The problem with poor credit scores is not the score itself, but the effect it has on lenders when they consider a loan application. But the good news is that it does not have to convince them to reject it. For military personnel, it is possible to secure even a $20,000 military loan with bad credit.
Normally, the terms such loans come with are far from being the best, but lending to the military prompts many lenders to make certain allowances. There are several reasons why this is that case, with the degree of job security that comes with being a government employee the principal one. Even fast loan approval is available, despite poor credit scores.
As always, however, there are criteria that must be met before qualifying for a military loan. And it is important to note there is no such thing as guaranteed approval.
Why Military Personnel Get the Breaks
It may seem unfair that members of the military have access to a range of better terms and conditions than civilian applicants. But the fact is that granting a $20,000 military loan with bad credit is much less of a risk than granting the same sum to a member of the public. Why? Well, job security is the key reason.
As employees of the US government, there is practically no chance of military personnel suddenly being made redundant, and losing their means of making loan repayments. This is a kind of security that ensures larger loans than normal are within reach, and fast loan approval is hard not to justify.
What is more, because repayments are made via an installment schedule, the chances of defaulting on the loan are practically nil. Military loan repayments are deducted from the monthly pay, and diverted directly to the lender.
How To Qualify
So, what are the criteria that must be satisfied before getting a $20,000 military loan with bad credit becomes a realistic possibility? Well, as always there are basic criteria to meet, relating to age (over 18), nationality (US citizen), and employment status.
Given an applicant must also be a member of the military, those conditions are already confirmed. The only matter at issue is affordability. Once proof of military status is provided, the lender will assess whether repayments can be made by checking the existing debt and expenditure against the monthly income.
The process is not too time consuming, so fast loan approval is possible. However, the debt-to-income ratio is the key element. It provides for no more than 40% of income to be used to repay debts, so the size of the monthly military loan repayment must be within that limit.
Why Is Bad Credit Not Important?
Perhaps it seems unclear why lenders are willing to completely ignore credit history despite the fact an applicant is seeking a $20,000 military loan with bad credit. The fact is that credit scores are not such a big deal.
Normally, they directly affect the interest rate charged, which in turn affects the affordability of a loan. However, given that job security is so high and that repayments are deducted from the paycheck, there is practically no risk involved. Thus, a fast loan approval is viable.
Excluding credit checks from the application assessment process really just removes an unnecessary time-consuming aspect of it. As long as the right boxes are ticked, then even a large military loan can be secured without the benefit of a good credit history.