Wed. Jun 7th, 2023

Financial Assistance For Active Duty Military

No matter if you are a veteran or active-duty service member, there are resources available to you that can assist with financial difficulties. Such programs may offer loans, grants or other forms of aid.

Some of these financial resources are free for service members and military families; others charge minimal fees; some even offer one-on-one financial counseling via telephone or video chat.

Student Loans

Active duty military members and their families can take advantage of various types of financial support available to them to cover the costs of higher education, including loans from government, private companies and non-profit organizations; scholarships/grants from many universities for military students/families may also provide assistance.

Before selecting a loan lender, make sure they offer adequate customer support options to address your inquiries and obtain quotes from multiple lenders to find the most cost-effective deal.

Armed forces personnel face unique financial challenges that require special consideration by lenders; lenders who understand this situation tend to offer more accommodating loan products.

Credit providers take into account both your financial history and score when considering military loans, given how a military career often means frequent moves and no previous credit history; both factors which could cause your score to appear worse than it really is.

As an active duty member of the Armed Forces, your federal student loan interest rate may be lowered from eight percent to six percent while on active duty. Simply request this in writing with proof from your loan servicer that they can verify you as serving, along with copies of orders calling into active duty.

Another perk of active duty service is that payments may be deferred while on active duty and up to 180 days post-deployment – available with both federal and private loans; please check with your lender to determine whether this applies.

Additionally, if you enlist for at least six years as a Soldier or National Guardsman and have outstanding student loans, the Army will repay up to $50,000 towards them through an incentive program designed specifically for certain MOSs (Military Occupational Specialties). Eligible recruits can take advantage of this benefit.

The government provides many other advantages to active duty military members and their families, such as reducing interest rates on some student loans during and after active duty service and forgiving certain federal student loans. If your family size and income don’t significantly change due to military service, an income-driven repayment plan might also help maintain old payment amounts if desired; but be sure to weigh all potential advantages and disadvantages of enrolling before making this choice.

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Short-Term Loans

Military members in need can find financial support through short-term loans, student loan forgiveness programs and free credit counseling.

Some lenders also provide reduced interest rates or joint personal loans at significantly discounted rates for active duty service members who meet SCRA criteria, such as Lending Club who offers an interest rate of just 6% for such active service members.

Income-driven repayment can also help lower monthly payments by choosing to base them on your current income and family size. This option could be particularly useful if you’re having trouble making ends meet, need to cut payments, but first weigh all possible benefits/drawbacks of this approach before deciding.

If you have been deployed overseas or become permanently disabled, military loan discharge may provide the opportunity to erase debt if you’re no longer working and able to repay it, according to the Department of Defense.

Fill out and submit a special DD 214 discharge form along with an explanatory letter for consideration of this program. As amounts forgiven may differ based on each loan servicer, be sure to consult them first before applying.

While these options can provide active duty military members with some financial relief, they should only be used as a last resort and always ensure any loans you obtain comply with MLA guidelines.

The federal Military Lending Act offers specific safeguards to both military members and their families when borrowing loans, such as limits on interest and fees as well as reasonable safeguards when loans are made to them. Thus, lenders should be sensitive to military needs when offering structured traditional installment loans with fixed terms and equal payment schedules to this community.

SoFi and Rocket Loans SM offer same-day funding to service members eligible under the SCRA, as well as unemployment protection should they experience job loss or other hardship. In such instances, these companies will often modify your monthly payments in order to help find employment faster.

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Credit Counseling

Credit counseling programs for active duty military members can be found through various organizations and agencies. These programs provide free financial assistance that can assist a service member in building good credit; additionally they can assist those suffering losses due to military service as well as any debt issues.

Credit counselors for members of the military offer many services, from counseling and education workshops, classes, to helping develop a budget with goals and strategies for handling money effectively. They can assist members of all branches with creating an actionable financial plan with budgeting goals and strategies to manage finances effectively.

An excellent credit score makes life easier, from purchasing a home and financing car loans, to paying tuition costs or starting businesses. A solid score can even protect military members against identity theft and other serious credit issues.

Under the Fair Credit Reporting Act, service members can place an “active duty alert” on their credit reports in order to reduce identity theft while deployed or away for at least a year. Such an alert requires creditors to take extra measures in verifying service members before offering new lines of credit.

To place an active duty alert on your credit report, contact one of three national credit reporting companies. That company will ask for proof of identity – such as Social Security number – before sending your information on to two additional companies which will then place alerts on all three files at once.

Once an active duty alert has been added to your credit report, it will remain there for 12 months unless requested to be removed sooner. It also removes you from all marketing lists used by consumer reporting companies for prescreened offers of credit and insurance for two years (unless it was placed back before).

Military life can be challenging, and service members and their families often experience financial strain due to long deployments away from their homes.

Free Resources

Active duty military members have access to various financial assistance programs, from student loans and debt relief solutions, to programs focused on homeownership assistance or managing credit and consolidating debts.

Active duty military members must prioritize taking care in their finances to remain financially stable while deployed or moving frequently. A steady source of income can provide great comfort during these periods of uncertainty and transition.

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An increased credit score can also aid service members in receiving security clearances necessary for employment opportunities that require them. Poor credit could preclude them from receiving these jobs.

Credit repair assistance can be obtained for free from many agencies, including the three major reporting bureaus and non-profit credit counseling agencies. When seeking help it’s always best to approach non-profit agencies for assistance.

Sen$e app from the Department of Defense offers personal finance education to military personnel. The site covers topics like budgeting, saving and credit card use.

This website also contains information on the latest financial technology that may benefit military families, such as mobile banking and credit card tracking. In addition, there is information on protecting yourself against identity theft as well as money-saving tips for deployments.

As well as these free resources, there are a range of government and nonprofit programs which offer support to military families. Some provide cash grants for emergencies or unexpected costs.

As part of its new law mandating financial literacy training for all service members, including protecting personal data and using credit responsibly, the Department of Defense teamed up with National Financial Educators Council to deliver a financial literacy program across each branch of armed forces. This initiative ensures all service members possess a basic knowledge of finances.

The National Foundation for Credit Counseling provides a list of free resources for credit education, including nonprofit credit counseling agencies and online tutorials. Some programs even offer one-on-one credit counseling free to qualified applicants.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.