Are there special loans for veterans?

A VA loan is a mortgage guaranteed by the United States Department of Veteran Affairs, and the primary purpose of offering these loans is to help veterans/eligible candidates obtain financing for housing.

For 2016, eligible candidates can avail VA loans of up to $417,000 throughout the US, except some states. ... read full answer

Military.com resources​.

You can't get a VA loan with a 600 credit score. While the VA loan program has very relaxed credit requirements, VA lenders typically require a minimum credit score of about 650.

The VA loan program is aimed at helping military buyers get an accessible mortgage. However, the Department of Veterans Affairs does not issue loans. The agency only oversees the program and guarantees a portion of each loan. Individual VA lenders handle the actual process, and they require credit score minimums, which vary from one institution to another.... read full answer

The best military debt consolidation loans are offered by USAA, Navy Federal Credit Union, and Pentagon Federal Credit Union. These personal loans help active duty military and veterans consolidate and then repay their debt over extended timeframes with reduced interest. If the debt holder has a home loan through the ... read full answerDepartment of Veterans Affairs, he or she can take advantage of the official “Military Debt Consolidation Loans,” also known as MDCL, too.

Let’s take a look at both options available to active duty military and veterans.

Military Debt Consolidation – Personal Loan Options

• USAA: Borrow $2,500 to $5,000 over 12 to 48 months, with no origination fee. APRs range from 7.24% to 17.65%.
• Navy Federal Credit Union: Borrow $250 to $50,000 for up to 60 months, with no origination fee. APRs range from 7.49% to 18%.
• Pentagon Federal Credit Union: Borrow $600 to $20,000 over 36 to 60 months, with no origination fee. APRs range from 6.49% to 17.99%.

Several military-backed banks and credit unions offer personal loans to service members and veterans at competitive rates. These loans are best for individuals who want to consolidate their debt without borrowing against the equity in their home. A few of the top offers are listed above.

If you’re planning on taking out a loan as an active-duty servicemember, you should read up on the Servicemembers Civil Relief Act and the Military Lending Act. These laws regulate what interest rates you can be charged and prevent predatory lending practices.

Military Debt Consolidation – VA Home Loan

The MDCL is a cash-out refinance on an existing mortgage backed by the VA. In other words, it’s a new mortgage that’s bigger than the balance on the original mortgage, but the borrower receives the difference between the two mortgage amounts in cash. The amount of cash available depends on the equity in the home – or the difference in the value of the house and the balance on the mortgage.

Here’s an example. Let’s say a veteran has a VA home loan with a remaining balance of $150,000, but the house is worth $200,000. With a military debt consolidation loan, you can borrow up to 100% of the equity in your home. So in theory, the veteran in question could get a new mortgage for $200,000 through the VA, receive $50,000 in cash, and use that cash to pay off their existing debts, consolidating them into the mortgage. And the APR on the mortgage is likely to be around 3% to 4%, much lower than the rates charged by most credit cards or personal loans.

This type of loan is best for individuals who owe less on their home than its fair market value. Homeowners who pursue this loan can avoid taking out another line of credit.

Other Options to Consider

There are a few other tools that active duty military and veterans can use when considering debt consolidation.

Military OneSource is a program funded by the Department of Defense that provides education resources and advice to service members and their families on a variety of topics, including debt solutions such as debt consolidation.

Debt Reduction Services, a nonprofit credit counseling agency, offers free credit and debt counseling to active duty military. You can start the process of debt consolidation through this company by speaking with one of their credit counselors.

You can also take advantage of the Financial Education Program offered through the Military Family Advisory Network to learn about personal finance at your own pace. Similarly, it’s worthwhile to look at resources offered by major banks, credit unions, and consolidation programs since a lot of them offer extra discounts and assistance for military personnel.