So it’s time to buy the vehicle you’re interested in – but what kind of loan should you get to pay for it? Any quick search on the Internet literally raises hundreds of companies offering loans, and some also offer “military car loans”. What are these military auto loans and what benefits do they offer? Continue reading.
The main difference between a military car loan and a regular car loan is simple: the military car loan is only for those who are currently on active service or who are retired from the military (20 years of service or more ). But what sets them apart from the usual auto credit?
Low interest rates – Military auto loans generally have lower interest rates than other types of loans. Here is a quick example of the power of interest rates: if you take out a loan of $ 15,000 to repay within four years at a rate of 10%, you will end up paying $ 380.44 a month, a total of 18 261.12 USD in the end. . If you have the same loan with a 7% interest rate, you will end up paying 356.19 euros per month, for a total of 17 241.12 euros. A few percentage points equals a few hundred euros a year, which can make all the difference when you try to balance your budget.
Low down payment – Military car loans can offer a lower down payment than regular loans, which means you have to pay less money in advance. This can be useful if you have not saved much to buy your vehicle.
Easier approval – If your credit rating is below average or if your credit history is limited, you may find it easier to get a military car loan approval for a car loan ordinary. In most cases, you can apply for a loan and get an online approval.
Longer payment terms – Military car loans are also known to have relatively long payback periods, which means your monthly payments will be lower.
Additional discounts and rebates – Some credit companies also offer discounts and rebates if your auto loan is used to purchase a new vehicle.
Having noted all the benefits of military auto loans, beware: these loans may not be suitable for you if you belong to one of the following categories:
If you have enough money or almost enough to buy a car – If you can pay the full amount of your vehicle without being in financial difficulty, the amount you will save using only the interest rates (7,000 € to € 8,000 from the example above) is worth it. And if you have almost enough but not quite, it’s worth crushing and saving a few more months. Put yourself on a budget plan and contribute every month more money to your “car fund”.
Loan Risks – They may call it military auto loans, but these loans are offered by private financial institutions. You are therefore subject to the same rules and the same penalties as a civilian contracting a loan. In addition to this, a car loan, unlike an unsecured debt, can not be written off by a bankruptcy declaration. In the event of loan default, your credit rating and ability to borrow will be severely damaged.
Tips for getting a military car loan:
1. Know which vehicle you want to buy before applying for a loan. This will also help you determine exactly how much loan you want.
2. Do comparative shopping – do not ask for a loan from the first institution you meet. Check a few places and see if they offer favorable conditions for your specific situation.
3. Get your proof of eligibility in order – make sure you have your military ID and proof of service at hand. You will also need your social security number and your permanent address.
4. Your contact details – The institution from which you take out the loan will want to keep in touch with you wherever you are, so make sure you have multiple addresses where you can be contacted (for example, your family house, your base).
5. Your credit report – Get a credit report that you can give to the lending institution. Some lenders can do this for you, but you can also get a free credit report at freecreditreport.com.
6. Signing – If you are abroad or can not sign your loan in person, be sure to give someone a power of attorney to sign on your behalf, along with a copy of your license. drive. Some states may also require notarization.mployed | Budget Loans: Apply – GOV.UK |