Even with bad credit, lenders look favorably on car loans for government employees and military personnel because their income is established by the federal government.
Veterans Can Enjoy The Benefits Of Lower Interest Rates
You do not need to be in the military to understand the importance of lower interest rates on new and used car loans. To get an idea of how important getting a lower interest rate is, we can look at two different car financing scenarios and do the math for ourselves.
A $10,000 vehicle being purchased with a five-year loan at five percent interest would have an approximate monthly payment of $190.00. If we drop the interest rate to three percent, then the amount drops to about $180.00 per month. By cutting the interest rate just two points, we were able to save a total of $600 on the full cost of the auto loan. The more you pay for your vehicle, the more you can save on the total cost of your loan with a lower interest rate.
Car loans for military personnel carry lower interest rates than typical average credit loans!
Dropping a few points can be big savings over a few years. Here are some examples of what a few points can do.
$10,000. Loan for 60 months at 6% will cost you $11,600. with established payments of $193.33
$10,000. Loan for 60 months at 4% will cost you $11,050. With established payments of $184.17
You can see the two points can save veterans $550.00 over the time of the loan term.
Auto loan lenders consider all military employment equal. Whether you are Army, Navy, Air Force, Marines, Coast Guard or any Reserves, you are entitled to special benefits when it comes to car loan qualifications.
- Lower interest rates.
- More acceptable credit requirements.
- Terms and conditions that fit your family’s budget.
- Fast approval online with no hassle applications.
- Choice of payment methods.
- Can apply while deployed.
- Lower down payment or no down payment required.
Your Chances Of Being Approved For Military Car Loans Are Much Higher
Lenders offering military car financing with bad credit tend to make it easier for military personnel to qualify for loans than civilians.
There are several factors taken into account for a military member that can affect their pay and some of their other credit considerations. For example, a deployed soldier may qualify for combat pay, which would raise their income status and allow them to be approved for a larger loan amount and better loan terms.
Military Auto Loan Advantages of Borrowing Money
Many lenders look at your credit history and your ability to pay back loans you have had or have now. If your credit is good and you have a history of good loan payments, you will be offered the best rates for your next loan or car refinance.
However, If you have had some credit trouble in the past or haven’t had an opportunity to establish good credit your credit report will reflect a high risk score. With a military job status, many lenders will overlook your history and offer second chance loans to reestablish a good credit rating.
With some lenders, your military job status or reserve status can earn you some borrowing advantages!
- Military auto loan lenders are more interested in your ability to pay back the loan than if you have established a good credit history.
- A lower credit score does not necessarily classify you as high risk.
- Employment in the military shows the lender you have a reliable source of income.
- Your military pay rating shows the lender you have a sufficient income to pay your loan requirement.
Longer Payment Terms with Military Car Loans
Military car loans typically offer the choice of longer payment terms, allowing you to pay over a longer period with lower monthly payments.
Many military car loans are offered with new car incentives that encourage new car purchases over used cars. These can include special rebates for new vehicles.
No money down military car loans are easy to apply for, and by searching our vast lending pool, we find lenders that will match your financial needs. Some are willing to offer 100% financing with no money down.
You May Qualify For Special Discounts
Many lenders who have special service personnel military auto loans programs and offer discounts and promotions to help lower the cost of the loan. You may be able to qualify for a half-point reduction in your interest rate, or you might get free oil changes for life.
The perks can vary from lender to lender, which is why it is a good idea to let us shop around for your auto loan and get the best deal possible.
Your Down Payment Can Be Less
Another area where some lenders like to stretch things for military personnel is in the down payment requirements. An active duty soldier can sometimes find it difficult to make ends meet while deployed. That means that putting together a down payment for a vehicle when he gets home is not always easy.
Many service-related auto loan lenders are lenient on their down payment requirements and some even waive the need for a down payment altogether and offer 100% financing. When you are filling out our simple auto loan application online, you choose the amount of down payment you would like to apply to the purchase.
Your Repayment Schedule Can Be Longer
The average civilian auto loan runs anywhere from 36 to 60 months for repayment terms. With military status, those terms could be as long as 65 to 70 months, depending on the lender.
This is another situation where the unique circumstances of an active duty soldier make it necessary for lenders to create special conditions. A soldier can be deployed and in active combat for some time, and it would be tough for that soldier to make his car payment while he is serving his country.
With these extended repayment terms, the monthly payments become lower. The soldier can come back and know that he is still able to pay his car loan on time. It is another way that different conditions for military personnel make things easier for the soldier and his family.
Military Personnel Find It Easier To Get Auto Loans with Bad Credit
As long as a soldier is still getting their pay from the government, then they have the credit they need to get approved for an auto loan. Some lenders do have stricter requirements than others, but nearly all bad credit lenders can help veterans with not so good credit, get the loan they need at a rate they can afford.
Military Car Loans Can Have Some Disadvantages
Like any loan offer, military car loans can also have a few disadvantages as well.
Some Military Auto Loan Programs offer great discounts and low-interest rates to military persons with good credit. But if your credit score is low they only offer you the higher rates and don’t have acceptable bad credit loan offers. Valley Auto loans offer some of the best rates for bad credit military service veterans.
Military car loans can be limited by the lender, finance company or bank to certain service levels, ranking or time spent in the military. They can also restrict who can apply for the person in the military. Many lenders restrict relatives from applying for a service person stationed overseas.
Some military car loans can require a co-signer if they determine your credit level or credit history is not acceptable. They may also require you to show security in the form of collateral to secure the loan.