Military Debt Consolidation Loans

Military Debt Consolidation Loans for Active and Retired Service members


  • Learn how debt can be dangerous to servicemember and civilians.
  • Discover the benefits of military debt consolidation loans and debt relief programs.

Those in their late teens or early 20s emerging from basic military training have survived the toughest thing many of them have ever had to do in their lives. Depending on the military branch, basic training of eight weeks for some and 13 weeks for others likely seemed like decades for the raw recruits who were transformed into solid members of America’s fighting forces. At the finish awaits a recruit’s chosen tech school, with its weeks and maybe months of specialized training for the job they will be asked to perform when they report to their first duty station.

It’s a job that will bring a decent income in a military that keeps life’s expenses lower and creates a good amount of disposable income for young people who often don’t have experience in how to budget their money. Temptations abound, like good deals and finance rates available to military personnel, which can put a young adult deep into debt in less time than the basic training they just endured.

Those with debt experience know it does not take long for early debt to snowball into a large, long-term debt with consequences. Good deals and attractive credit card interest rates are not the only causes of service members’ debt problems, according to the website Inability of spouses to find employment after members transfer to new duty stations and loss of spousal income due to domestic responsibilities that keep them from the work force are but a couple issues affecting military families.

Income loss, costs increasing, and mounting debt make a tough combination for many military personnel.  The answer for many, when they find themselves in this situation, may be a debt consolidation loan.

The Cost of Debt in the Military

It’s well documented that military personnel faced with heavy debt are security risks.  The most cited example, perhaps, is the case of John Anthony Walker Jr., a 47-year-old retired Navy chief warrant officer who in 1985 was arrested and later convicted of espionage for spying and providing top-secret information to the Soviet KGB. His reasoning for becoming a spy was motivated by the payments he received for the information that he needed to lessen huge financial debts.

Those in such situations are a security threat in the military’s eyes, according to a 2009 report by PBS’ Frontline, and it is why the Department of Defense has implemented policies and training to help ensure that military members budget responsibly and remain debt-free.

Sailors, airmen, soldiers, and marines unable to stay out of serious financial trouble find they are unable to get the security clearance needed for deployment or certain missions. This costs them pay increases and forces the military to put a perhaps less-qualified person in their place, according to the Frontline report. In 2008, according to the report, the Navy reported that financial issues accounted for roughly 80% of security clearance revocations and denials – about 1,500 sailors out of 330,000 active-duty navy personnel. Capt. Mark Patton, chief of staff for the Navy Installations Command, told Frontline that security clearance revocations seriously impact a unit’s mission readiness.

Military Debt Consolidation Loans Can Help Restore Financial Stability

As a member of the military, you do not want debt to impede your ability to serve or make a higher pay grade – certainly a counter-productive situation if you are deep in debt. Low-interest loans offered to military members on everything from cars to mortgages, special service member rates on credit cards and attractive finance rates for big screen TVs and other electronics at the base exchange store, however, may have put you in just that situation.

Military debt consolidation loans may be the best plan of attack to begin to regain financial and military status. Many debt relief and consolidation programs exist, but military personnel can gain particular benefits by joining a debt relief program designed specifically for them, according to These programs may include free financial counseling, lower interest rates on the loan, and lower late payment charges.

Programs specifically tailored to military personnel are offered by several financial service firms and debt consolidation companies, and are typically available to both active duty and retired military personnel, as well as certain other civilian categories of Department of Defense employees.

While most debt consolidation loans require either collateral or an acceptable credit score, military-specific programs are more lenient. Some providers use a special credit scoring model that applies to military personnel only, in recognition of the special challenges faced by active military personnel. This special scoring model will often make it easier to qualify for a debt consolidation loan, even when the military applicant is credit-challenged.

Typically, no collateral is required, and approval rate is very high. While programs vary, the best ones will offer fixed rates, which make for easier planning. The first question to ask any debt consolidation or credit counseling company you contact is whether or not they have programs for military personnel and/or veterans and how they vary from typical debt relief programs.