Ever since the 1912 Sherwood Act, which guaranteed pensions for veterans regardless of health, veterans have held a special status when it comes to financial services. Today, veterans qualify for a range of benefits from the federal government, banks, credit unions, and other financial institutions.
Here are 7 different financial services benefits that veterans can enjoy:
1. VA Loans
VA loans were introduced as part of the 1944 GI Bill and have helped more than 22 million veterans purchase their own home. A VA loan is a home loan offered by qualified private lenders and guaranteed for up to a quarter of the amount by the U.S. Department of Veteran Affairs (the VA). It is offered to active and retired service members and eligible surviving spouses. Thanks to the federal government guarantee, veterans are able to take out VA home loans without a down payment or mortgage insurance.
In 2019, the VA increased its maximum guarantee by 7% to $484,350 to keep up with the rising cost of housing. Any loan above the maximum amount is known as a jumbo VA loan and requires a down payment or a higher interest rate.
2. Credit Unions
Among the thousands of American credit unions, there are many that exist to serve veterans. By definition, a credit union is a financial cooperative controlled by its members. In exchange for a small annual fee, members qualify for favorable rates on things like mortgages, loans, and savings accounts.
Prominent examples of veteran-oriented credit unions include Navy Federal Credit Union and PenFed, the largest and third-largest credit unions in the United States respectively. PenFed accepts anyone who serves or has served in the Armed Forces, works for the U.S. Department of Defense, or works or has membership in any of approximately 170 qualifying organizations with links to the military.
3. Personal Loans
A personal loan is an all-purpose, unsecured loan available to veterans and regular civilians alike. Thousands of online lenders, banks, and credit unions offer personal loans with amounts ranging from $1,000 to $100,000 and APRs ranging from sub-4% to 35.99%.
The main requirement of a personal loan is your personal credit score, and many lenders require a minimum score of 620-680. This can cause problems for veterans, especially those who have only just returned or about to return to civilian life and haven’t had a chance to build up a credit history. Thankfully, some credit unions and lenders offer special low-credit or no-credit personal loans to help veterans secure funding.
4. Student Loan Debt
At last count, there was more than $1.5 trillion of student debt in the United States, owed by 44.5 million people. While exact figures are hard to come by, it’s safe to say many veterans hold student debt.
Fortunately, there are a number of programs to help veterans manage student loans and debt.
Individuals that enlist in the military after graduation may be eligible for the federal government’s Student Loan Repayment Program, which pays off up to $65,000 of the student’s loan debt.
Servicepeople who are deployed are exempt from making payments on federal student loan debt until they return from duty, protecting them from falling into default.
The VA’s Veteran’s Education Assistance Program offers to pay $2 for every $1 contributed by a veteran toward their own tuition.
The VA’s Survivors’ and Dependents’ Education Assistance program offers up to 45 months of education and assistance benefits, or up to 81 months of benefits if used together with other VA education programs.
On August 21, 2019, President Trump signed a presidential memorandum discharging the federal student loan debt of totally and permanently disabled veterans.
5. Business Grants
The vast majority of American small business owners rely on loans until their business becomes self-sustainable. Alternatively, a small number of businesses qualify for grants – gifts or awards that are not re-payable – from the federal government, state government, or private institutions.
In an effort to help get small business financing in the hands of veterans, the U.S. Small Business Administration has introduced several new initiatives. It has set a zero upfront fee for all veteran loans authorized under its SBA Express program up to $350,000. In addition, it has established veteran entrepreneurship training programs and special grants for female veteran entrepreneurs and service-disabled veteran entrepreneurs.
Like the lending industry, there are many insurance companies dedicated to providing favorable coverage to active and retired servicepeople. These days, veterans can find deals on all kinds of insurance, from homeowners, renters, or auto insurance through to different types of life insurance.
Take USAA as an example. It serves, active military personnel, veterans, and their families. It offers a range of financial services and insurance products, including homeowners insurance. Its products are similar to rival insurers – with coverage for the home, personal belongings, and liability – but are designed for veterans, complete with low rates and flexible payments.
7. Online Banking
In online banking, it isn’t only credit unions that offer special deals to military veterans. Some of the largest banks offer benefits to active and former servicepeople in the form of free checking accounts, lower fees and charges on savings accounts, and occasionally even favorable introductory rates.
Chase is one example. With its Military Banking benefits program, veterans can open and maintain a bank account with no minimum balance requirement and no monthly service fee. Other large banks, including Bank of America and Wells Fargo, offer online bank accounts with special benefits for veterans.
Thanking You for Your Service
As America marks another Veterans Day, financial institutions of all types are quite literally showing their appreciation for people who have served in the military. The VA loan is the best-known product for veterans, but the truth is you don’t have to be a homebuyer to qualify for great deals or benefits. Whether you’re in the market for a loan, an insurance policy, debt relief, or even a small business grant – if you or a family member has served, it’s worth browsing the market for veteran benefits.