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Military Debt Consolidation Loans

Military Debt Consolidation Loans
Betsalel Cohen
UpdatedDec 6, 2022
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    2 min read
Key Takeaways:
  • There is a VA cash-out mortgage for military who own a home and have enough equity.
  • It is possible to take a personal debt consolidation loan, although there aren't any special VA personal loans.
  • If you are in a hardship, then consider other debt consolidation programs.

Considering a Military Debt Consolidation Loan?

Are you struggling with debt? Did you run up credit card debt, medical bills, or other personal debt? Or, maybe you are suffering from a loss of income?

If you are a veteran or active military personnel, then you might be considering a debt consolidation loan. If you are a homeowner, then you can consider a special military debt consolidation loan, a VA cash-out refinance mortgage.

If you don't own a home or are looking for a different alternative, then consider taking a personal debt consolidation loan.

If you are struggling with a financial hardship, then consider looking for other debt relief solutions.

Personal Debt Consolidation Loans for Military and Veterans

Is there a special personal debt consolidation loan for military personnel and veterans? While it is possible that you have seen banks or lenders advertise such a product, the government does not have any special program for personal debt consolidation loans.

A personal debt consolidation loan allows you to pay off current debt and bills using one loan. You benefit from a simpler payment schedule, lower interest rates, and affordable payments that allow you to get debt free.

Although there is no special VA backed personal loan, there are many lenders that offer debt consolidation loans, including banks, credit unions, and online lenders.

Personal Loan Offers

If you are in the military, or a veteran, then check out the following Rate Table for a personalized offer.

VA Debt Consolidation Cash-Out Mortgage

If you currently have a home and are eligible for a Veteran Administration (VA) loan, then you can possibly refinance into a cash-out VA Loan. According to the VA site,

"VA's Cash-Out Refinance Loan is for homeowners who want to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements. The Cash-Out Refinance Loan can also be used to refinance a non-VA loan into a VA loan. VA will guaranty loans up to 100% of the value of your home. The VA loan is especially attractive because the program has no loan to value restrictions. Also, the credit requirements are generally lower than conventional loans.

Qualification requirements and rates vary between lenders, so If you are considering a VA debt consolidation mortgage, then shop around.

Other Debt Consolidation Alternatives for Military - Financial Assistance for Service Members & Their Families

In some cases, a debt consolidation loan is not what a service member or veteran needs.

If you need financial assistance for an unexpected medical bill, for example, or other urgent need, consider contacting your service's financial assistance organization. The American Red Cross also offers financial assistance to service members. Click here for more details about debt consolidation hardship programs for military personnel.

Not sure what is your best debt consolidation program? Check out Bills.com Debt Navigator tool.

Dealing with debt

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Auto loan debt was $1.50 trillion and credit card was $0.89 trillion.

According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Virginia, 16% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 4%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.

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