soldier holding a Model of house

by Aidan Kang, CFA
Senior Writer
UPDATED: July 27, 2021

Are you on active military duty or a veteran of the army? Do you need cash to cover an urgent financial need? If you or your family are currently facing financial problems, you’re probably looking at your loan options.

Can you get a loan from the army? Yes, you can. 

That’s through The Army Emergency Relief (AER) that was created in 1942. It’s a private, non-profit organization that continues to provide no-interest loans, grants, and scholarships to eligible applicants. AER offers financial assistance to active-duty soldiers, veterans, and their family members as well as orphans and widows of soldiers who retired or died while in active duty. Additionally, it covers medical retirees as well as Army Reserve and National Guard Soldiers who were activated under Title 10 orders for more than 30 days.

You can turn to government-backed VA loans if you’re looking to become a homeowner. It’s a type of loan that’s intended for veterans, active service members, and their surviving spouses. Another option you may want to consider is a personal loan.

What are the Types of Loans Available if You’re a Veteran or In Active Service?

aer site

1. Army Emergency Relief

Military families can turn to the Army Emergency Relief (AER) for financial assistance. To date, AER helped more than 40,000 families and provided nearly $70 million worth of financial aid to soldiers and their families. 

The organization offers no-interest loans, grants, and scholarship programs. There are no limits on the loan amount. However, AER takes into account the reason for the request when deciding whether to approve your army emergency relief loan application. They have strict specifications when it comes to where the proceeds will go.

AER provides funds for urgent and unexpected financial needs, such as:

  • Vehicle repair
  • Rent/mortgage payment
  • Medical expenses
  • Utility bills
  • Funeral expenses
  • Food
  • Emergency travel

AER generally doesn’t provide funds for non-essential purposes, such as:

  • debt consolidation
  • home improvements
  • credit card payments
  • unnecessary travel

Steps to Apply for AER Assistance

  1. Contact your unit commander or local Army Emergency Relief Office. You may also apply for financial help to the Aid Societies for the Navy and Marine Corps, Air Force and Coast Guard, and the American Red Cross.
  2. Provide your Military ID and documents that show your current financial status, such as income statements and bills.
  3. Your commander or local AER office will assess your request and determine the amount of financial aid they can offer.

How Do You Pay Back Your AER Loan?

You can choose from several payment methods.

Send payments to:

Army Emergency Relief
2530 Crystal Drive
Suite 13161
Arlington, VA 22202

AER doesn’t accept loan payments made through the phone, debit and credit card, or cash.

veteran loans

2. VA Loans

VA loans are home loans that are backed by The United States Department of Veterans Affairs. These loans, which are provided by private lenders, don’t need any down payment and have less stringent credit requirements because they’re guaranteed by the government. 

There are still some requirements you need to meet to qualify for a VA loan and become a homeowner. If you have questions about VA loans, you can call 1-877-827-3702, Mondays through Fridays, from 8:00 a.m. to 6:00 p.m. EST. Visit the Veterans Affairs website if you’re looking for your regional loan center.

What are the Requirements for a VA Loan?

  • You must be an active-duty member who served at least 90 days
  • You must be a veteran who spent 90 days in wartime and 181 days in peacetime
  • You completed 6 years in the Selected Reserve or National Guard
  • You’re a spouse of a prisoner of war or an MIA service member
  • You’re a surviving spouse of a veteran who died while in action or from a service-related disability. Only those who did not remarry are eligible.
  • The US Veterans Affairs does not specify the credit score requirement for a VA loan. However, private lenders that offer VA loans generally require applicants to have a credit score ranging from 580 to 660 to be eligible.

What are the Types of VA Loans?

  • Purchase Loan. It’s a type of VA loan that helps you buy a house at affordable interest rates.
  • Cash-out Refinance. Veteran mortgage holders can borrow against the equity of their home to obtain funds for various purposes such as home improvements or paying off debt.
  • Interest Rate Reduction Loans. You can refinance your existing VA loan for a lower interest rate.
  • Native American Direct Loan. It’s a loan program that aims to help Native American veterans by providing them with funds to purchase, refinance, build, or improve their houses on Federal trust land. NADL can refinance your VA loan for a lower interest rate.
  • Adapted Housing Grant. It’s a program that helps veterans with permanent and total service-related disabilities to purchase, build, or modify a home to meet their unique needs.

How do You Apply for a VA Loan?

  • You need to obtain a VA loan Certificate of Eligibility through the eBenefits portal or through your lender. You can also apply by mail. Send a Request for a Certificate of Eligibility to the address indicated in the form.
  • If you’re a veteran, you need to provide a DD Form 214. If you’re in active service, you need to provide a signed statement of service. It must include your full name, date of birth, SSN, when you started your service, duration of lost time, and name of the command giving out the information.
  • Aside from the above-mentioned documents, you also need to prepare your recent pay stubs and bank statements.
  • Bring all these to a private lender and get preapproved for a VA loan.

Can You Get an Army Loan if You Have Bad Credit?

You may still apply for an army loan even if you have bad credit. The AER, for instance, is a no credit check military loans servicing. Unless it’s specifically mentioned, there’s no indication that an army loan requires a specific credit score. Private VA loans, on the other hand, will require you to have a credit score of at least 580 to 660 to apply. Personal loans are excellent options if you have bad credit.

Credit Scoring System For FICO and VantageScores

3. Personal Loans

Several lenders offer loans to veterans, active duty service members, and their families. Lenders give out personal loans in a lump sum and you pay it back in installments for a certain period. They’re best for debt consolidation, home improvements, large purchases, and financial emergencies.

  • Avant – It offers personal loans up to $35,000 with an APR ranging from 9.95% to 35.99% and loan terms of 24 to 60 months. It’s an ideal option if you have a low credit score. It offers instant military loan approval as soon as the next business day after filing a loan application.
  • SoFi – You may borrow as much as $100,000 with a fixed rate that starts at 5.99%. It’s a good loan option if you’re planning to use the funds for a large purchase, medical expenses, or home renovation. It requires a minimum credit score of 680.
  • Omni Financial – Loan amounts range from $500 to $10,000 payable within 6 to 36 months.
  • Navy Federal Credit Union – You can borrow cash up to $50,000 and repay it for up to 60 months. It’s APR range is from 7.49% to 18%.  
  • Prosper – The available loan amounts range from $2,000 to $40,000 with an APR that starts at 7.95%. You must have a credit score of at least 640.

Are There Laws That Protect You Against Unfair Lending Practices?

Established in 2006, the Military Lending Act protects active-duty military members from unlawful lending practices. Lenders have to comply with the MLA when they offer loans, such as personal loans and overdraft lines of credits, to active duty members and their families.

Under the MLA, the maximum Military Annual Percentage is 36%. They cannot impose a penalty if you decide to pay back a part or all of your loan in advance. Furthermore, they’re not allowed to impose mandatory allotments, which let them take a portion of your paycheck to repay your loan. Lenders cannot ask you to surrender your rights under the consumer protection laws such as the Service Members Civil Rights Act.  

The SCRA offers additional support and protection to members of the military as they manage their financial obligations. It covers rental agreements, security deposits, health, and life insurance, to name a few. Under the SCRA, financial obligations, such as credit cards, vehicle loans, student loans, home equity loans have an interest cap of 6%.


Everyone goes through financial problems at some point in their lives. Military families are no different. Fortunately, army loans, VA loans, and personal loans are available to provide them with the financial assistance they need. 

Soldiers and their families may apply for an AER loan if they experience financial emergencies. For homeownership, VA loans are the best option for active-duty members and veterans. Meanwhile, personal loans are ideal for large purchases or expenses that can’t be covered by the army loan or VA loan. Whatever type of loan you choose, you need to do your research. Remember that a loan is a financial responsibility that can either help improve or damage your finances in the longer term.