Several loan programs exist to help veterans purchase new homes, cover unexpected expenses like job relocations, start new businesses, and pay for career-expanding education post military service.

From credit unions and traditional financial institutions to specialized programs like VA home loans, there are several options to explore depending on what type of loan you need. Typically, these loan products provide benefits like discounts and lower interest rates, so we recommend comparing your options carefully.

What Type of Loans Can Veterans Get?

Veterans can get any type of loan that's available to civilians. This includes home loans, personal loans, student loans, auto loans, and more. Many traditional banks, online lenders, or credit unions cater to disabled veterans, surviving spouses, or active-duty military members, offering loans at better rates.

Loan programs that are exclusively designed for veterans include options like VA loans, SBA loans for veterans, cash-out refinance loans, specific student loans, and interest-rate reduction refinance loans.

Keep reading to learn more about some of the top options for veteran loans.

Benefits of Loans for Veterans

One of the main benefits of veteran-specific loans is that they offer lower interest rates compared to traditional loan products. This is especially true when it comes to specialized loan programs.

For example, the current average APR for 30-year VA loans was 6.78% at the time of publication. In comparison, the current average APR for a 30-year traditional fixed mortgage sits at 7.06%.

A signature benefit of a VA loan is a 0% down payment, which can help make home purchases more affordable for veterans. Other benefits that come with loans for veterans can include lower closing costs, flexible credit guidelines, and veteran discounts.

Which Veterans Are Eligible for Loans?

If you're a veteran, you'll need to meet several eligibility requirements in order to qualify for loans that are specifically designed for veterans. First, you'll have to get a Certificate of Eligibility (COE) for a VA Direct of VA-Backed home loan.

One of the main eligibility criteria when applying for a VA loan pre-approval is the service requirement. This will depend on the length of time and the period in which you served. Check with the VA's information portal for eligibility requirements.

Common requirements for a COE include:

  • 24 continuous months of service
  • Full period (181 days) of active duty
  • Less than 181 days if you were discharged for a service-connected disability

Veterans may need to satisfy other requirements from lenders such as a specific credit score or a home appraisal.

Loans Available for Veterans 

There are a wide range of loans for veterans available, depending on your specific needs. We’ve listed some of the most popular offerings below.

Home Loans

One of the leading programs offered to veterans is a VA home loan. This is a government-backed mortgage available through mortgage companies, banks, and private lenders, not the U.S. Department of Veterans Affairs. VA loans offer several benefits, such as low-interest rates, a 0% down payment if you qualify, and no private mortgage insurance (PMI).

There are several options available when it comes to VA loans, such as home improvement loans and refinancing loans:

  • VA Purchase Loans allow veterans to purchase a home without a down payment.
  • VA Rehab and Renovation Loan allows you to finance home improvements.
  • VA Loans for construction that help you cover the cost of building a new home.
  • VA Energy Efficient Mortgages are available for funding energy efficiency-related home improvements.
  • VA Interest Rate Reduction Refinance Loan (IRRRL) can replace your current VA mortgage with a loan at a lower interest rate.
  • VA Cash-Out Refinance can allow homeowners to trade home equity for cash.

Personal Loans

If you need a personal loan, you can choose an online lender, a traditional lender, or a credit union that specifically caters to military members and veterans.

Credit unions like Navy Federal Credit Union typically offer their members a number of perks and benefits, such as lower interest rates, discounts, and fewer qualifying requirements. Online lenders and banks usually don’t offer those benefits, but they may offer other benefits like autopay discounts.

Education Loans

While there are no specific loans for veterans to cover educational costs, the military may cover many of your expenses through assistance programs.

For example, the Montgomery G.I. Bill offers monthly financial assistance for financial assistance to qualifying applicants.

Veterans can also apply for Federal Direct Subsidized Loans and Direct Unsubsidized Loans that are available to all students. Compared to student loans from financial institutions and private sources, these loans offer lower interest rates.

Business Loans

While the VA doesn't offer specific business-related loans for vets, many banks offer incentives for retired servicemembers. Business loans for veterans can make it easier to start a business or expand an existing one. The Small Business Administration (SBA) offers several types of loan options, many of which are specifically designed for veterans.

You may also qualify for SBA Veterans Advantage Guaranteed Loans, where you can get 7(a) loans of up to $1 million with terms under 12 months. Veterans can also take advantage of general business loans offered by online and traditional lenders.

4 Loan Factors to Consider 

Before borrowing any type of loan, it’s important to compare your options and consider a few factors to ensure you’re getting the best possible deal, including:

1. Interest Rate

The interest rates you qualify for will depend on your credit score. If you have bad credit, you may be quoted higher interest rates. Be sure to pre-qualify with multiple lenders to discover the lowest rate offered for the loan.

2. Loan Cost

Other than the interest rate, there are a number of other fees and penalties that may increase your total loan cost. Lenders may charge prepayment penalties, late payment fees, and origination fees. It's important to consider all these factors to find the most cost-effective loan.

3. Length of the Loan

The term of the loan will determine how long you have to repay it, along with interest charges. Longer repayment terms will reduce your monthly payments and make the loan more affordable. However, the longer the loan term, the higher you'll pay in interest over the life of the loan.

4. Turnaround Time 

While some specialized loan programs for veterans may provide a number of benefits, they may also have longer turnaround times. If you need funds urgently, you should talk to the lender about how much time it may take for loan funding.

Best Loans for Veterans

The best loans for veterans are the ones that provide you with the lowest interest rates for your credit profile, a sufficient loan amount, and a loan term you’re comfortable with. Many banks cater to veterans, offering incentives for personal and business loans and VA-backed offers for mortgages.

The following lenders feature programs to support veterans, offering customized service and expert advice for vets:

Best VA Mortgage Loans

These organizations are recognized as trusted sources for vets to secure a VA mortgage at a lower rate. 

  1. Navy Federal: No minimum credit score, typically some of the lowest rates
  2. Veterans United: Minimum credit score of 620 required for best rates, can help you apply for a COE
  3. Mutual of Omaha: No lender fees, established lender with over 100 years in business
  4. American Federal Mortgage: Competitive rates, relaxed qualification guidelines

Best Personal Loans for Vets

Many of these banks offer no origination fees, saving vets money. Some offer specialized service to veterans.

  1. Navy Federal: No minimum credit score, APR as low as 8.99%
  2. VA Financial: Up to $40,000, APR as low as 5.99%
  3. US Bank: Better options for members, APR as low as 7.99%
  4. PenFed Credit Union: Must be a member, APR as low as 8.99%

Check here for current VA loan rates from many top lenders. 

How To Get a Veteran Loan

Whether you’re applying for a VA home loan, a federal student loan, or a personal loan, it’s important to understand the eligibility requirements, ensure you have the necessary documents, and pre-qualify.

While the specific application process will differ based on the lender and the type of loan you’re applying for, these are the general steps you can follow to get a loan:

  1. Get a copy of your credit report and check your credit score.
  2. Take steps to improve a lower credit score by reducing your debt-to-income ratio (DTI), paying bills on time, and disputing errors on your credit report.
  3. Check eligibility requirements for the type of loan you want.
  4. Gather the necessary documents for the loan, including your Certificate of Eligibility when applicable. 
  5. Shop rates and apply for a pre-approval from your top lenders.
  6. Compare your loan options and submit a formal loan application.

Find a Veteran Loan Today

With so many loans options available for veterans, it's important to compare rates and  choose a trusted lender. Getting a pre-approval will give you a clear idea of what you qualify for and help you determine your best choice.

Regardless of the type of loan you borrow, be sure to check your budget to determine if you’ll be able to repay the loan comfortably. If you're struggling with debt, consider finding a debt relief program first to clear your balances and prepare for a loan.