If you are a veteran with bad credit, finding a personal loan can feel impossible. But options do exist.
While there is no official personal loan program just for veterans, some lenders offer more flexible terms for military borrowers and their families. Many credit unions also provide special benefits for veterans, with lower interest rates and fewer fees.
This guide will show you the best personal loan options for veterans with bad credit. You will learn where to apply, what to expect, and how to improve your chances of approval. We will also cover helpful resources beyond personal loans that can support your financial goals.
Best Banks and Credit Unions for Veterans and Their Families
Military-focused credit unions and banks often offer personal loans with lower interest rates and more flexible terms than traditional lenders. Many also waive common fees and provide special programs for veterans and their families. If you qualify for membership, this is often the best place to start when looking for a personal loan with bad credit.
1. USAA
- Loan Amount: $2,500 to $100,000
- APR: 9.49% to 18.51%
- Loan Term: 12 to 84 months
2. Navy Federal Credit Union
- Loan Amount: $250 to $50,000
- APR: 8.99% to 18.00%
- Loan Term: Up to 60 months
3. PenFed
- Loan Amount: $600 to $50,000
- APR: 7.99% to 17.99%
- Loan Term: 12 to 60 months
4. Service Credit Union
- Loan Amount: $500 to $50,000
- APR: Starting around 8.49%
- Loan Term: 12 to 60 months
Best Online Lenders & Loan Marketplaces for Veterans with Bad Credit
If you are having trouble qualifying with a bank or credit union, an online loan marketplace can expand your options. These platforms connect you with a network of lenders that are more willing to work with veterans who have bad credit. You can compare offers quickly and see your potential rates without affecting your credit score.
1. Upgrade
- Loan Amount: $1,000 to $50,000
- APR: 8.49% to 35.99%
- Loan Term: 24 to 84 months
2. CashUSA
- Loan Amount: $500 to $10,000
- APR: 5.99% to 35.99%
- Loan Term: 3 to 72 months
3. BadCreditLoans
- Loan Amount: $500 to $10,000
- APR: 5.99% to 35.99%
- Loan Term: 3 to 60 months
4. PersonalLoans.com
- Loan Amount: $500 to $35,000
- APR: 5.99% to 35.99%
- Loan Term: 3 to 72 months
How Your Credit Score Impacts Personal Loan Approval
Your credit score plays a big role in whether you qualify for a personal loan, especially if you have bad credit. Lenders use your credit score to help predict how likely you are to repay the loan. A lower credit score will often mean fewer loan options and higher interest rates.
Military credit unions and online marketplaces are sometimes more flexible when working with veterans who are rebuilding their credit. However, even these lenders will check your credit score to determine the loan amount, rate, and terms you can receive.
What factors affect your credit score?
Several key factors influence your credit score. Improving these areas can help you qualify for better personal loan options over time.
- Payment history: This is the most important factor. Paying bills on time helps build a positive credit history.
- Credit utilization: This measures how much of your available credit you are using. Keeping balances low on credit cards can help improve this score.
- Length of credit history: Lenders prefer borrowers who have shown responsible use of credit over many years.
- Credit mix: Having different types of credit, such as credit cards, mortgages, and personal loans, can boost your score.
- New credit: Too many recent loan or credit card applications can temporarily lower your score.
How to Prepare for Your Personal Loan Application
A little preparation can improve your chances of getting approved and securing better loan terms.
Start by checking your credit score and reviewing your credit report for errors. If you find mistakes, dispute them right away.
Next, gather key documents. Lenders will usually ask for:
- Government-issued ID
- Proof of income (pay stubs, retirement income, or VA benefits)
- Proof of address (utility bill or lease)
- Bank account information
Finally, decide how much you need to borrow and make sure you can handle the monthly payments.
Consider Applying With a Cosigner
If your credit score is preventing you from qualifying for affordable loan terms, applying with a cosigner may help. A cosigner with stronger credit can help you secure a lower interest rate and increase your chances of approval.
Keep in mind that your cosigner is equally responsible for the loan. If you miss payments, it can harm both your credit score and theirs.
How to Compare Personal Loan Offers for Veterans With Bad Credit
Not all personal loans offer the same terms or costs. Use these tips to find the best personal loan for your situation:
- Compare rates: The interest rate has a big impact on how much you will repay. Always check the full APR, not just the advertised rate.
- Prequalify: Many lenders allow you to check your potential rate with a soft credit check. This helps you compare offers without affecting your credit score.
- Check for fees: Look closely for origination fees, prepayment penalties, or other hidden charges. The best personal loans are transparent about all fees.
- Evaluate customer support: If problems come up, strong customer support can make a big difference. Look at reviews and support options before choosing a lender.
Alternatives to Personal Loans for Veterans With Bad Credit
A personal loan is not the right solution for everyone. Veterans with bad credit should also consider these alternatives:
- Grants and emergency financial assistance: Programs such as the Unmet Needs Program and the American Legion’s Temporary Financial Assistance provide direct support.
- Credit counseling: A nonprofit credit counselor can help you manage debt and create a plan to improve your credit score.
- Debt management plans: If you have significant credit card debt, a structured repayment plan through a credit counseling agency may be a better option than taking out a new loan.
- VA benefits and resources: The U.S. Department of Veterans Affairs offers many support programs that can help with financial challenges without adding new debt.
Best Resources for Veterans and Active-Duty Military
Veterans and active-duty military members can tap into a wide range of resources beyond personal loans:
- VA benefits: The U.S. Department of Veterans Affairs provides disability benefits, housing assistance, and education programs.
- Grants: Programs like the Unmet Needs Program and Veteran Entrepreneur Portal help veterans manage financial challenges or start businesses.
- Job training: Initiatives such as Blue Star Families and Hiring Our Heroes provide training and job placement support.
- Additional financial resources: Organizations like the PenFed Foundation, the Wounded Warrior Project, and Veterans Families United offer emergency aid, financial education, and advocacy.
Bottom Line
There is no official personal loan program through the U.S. Department of Veterans Affairs. However, many military credit unions and banks offer excellent personal loans to veterans with bad credit. Online loan marketplaces can also provide options when traditional lenders say no.
Before applying, compare loan offers carefully. Prioritize lenders that offer lower interest rates, no hidden fees, and fair terms. With the right choice, you can get the funding you need and take another step toward improving your financial future.
Frequently Asked Questions
Does the VA offer personal loans?
No, the U.S. Department of Veterans Affairs does not offer personal loans. VA loans are designed specifically to help veterans, military service members, and their families buy or upgrade a home. They cannot be used to cover personal expenses or unsecured debt.
If you need a personal loan, you will need to apply through a military-friendly credit union, bank, or an online lender that works with veterans and bad credit borrowers.
What credit score do I need to get a personal loan as a veteran?
The required credit score depends on the lender. Many military credit unions do not publish a minimum credit score requirement, but having a credit score of at least 580 to 600 will improve your chances of approval.
If your credit score is lower, online marketplaces and lenders that specialize in bad credit personal loans may still offer options. Keep in mind that lower scores typically result in higher interest rates, so compare offers carefully.
Can an active-duty military member get a loan?
Yes, active-duty military members can qualify for personal loans. Many military credit unions and banks offer personal loans to both active-duty members and veterans. Some lenders even offer special rates and benefits for active-duty borrowers.
Before applying, check the membership requirements of the credit union or bank you are considering. In many cases, being an active-duty service member will make you eligible to join and apply for a loan.
How fast can I get a personal loan as a veteran with bad credit?
Funding times vary by lender. Many online lenders and marketplaces can deposit funds within one to two business days after approval. Military credit unions may also offer fast funding, though the process can take a little longer if additional documents are required.
To speed up the process, make sure you have all required documents ready when you apply. Using a lender that offers prequalification can also help you find fast funding options.
Are personal loans from military credit unions better than online lenders?
For many veterans, military credit unions offer the best personal loan terms. They typically provide lower interest rates, fewer fees, and more flexible repayment options than online lenders. However, not all borrowers will qualify, especially if they have bad credit.
If you cannot qualify through a credit union, an online lender or marketplace can offer an alternative. Just be sure to compare rates, fees, and terms carefully before choosing a loan.
