Managing debts is not always easy. It can be challenging for some, including for disabled veterans. It can be harder for them if they have to deal with limited income, medical expenses, and some other financial issues.
When talking about disabled veterans and debts, you may think of debt consolidation loans. While it is true that they can be a good solution because they are proven to simplify monthly payments, lower financial rates, and reduce financial stress, it is not easy to find the right debt consolidation loan for disabled veterans who have unique needs. It should be considered carefully. If you are a disabled veteran who is looking for the best debt consolidation loan, check out the following guide.
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Definition of Debt Consolidation
Debt consolidation is described by Cambridge Dictionary as a method used for managing debt, in which you take out a single new loan and use it to pay back several of your other debts. According to Collins Dictionary, it is the process of taking out a new loan (often secured on one’s property) in order to pay off a number of existing debts.
Basically, a debt consolidation is an action of taking out a single loan in order to pay off the other debts, such as personal loans, medical bills, and credit card balances. By combining more than one payment into one monthly bill, you will be able to simplify your financial situation. Besides, it is also possible for you to save money over time and repay your debt faster if the interest rate of the new loan is lower.
Reasons Why Debt Consolidation is Good for Disabled Veterans
In case you are wondering why debt consolidation is good for disabled veterans, it is because of the followings:
- There is a chance for you and other disabled veterans to qualify for lower interest rates, especially if you have access to VA-specific financial products.
- Taking a debt consolidation allows you to only manage a single monthly payment instead of more than one, reducing the stress and help in budgeting.
- Your credit ratio can be improved overtime if you are able to make a consistent payment.
Best Debt Consolidation Loans for Disabled Veterans
There are a lot of debt consolidation loans for disabled veterans. The best ones include:
1. Navy Federal Credit Union Personal Loan
Navy Federal Credit Union Unit, which is also known as NFCU in short, offers competitive personal loans. These loans can be used for debt consolidation. Compared to traditional banks, the interest rates provided by this one is usually lower for those who are qualified, as low as 7.49%. Besides, it also offers more flexible terms.
For anyone who wants to apply for a Navy Federal credit Union personal loan, first of all, you should be a member of a Navy Federal Credit Union. It is only possible if you are an active military member or a veteran of Navy Federal, an employee or retired of the Department of Defense, or the family member of any of these groups. Then, you can submit your information and apply by phone, online, or in person. After that, review the offer and sign off on your loan after you agree with everything. Just like that you will receive funds which are usually on the same day you are approved for a personal loan.
2. USAA Personal Loan
USAA personal loan offers unsecured loans or loans that do not require collateral such as a car or house to receive. These unsecured loans can be used for many different purposes, including debt consolidation loans. In addition to the active military members and their families, those who are veterans and their family members are also eligible for this type of loan. USAA personal loan is best because the borrowers will not have to pay for a few things such as application fees, origination fees, and prepayment penalties.
3. PenFed Credit Union Personal Loan
PenFed Credit Union personal loan also makes it to the list of the best debt consolidation loans for disabled veterans. This one is best for those who have excellent credit because it offers minimum interest rates on its personal loans. If you are someone who wants to take out an unsecured loan from a credit unit with low minimum APRs and a wide range of loan amounts, then this one is recommended for you. In contrast, you are not recommended to take it if you are worried about falling behind on your payments.
If you are qualified for a PenFed Credit Union personal loan and want to apply for it, the first thing that you should do is to fill out personal information on the official website of PenFed, including your name, Social Security number, and income record. When submitting a formal application, it may also be needed for you to send in proof of income. In the next step, sign a loan agreement and after that you will get your money. After getting the money, now make a plan to pay off your loan.
4. Veterans United Home Loans – VA Cash-Out Refinance
According to the Department of Veterans Affairs, Veteran United is the largest originator of VA loans in the United States. It was formed in 2002 and has a dozen of experience with VA loan borrowers. This one specializes in helping military members and their family members. One of the things that make this one good is because it offers a VA Cash-Out Refinance option, allowing veterans to use their home equity to consolidate debt. If you have significant equity in your home and want to secure a lower interest rate, this type of loan can be beneficial for you.
Things to Consider When Choosing a Debt Consolidation Loan for Disabled Veterans
There are several factors to consider when choosing a debt consolidation loan for disabled veterans, as follows:
- Interest rates: You are suggested to find loans that have the lowest possible interest rates so that you can minimize the overall cost of your debt.
- Fees: It is better for you to avoid loans that have high origination fees, prepayment penalties, or other hidden charges.
- Loan terms: It is important for you to think about the length of the loan term. Keep in mind that shorter terms mean the payments that you will have to pay every month is higher. However, it also means the interest that you will pay is less than if you choose long terms.
- Credit score requirements: If you have higher credit scores, it is possible for you to get best rates. Go check your credit score if you are qualified for the best rates.
- Veteran-specific benefits: There are a number of special rates or benefits for veterans offered by many credit unions and lenders. Do not forget to ask about any available discounts to save some money.
Bottom Line
In conclusion, the burdens of the disabled veterans can be lesser with debt consolidation loans that offer a way to manage debt and to minimize financial issues. If you are a disabled veteran who is looking for a debt consolidation loan, it is important for you to learn about your options first. In order to make a good decision, you are suggested to consult with a financial advisor or a veteran’s financial counselor.
