terms – You’ll have between 10 to 30 years to repay your debt consolidation loan. You could even get something longer than this depending on your present needs and your relationship with your lender. With a longer-term, you’ll have lower, manageable monthly repayments hardly messing up your budget for the month. And that fits the definition of cheap.
Longer repayment terms, though will reduce your monthly repayment amount, will have you paying interest for a long time. That could make it even more expensive than it would have been if you just paid the lenders directly
Low-interest rates – the whole point of consolidation is to find lower rates. Most debt consolidation loans have such. Debt consolidation loans for veterans and active service members have their interest rates capped at 6% making the loans cheapLow-interest rates – the whole point of consolidation is to find lower rates. Most debt consolidation loans have such. Debt consolidation loans for veterans and active service members have their interest rates capped at 6% making the loans cheap
Debt consolidation for military and veterans puts you at the risk of foreclosure
Integrates loans into a single repayment – consolidation helps you bring together different loans into a single debt with single monthly repayments. That makes them manageable and easy to keep up with repayments
Different lenders will vet borrowers differently based on their set policies. However, some basic requirements are similar across all lenders and are required by law.
For instance, a borrower must be a legal permanent resident of the United States at the time of application. The law also requires that a borrower must have attained the age of majority during the application, usually 18 years
For verification, a lender will also require a copy of your ID, valid driving license, or travel passport.
Such details as name, social security number, and address will also be required.
As the name suggests, debt consolidation loans for military and veterans are preserved for those presently serving or who have retired from the military.
Though most lenders won’t be strict on your credit profile, having a credit score above 650 can give you an upper hand. You’ll get even lower rates and flexible repayment terms.
Consider prequalifying to know suitable lenders and the interest rates and monthly repayment you’ll part with. You’ll know all this without negatively affecting your scores unlike in the case of hard credit checks.
Compare different lenders, thoroughly going through their policies and offers till you get the one that best suits your needs. Then submit a formal application and await the lender’s response.
The debt settlement option is meant for active servicemen/women and veterans who are not homeowners or who otherwise don’t qualify for consolidation. A larger percentage of such are those with bad credit scores.
The services are offered by debt settlement agencies. They negotiate with your lenders on your behalf to reduce the total amount you owe. This applies to any debts including credit card debts, mortgages, and personal loans.
Medical bills, federal and private student loans are also common debt settlement targets. Presently, debt settlement agencies have also started covering phone bills, utility bills.
Debt settlement is a viable option to bankruptcy, for borrowers who have sunk deeper in debts, auto repossession balances, and apartment leases.
Debt settlement agencies consist of experienced individuals who can drive hard bargains.
However, here’s the catch, and their services may be considered expensive by most borrowers.
Apart from money, there’s also the issue of time involved. It could take a borrower up to 48 months to raise enough money to start negotiations. The whole time, interests and penalties will keep growing, at times to an alarming figure.
And, even after a successful settlement, your credit profile will reflect the same for 7 years. Such will also cost you about 100 points off your credit score.
As you choose a debt settlement company, focus, not only on their fees but their reputation and experience, too. While at it, keep in mind that there are scammers who are robbing you off your hard-earned money.
Be on the watch out for companies with little or no reviews. Also, take companies promising more than anyone can ever deliver as a warning sign.
The following are some of the debt relief options active military members and veterans can explore;
Consolidation involves integrating different multiple loans into a single debt with monthly repayment.
Most creditors won’t consider your credit score. However, a score of above 650 gets you lower rates and flexible terms.
No. in fact, it may even boost it given the fact that you’re paying multiple loans at once and increasing your credit utilization ratio.
Any active service member or veteran with multiple debts looking to pay them off and get back to his/her feet.
Our chosen lenders have an estimated APR of between 6.49% and 35.99%