Sublime4003

Hey I was thinkin of joining the military (haven't decided which branch yet) but I had a quick question. How easy is it to get a loan for a car. I have one credit card I have only had for about a month, so I haven't established hardly any credit yet. I heard you can get loans fairly easy while in since they know you'll have a steady income for 4 years but I wanted to make sure. I'm wanting to buy an 01-02 F-Body and I'll prolly spend around $15k or so. But anyway, thanks in advance and be safe!

ATCFLYBOY02

iTrader: (7)

Officer or enlisted?

Sublime4003

Enlisted...

NightWindDriftr

iTrader: (4)

Loans that are heavily weighted on your military employment are usually dangerous. It's fine to use military employment as a demonstration of pay stability, but make sure you get that loan from a bank or credit union that you trust. Many credit companies will be happy to extend you a loan based on your employment, but they do so eagerly in hopes of taking advantage of the financially-uninformed. Most junior enlisted have had two years of college or less - this demographic is vulnerable to poor financial skills.

I know that the military branch of Bank of America will extend a loan to the newly-enlisted after six months of service. They offer relatively low rates to the military and use your military employment as a basis for approving your loan. Right after the six-month mark, I applied for a loan and was approved for $12,000 at 4.5% (10% down). The $12,000 seemed to be their maximum at the time, and the interest rate was so low because of the Fed rate at the time (2004). I applied for a loan again and got the same $12k cap but at 9.75% (10% down) instead. My credit only got better in two years, but rates have changed significantly in that time period. Therefore, you can reasonably expect a loan for more than $10k but LESS than $15k for a car less than seven years old - that should be within parameters for a newer F-body. If you need more than $12k, you should have no trouble saving $3 grand.

It's been my experience that USAA's rates are even lower than Bank of America's. I got that loan from B of A and refinanced it a few months later with USAA (9.75% to 7.18%). The rate USAA gave me is lower than their current loan rates for purchasing a used car! I have a short credit history, but it's clean and robust for my age. I'm almost 21 and have had 4 major credit cards (high usage but zero'd out weekly) and 2 unsecured, paid-off loans.

With all that considered, YES, it's easier to get approved for a loan as a military member. HOWEVER, unless you're careful, you'll end up in a high-APR, lengthy term trap. THEREFORE, it's in your best interest to build on your "credit resume" before you apply for a loan. I'd give it at least six months.

Richiec77

iTrader: (3)

Ditto. Be very careful of the sharks out there that prey on the military. It's a VERY VERY sad trend that you will see when you get to your 1st duty assignment.

I agree alot with what was said above. Try and get hooked-up with a Credit Union. They are the best for loans since they can establish their own interest rate.

Just be very careful and make good choices. You'll have buddies that will go out and get a nice brand new car, but they could be paying as high as 24% interest on that loan. It's all to common, so much so that you usually have to go thru some kind of finnacial briefing when you get to your 1st duty station to warn you about the situation.

masonvonritchie

Navy Federal Credit Union has the best rates I've seen and they always approve people. Non-military banks will usually try to **** you. I can't tell you how many financial responsibility briefs I've been to. It's nuts how people prey off of military folks.

gonefishn1212

all i can say is buy the car B4 you join.... that way if you get a high intrest rate, you can, after you join the military get the "soldiers & saliors relief act".... what that does is lowers all your intrest rates to a CAP of 6% . so if you were paying 15%, youd now only be paying 6% or even lower. 6% is just the max....
*****this only works on loans that were accrued BEFOR you joined the military****** (soldiers & saliors relief act works on all loans even credit cards)

gonefishn1212

if you go with a bank for savings and checking go with USAA every thing is free and there are no FEEs they offer free checks for life, free WEB BILL PAY, pay 3.5% on your savings, also .15% on checking its a great bank, and ive had them for just over a month, www.usaa.com check them out

NightWindDriftr

iTrader: (4)

99.999% true. USAA does have fees, but their fee schedule won't rape you as hard as other banks. They also have a decent amount of lenience. Everything else said in this post is true about USAA. As a note, the checking account will only bear interest if your balance is more than $1,000. The 3.5% on the savings account is only effective once your balance is $1,000 or more, otherwise the rate is 2.7%.

There's free overdraft protection, so it makes sense to put most of your money in the savings account and reap the higher interest rate. If you ever forget to move it back to your checking, the OD protection will cover you.

Fratsit

iTrader: (1)

The response below is the single BEST feedback yet. I have had to go toe to toe with more dealerships than I care to think AFTER one of my sailors have purchased a vehicle and got a "not so nice" interest rate.

I agree with USAA. You can't go wrong with them and you can trust them. I financed my '99 Z28 at 5.2%. I have a checking account, money market fund, and high interest savings account with them and am totally satisfied.

It is very easy for you to get a loan on a car based upon your military employment, however, there are entirely TOO MANY "predatory lenders" out there and you absolutely must do your homework. My suggestion would be to see what you can pre-quality for at your financial institution (USAA hint... hint) find your car and treat it like you are a cash buyer. Also, get your credit reports and scores (myfico.com for score and reports and annualcreditreport.com for your FREE credit reports from all three reporting agencies). That way you will have an idea of the interest rates you can qualify for based on your scores. You should not always expect to get the best rates even if you have a score that will support it. Some dealerships will still try and hose you, especially if they see that you have not done your homework and are "emotionally attached" to the car.

Well said, NightWindDriftr

R/

Frat

99z28monster

iTrader: (3)

go with usaa they will bend over backwards for you, You dont get better rates really for being in the military. It is based of credit not your job, at most you will get scammed while buying in the military, buy away from post all the spots close by are lemon lots.