`Military members sacrifice a great deal. They are forced to travel on a whim, leave their families, put their lives in danger, and give up many of the benefits available to civilians. In exchange for their sacrifices, active duty military members and once they leave the service—as well as those with a service-connected disability—veterans are entitled to a number of benefits that aren’t available to civilians. One of the most beneficial is personal loans for veterans.
Vets have access to a variety of loan programs that are designed to help them get on their feet once their service is complete and to help them reach their goals throughout their entire lives.
Many loans for veterans make it easier to borrow money by reducing the requirements to qualify for a loan and by keeping interest rates low, so borrowing the money is more affordable. Loans are also available for a variety of purposes, including purchasing a home, starting a business, and school fees.
What should you know about loans for veterans and how they might help you if you served time in the military?
Mortgage Loans for Veterans
Buying a home can be challenging for anyone. In addition to the money you need to make the purchase, you also need to find a home that’s suitable for you and your family. It needs to be in a neighborhood or general area that is safe and convenient and it should be a smart overall financial investment.
Military veterans who want to buy a home have a few options when it comes to financing. Many of the programs currently in place have been operating since the mid-1900s and have helped millions of veterans move into homes of their own.
Veterans’ loans typically offer great terms and have fewer requirements. Someone who might not qualify for a conventional mortgage loan might qualify for a veterans’ loan because of their service. Many of these loans don’t even use credit history or proof of income as a determining factor and don’t require a down payment.
Veterans’ loans might also be available for National Guard or reservists in addition to other members of the armed forces.
Business Loans for Veterans
Many veterans have a desire to start a business once they are finished with their military service. They feel the military has taught them the skills needed to be self-starters and manage all of the aspects of running a business.
One of the necessities of starting a business is start-up capital, one of the greatest challenges faced by anyone thinking of starting a business.
There are several VA loan options for potential business owners, including ones from the Small Business Administration (SBA). The SBA even has an Office of Veterans Affairs that works with vets to get them low-interest loans start a business. There are two VA small business loans available, including the Patriot Express Pilot Loan Initiative and the Military Reservist Economic Injury Disaster Loan.
In addition to the loans, the SBA also offers counseling and training for potential business owners and ongoing support for business owners who are veterans.
Businesses must be majority owned by a veteran to qualify for these loans and cannot be categorized as a pyramid or multi-level marketing businesses, be related to gambling or be a lending business. They must also be for-profit.
Loan money can be used for most business purposes, including start-up costs, purchasing real estate and equipment, business management, investing in inventory to sell, expanding, and setting up to contract services. Keep in mind, like VA mortgage loans the money does not actually come from the VA. Instead, the VA guarantees the loan, which means it promises to take the fall if the lending institution—a bank or credit union—lends the money and the veteran borrower fails to meet his or her obligation. The Patriot Loan Program guarantees 85% of up to $150,000 and 75% of the amount borrowed from $175,000 and $500,000.
Loans for less than $25,000 do not require the borrower to put up any capital. Loans between $25,000 and $350,000 allow the lending institution to utilize its regular capital requirements.
Interest rates on veterans loans are typically low and small business loans are no exception. Most range between 2.25% and 4.75% over the current prime rate. It is possible to negotiate a better rate.
Education Loans for Veterans
Another loan for veterans providing funding for attending school. These loan programs allow vets to borrow money for college tuition at a low-interest rate. In some cases, there is grant money available, which is money that doesn’t need to be repaid.
These loans are different than the GI Bill. They are paid for by the US Department of Education, but can still be used to pay for tuition, as well as fees and books. Because the remaining loan balance is paid to you after the school takes tuition expenses, the funds can also be used to pay for living expenses while attending school.
All military members are eligible for financial aid through the problem, whether they are on active duty, reservists, veterans or retirees. The programs are also available to those who are also using the GI Bill. It doesn’t matter your age either and many older adults who are veterans have used the grant programs to pay to attend college as they near or have already retired.
In most cases, federal student aid loans for veterans are based on financial need, as well as several other factors. To qualify, you must be a US citizen or eligible non-citizen, have a valid SSI number, register with selective service, and maintain a GPA of 2.0 or above while attending college. Trade school attendees must be on track to graduate within 150% of their expected time frame.
You must also be a high school graduate or GED recipient, meet any standards set out by your state, and if you attended homeschool, show that it was a valid program.
These loan programs are in place to ensure veterans have as many opportunities as possible and receive the support they need as they establish themselves in civilian life.