Military Debt Consolidation Loans

There are special recognitions given by many institutions to those who wore the uniform and served our country. These recognition ranges from substantial services like financial instruments that are dedicated to those who are on active duty or those who have served before; and there are those small discounts from retail establishments and restaurants. These services are a great way of showing our appreciation to those who have served in our place to protect our country and its interests.

When you offer your body to the service of your country, sadly, there are those who do not make it back home whole, there are some who do not make it home at all. These are the cases that leave your loved ones in a dire situation, especially if it were the sole bread winner in the family.

Here are some services that are some reputable institutions dedicated to helping our military and veterans, and their family in their time of need:

Mortgage Lender

Veterans United Home Loans

This company is the largest VA provider in the US where those who qualify can obtain loans from $150,000 to $725,000 for hybrid mortgage or fixed rates. Not only is this the best mortgage provider, it has also earned a triple A+ rating from the Better Business Bureau which makes it one of the best choice for veterans.

New Day USA

New Day USA offers refinancing for the mortgage needs of veterans and their family members. They offer free VA appraisal that is usually priced at $500, and they can give loans up to 100 percent value of the home. Borrowers can also opt for the credit card debt consolidation to help them with other debts. The company takes into account the entire financial profile of the borrower and not just the FICO scores in making their decisions for lending, which allows even those with less than perfect score to qualify.

Federal Housing Administration (FHA)

This is another alternative to Veterans Administration Loans or Federal Housing Loans for veterans who are looking for options in financing their homes. Since the other options specialize on assisting the active military members to acquire affordable home loans, FHA is the best option for those veterans who need to reestablish eligibility with VA. For a 3.5 percent down payment, they get to have the loan service they need. This stands in contrast to the VA, which has an additional fee ranging from 0.5 to 3.3 percent.

Credit Unions / Banks

USAA

Veterans, military personnel, and eligible family members can get financial services from the most prominent Credit Union around.

Navy Federal Credit Union

Navy Federal Credit Union is open to all those in active duty, military personnel, veterans, and eligible family members; despite the name. Their services are available for those who are in the Army, Marines, Air Force, and the Coast Guard, and not just the Navy. Their auto loans can go as low as 1.49 percent and their mortgages can go as low as 3.361 percent depending on individual circumstances.

Personal Loans

Omni Financial Military Loans

Omni Financial Military Loans offer application online and personal application where eligible borrowers for personal loans can get approval for a $500 loan to a $10,000 loan. Military personnel can apply online or through one of their brick-and-mortar store fronts. Those that are stationed overseas can still take advantage of their services by filling out their online application. Those who get qualified to get a personal loan have the options to get the funds through a direct deposit to their bank, pick up a check, or get on online prepaid virtual Visa card.

Pioneer Services

This is another lending option for our bothers in arms looking for personal loans. All the borrower needs to do is to process the online application form or apply for the loan through the phone. During this process, they are evaluated based on their proprietary Military Score. Once qualified, they can choose from several loan options like personal loans, bereavement loans, disaster relief, and convalescent leaves.

Lending Club

This is an option that is available to the general public and can be accessed online. Even though the Lending Club caters to everyone, military personnel have distinct advantage due to the information included in the prospective borrower’s personal and financial profile. The only requirement for borrowers is to have at least a FICO score of 640 to qualify for the LendingClub loans.

Business Loans

Small Business Administration (SBA) Patriot Express Loan Program

The Patriot Express Loan Program is a collaboration instituted by the Small Business Administration with banks and lending facilities across the country. Borrowers who get approved for this loan can get as much as $500,000, and funds can be used for endeavors like starting a business or any business-related real estate acquisitions.

The transition to civilian life from the military can bring some financial challenges during the first few years as you try to establish a more stable outlook. This could be a very trying time, but veterans have no need to fret because there are specialized tools designed to help them as they strive through this challenge. Here are some points to explain Military Debt Consolidation Loans, and give you a better idea for a more informed decision:

A Military Debt Consolidation Loan (MDCL) is a home equity loan

This means this is a secure loan that will allow you to borrow the amount of your home.

You must have a VA home loan in order to qualify

This is sort of a second mortgage that is especially for Veterans because you need to have a previous home loan to qualify. If you purchased your home without going through VA, you will be deemed not eligible for this option.

An MDCL is a “cash-out” loan on your home

Since you are borrowing from the equity of your home, your cash out will be the total value of your house minus the mortgage balance. For example, if your home costs $120,000, and you still have $80,000 left to pay, MDCL will give you a net cash out of $40,000 to pay off your other debts like your credit card purchases.

You will have to pay closing costs

Borrowers are required to close the loans when modifying or refinancing to take out a second mortgage. It usually costs 1 percent to 5 percent, and whatever this cost may be, MDCL will cover that amount for the new loan.

A MDCL is not a loan issued by the VA

The VA does not issue the loan, they simply guarantee 25 percent of the loan to allow veterans get loans on a much lower rate. There are private financial institutions that issue the loans much like any civilian loan and not the VA.

An MDCL increases your financial risk

Members who are in active service are offered a service that includes protection against foreclosure when they are unable to meet payments since they are deployed. This is a one of the key financial protections provided by the Service Members Civil Relief Act. Veterans are not eligible for the same protection since this is only offered to those who are deployed. This is why it is all the more important to look for the best option for your loan.

The MDCL will increase your monthly payments

Do not get shocked when you see your monthly bill since the MDCL loan payments will be slightly higher than your VA mortgage since the financed amount is bigger. Just remember, you have already consolidated all your loans and obligations and you have nothing left to cover.

Market conditions matter

MDCL is still based on current market conditions and will impact the rate you will receive on your loan. Current condition can affect your loan rate but your VA can help get you a much lower package. Watch the market when looking into getting a loan, if you apply when the rates are high, and then you will get a higher rate and you will have to pay a little bit more.

If you don’t have equity, an MDCL won’t work

Like what we have discussed in the first point, if there is no home to get equity from, then there cannot be any loan. The same goes with the total value of your home and the amount of loan you want to get approved for; you need to have that significant amount to match the amount of loan you want to get.

An MDCL is not your only option

If you think MDCL is not the best option since you do not have that much equity, you can go for other options like a debt management program that will help you find other options. There are institutions out there that can provide certified credit counseling that will allow you to consolidate your debt without borrowing.