Military Car Loans: Advantages

There are advantages to service members in the armed forces when applying for military car loans over conventional bank loans. These loans are designed specifically to meet the needs of the men and women who wear the uniform of the 4 military branches, whether Army, Navy, Air Force or Marine Corps. Whether active, inactive, retired, or a member of the National Guard and Reserves, military car loans should be considered by service members when considering the purchase of a new or used vehicle.

These advantages are part of the consideration when applying for a military car loan. Because they are offered exclusively to members of the armed forces through traditional lenders like banks and finance companies, or military credit associations, they are widely available. The loans meet the needs of men and women serving in the United States and overseas and often do not have the same requirements as traditional car loans offered to civilians.

The interest rates, fees and charges such as tax, licensing and origination fees can be lower on military car loans than for other car loans. This is to recognize the extraordinary risks members of the armed forces take to protect this country. The combination of these costs is what comprises the annual percentage rate or APR for the loan. Lowering the APR on a loan, even by 1 to 1-1/2 percentage points translates in a savings of $10 to $15 per $1,000 financed.

Some military loans may be offered without a collateral requirement. These are unsecured loans that are provided as a way to recognize military service and the fact that many enlisted men and women may not always meet the same financial underwriting standards as civilians during the time of their service. This allows military men and women to qualify for financing and to purchase the vehicle of their choice.

The standards for credit risk are slightly lower for military car loans than for traditional car loans. Again, based on the service members' inability to earn the same wages as civilians due to their service, the criteria for determining credit risk is different.

A military person who is stationed in another country or in an active war zone may still have access to individuals who are able to process a military car loan. This could be critical for maintaining the peace and mind of a soldier fighting a war who is worried that their family members back home cannot afford a much needed vehicle. By not requiring the service member to be in the United States in order to apply for a military car loan, this relieves a huge burden and allows the service member to continue to serve.

The military car loan can be handled relatively quicker due to the less stringent requirements and be processed almost instantly. With the service member's military service as collateral, the loan can be approved and the proceeds wired into the member's account within 24 to 48 hours of application.

As long as the service member has access to the Internet, a military car loan can be applied for online. This application can happen anytime and any place in the world at the ease and convenience of the service member.