For persons serving in the armed forces, banks, financial institutions, and private moneylenders offer special types of loans.  These loans are commonly referred as military loans.

Features of military loans
·         There are many different types of loans.  The soldier should check out the individual features of each loan, and then conclude regarding the loan that best fits his or her requirements.

·         These loans are given only to persons actively serving in the armed forces.  Ex-military personnel with more than 20 years of service may also be eligible for these loans.

·         These loans carry low interest rates, zero processing fees, hundred percent financing, and do not charge any annual fees.

·         These loans can be repaid in easy installments that include the interest, and some portion of the principal.  Thus, the entire loan is repaid without much difficulty.

·         Loans can be taken on a short-term or on a long-term basis.  For both the terms, the rate of interest is low compared to the loans given to civilians.

Before taking the military loan
·         The soldier should be fully aware of the reason of taking the loan.  The reason has to be credible and valid.

·         The soldier should have a plan as to how the loan will be repaid.  The loan should be taken of such an amount, which can be conveniently repaid from his or her salary and that fits in the monthly budget.

·         The soldier should be fully aware of the consequences of failure in repaying the loan.  Skipping installments or inability to repay the loan, may attract penalties, legal action, and in extreme cases, may even lead to dismissal from the armed forces.

·         Not taking a loan is best.  Nevertheless, if a loan has to be taken, then the soldier should do some research and find out the best loan that suits his or her requirements, budget, and repayment capacity.

·         The soldier should explore the Internet to do personal research.  Many companies offer loans to military personnel, and all reputed companies have an online presence. Soldiers should verify for themselves the various loans offered by different companies.  Researching online makes them much more informed and they learn the details of the loans as well as the qualifying criteria required for each specific type of loan.  Online comparison of loan quotes is easy and fast.

·         To lure soldiers, many payday and cash advance lenders open up shop near military bases, with names that attract them, like “Armed Forces Loans”, “Military Spot”, and “Army.com”.  These companies usually employ ex-army personnel to prove their credibility and draw the soldiers towards their products.  They usually charge high interest rates and as most soldiers do not know much about finance, they are easily trapped in a debt trap, from which they find extremely difficult to come out.  Soldiers should verify the credentials of such lending companies by verifying with agencies like Better Business Bureau and the local Chamber of Commerce.

·         For a short-term loan, the soldier should look out for a loan that offers the lowest interest rate and minimum charges.  The loan should have no entry or exit charges.

·         For a long-term loan, the soldier should find such a loan that offers the lowest interest rate, zero processing fees, no annual charges, and has easy installment payment option.  Additionally, the loan should also not have any penalty attached if the loan is pre-paid before the term expires.  The loan should have no entry or exit charges.