Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

Best Personal Loans for Veterans of February 2024

ADVERTISEMENT

The average personal loan rate is 11.94% as of Feb. 7, according to a Bankrate survey. Personal loan interest rates are trending higher in 2024 so far, up nearly a full percentage point from July 2023:

Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit. Often, borrowers with bad credit will apply for a secured personal loan that uses an asset as collateral in order to achieve lower rates:

Bankrate Averages

Best Personal Loans for Veterans of February 2024

Veterans take out personal loans for a variety of needs, ranging from paying off credit card debt to managing moving expenses and making large purchases.

ADVERTISEMENT

“Personal loans can be helpful as a means to pay down high-interest debt more efficiently,” says Nancy DeRusso, managing director and head of financial wellness at Ayco, a financial counseling company.

A veteran might want to use a personal loan to pay off credit card debt for a few reasons. First, transferring high-interest credit card debt to a lower-interest personal loan can help you pay off your debt faster than making minimum credit card payments, and it can save on interest.

Second, a personal loan may also provide a more structured repayment plan than credit cards. And third, a low-interest personal loan can be a valuable way to make a large purchase without tying up cash or other assets, DeRusso says.

But as useful as personal loans for veterans can be, they are still obligations, warns Richard Delgado Jr. of Boeing Global Engagement, the company’s global philanthropic organization.

“I would really caution veterans about the importance of avoiding the temptation to take out more than they might need in the form of a personal loan,” Delgado says. “They should only take out what they really need in order to avoid going more deeply into debt, which is never a good idea.”

  • Use a loan to pay for almost anything, such as covering an emergency expense, making a home improvement or consolidating debt.
  • Get a predictable monthly payment.
  • Borrow with less-than-perfect credit and no collateral.
  • Diversify your credit mix with a loan, which could help your credit score.

  • You could owe loan fees, such as an application fee and an origination fee, plus late fees and returned payment fees. Read the fine print and ask questions.
  • You will find higher interest rates than on secured loans, such as home equity loans and lines of credit.
  • You must manage the account responsibly to prevent late or missed payments from hurting your credit score. Also, the loan application requires a hard inquiry, which may temporarily lower your score.
  • You should borrow only what you need because a loan is a debt.

Here are some factors to consider as you compare personal loans for veterans:

  • Your budget. “Without a sound financial plan to include a budget, any debt – no matter the cost – can lead to financial problems if not managed well,” says Anne Anderson, Weatherford chair of finance at Middle Tennessee State University and U.S. Army veteran.
  • Discounts. Credit unions or lenders that specialize in working with veterans may offer interest rate discounts or other perks.
  • Annual percentage rates. Look at the top end of the range of APRs. The APR is the annual cost of a loan, including fees, and is typically higher than the interest rate.
  • Repayment terms. A longer term will give you a smaller payment but a higher total borrowing cost because you pay interest over a longer time frame.
  • Added fees. Lenders may charge origination fees, late fees or prepayment penalties.
  • Evaluate customer support. Review customer service resources and ratings to make sure a lender can meet your needs. Check that lenders can deliver funds when you need them if timing is critical.

Ask questions as you consider your options. Do not sign anything that you do not understand.

Find the Personal Loan That’s Right for You

A personal loan is not your only option if you’re a veteran who needs financial assistance. Veterans have these alternatives:

  • Grants. A grant is money that does not have to be repaid. Veterans may be able to qualify for grants from organizations or individuals to cover many types of expenses.
  • Nonprofits. Many nonprofits can provide financial resources for veterans. The National Veterans Foundation helps veterans write and submit benefits claims to the VA, and the Coalition to Salute America’s Heroes may be able to assist with certain expenses, DeRusso says.

Know all of your options before rushing to borrow. “Veterans should make sure they are aware of the various resources and benefits available to them before taking out a personal loan,” DeRusso says. “The VA publishes an annual guide highlighting the federal benefits available.”

U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.

To recap, here are the picks:

Best Personal Loans for Veterans of February 2024

For personal loans, veterans must use the same types of lending institutions as civilian borrowers, DeRusso says. Delgado says credit unions and institutions that serve veterans can be a smart first stop when loan shopping.

“Credit unions often do a lot of work both with active military and with veterans,” he says. “If you’re transitioning from active duty to civilian life, the credit union will be more understanding about your specific circumstances than a traditional lender.”

A military credit union will grasp the ramifications of deployment and reunion and the circumstances that might cause a late payment, Delgado says. USAA and Navy Federal Credit Union, for example, are known for helping active-duty service members and veterans as well as their families.

Veterans might scour the web for VA personal loans, but they won’t find any. That’s because the VA does not issue personal loans for veterans.

Borrowers need a minimum credit score of 700 and $100,000 in annual income to qualify for the lowest annual percentage rate.

Sarah Goldberg
Sarah Goldberg

Sarah is a seasoned financial market expert with a decade of experience. She's known for her analytical skills, attention to detail, and ability to communicate complex financial concepts. She holds a Bachelor's degree in Finance, is a licensed financial advisor, and enjoys reading and traveling in her free time.

Articles: 781