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 emerging from basic military training, mostly in their late teens or early 20s, have just gone through the toughest time in their lives. Of course, the training will depend on the branch of the military that the recruits have chosen. But nevertheless, all of them involve really difficult training programs. Usually, the training takes 8 to 13 weeks to complete. For the recruits, it usually feels like decades. But after that, they are transformed into America’s special fighting forces. Before it ends, they proceed to tech schools that will give them weeks or months of specialized training for the specific task that they will perform while on active duty.
This is the training that will give them a decent income while on active duty. For single individuals, their military income serves as a huge disposable income because they hardly spend anything while they are deployed. However, once they start a family and are forced to provide for them back home, that is when the problem starts. The income becomes insufficient. If they failed to learn and experience how to budget their money, the situation can easily get out of hand. The allure of taking on debt becomes very appealing.
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. And we all know that it leads to several consequences. Good deals and attractive credit card interest rates are not the only causes of service members’ debt problems, according to the website Military.com. The inability of spouses to find employment after transferring to a new duty station is one. Another is the loss of spousal income due to domestic responsibilities is also another. These are more affect military families and oftentimes lead them to financial troubles.
Income loss, increasing cost, and mounting debt make a tough combination for several 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 cannot get security clearance unless they stay out of serious financial trouble. This clearance is 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 your debt to impede your ability to serve. Neither do you want it to hinder you from a higher pay grade. This is 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. However, military personnel can gain particular benefits by joining a debt relief program designed specifically for them. This is according to Military.com. 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. These are typically available to both active duty and retired military personnel. It is also available to certain civilian categories of Department of Defense employees.
Benefits of Military debt consolidation loans
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. This is 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. This is true 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. There are a couple of questions to ask debt consolidation or credit counseling companies. The first question is whether or not they have programs for military personnel and/or veterans. The next question is how they vary from typical debt relief programs.