Personal Loans for Veterans With Bad Credit

The Consumer Financial Protection Bureau reported in 2020 that a sizable percentage of servicemembers struggle with delinquent debts shortly after they leave active duty. A FINRA Investor Education Foundation study found that vets are 40% more likely to be underwater on their mortgage, 28% more likely to make a late home payment, and 9% more likely to have problematic credit card behavior than non-veterans.

These numbers indicate that it’s not uncommon for retired service members to struggle to get approved for the loans they need. But you can find personal loans for veterans with bad credit if you know where to look.

3 best personal loans for veterans with bad credit

Identifying the right lender for a personal loan can seem daunting, especially if you’re a veteran whose credit score has taken a hit. On the FICO credit scoring model—which many lenders use—bad credit falls between 300 (the lowest score possible) and 579.

If your credit score is around that range, here’s an overview of lenders to explore.

Lender	Min. credit score	Rates (APR)
Navy Federal	Not disclosed	8.99% – 18.00%
Avant	580	9.95% – 35.99%
Credible1	Varies	7.49% – 35.99%

Navy Federal – Top-rated veterans’ choice

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LendEDU rating: 4.6 out of 5

• Offers competitive rates
• Special discounts for military members
• Allows joint applications

Navy Federal earns its reputation by offering loans with competitive interest rates, tailored to veterans and active military members. These loans come with special discounts, underscoring Navy Federal’s commitment to serving those who have served their country. 

Because it’s a credit union, Navy Federal personal loan rates max out at 18.00%—much lower than most banks and online lenders.

The option for joint applications could be advantageous, extending loan accessibility to veterans with less-than-perfect credit scores. This inclusivity, combined with favorable rates and military-focused benefits, positions Navy Federal as a distinguished option for veterans seeking financial assistance.

Avant – Flexible loans for challenged credit

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LendEDU rating: 4.6 out of 5

• Options for bad-credit borrowers
• Fast funding
• Mobile app for account management

Avant distinguishes itself by accommodating individuals with lower credit ratings, acknowledging the financial hurdles veterans may face. The company’s quick funding process ensures that veterans can access the funds they need without unnecessary delays. 

Avant’s mobile app simplifies account management, allowing busy users to manage their loans on the go. This combination of speed, accessibility, and technological convenience makes Avant a compelling choice for veterans seeking financial support, particularly those navigating the challenges of rebuilding their credit.

Credible – Best marketplace

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LendEDU rating: 5.0 out of 5

• Variety of lenders available
• Prequalification option
• No hidden fees

Credible is a leading loan marketplace that provides veterans with a one-stop shop to compare offers from multiple lenders. This platform stands out for its straightforward prequalification process, which allows borrowers to gauge their eligibility without harming their credit score. 

The assurance of no hidden fees fosters a transparent and trustworthy environment for loan seekers. Credible’s approach not only simplifies the search for the best loan but also aligns with the financial interests and values of veterans, making it an exceptional choice for those prioritizing choice, clarity, and convenience in their loan selection process.

Alternatives to personal loans for veterans with bad credit

Veterans can turn to the Department of Veterans Affairs for help with home loans (called VA loans), but fewer veteran-specific resources exist for personal loans. Here are a few alternatives to consider.

Veteran-specific financial assistance

Veterans face significant hurdles in finding employment and establishing good credit upon leaving the military. To help, many nonprofits and other organizations offer programs and financial assistance designed for veterans, including:

• Operation Homefront offers vets, among other services, financial assistance with bills and emergency expenses.
• National Association of American Veterans can provide emergency assistance referrals to veterans in need.
• USA Cares can help veterans access emergency financial aid.
• Veterans of Foreign Wars offers scholarships to student veterans.

Friends and family loans

Asking loved ones for financial help can be difficult, but friends and family may be willing to lend you money with fewer hurdles.

Just prioritize repaying friends and relatives when you borrow from them in an effort to maintain a positive relationship. And always be gracious, even if a loved one says no.

Cosigned personal loans

If your loved ones can’t help by handing over the cash, they may still be able to act as a cosigner for a personal loan. If they have a stronger credit score, they can help you qualify for a larger loan amount and better rates by signing their name to your loan as well.

These are the best personal loans with a cosigner for veterans to consider.

Home equity loans and HELOCs

If you own or are financing a home, whether through a traditional mortgage or a VA loan, you may be able to tap into the equity you’ve built through a home equity loan or home equity line of credit (HELOC). These often have more favorable terms and rates than personal loans for borrowers with bad credit.

How to choose a personal loan for veterans with bad credit

We’ve put together a few tips to ensure you find the best loan option—with the best rates, terms, and conditions for your financial situation.

1. Shop around for loans

First, take the time to consider multiple lenders. You might think, with poor credit, that your options are limited, but veterans with bad credit may have more options than they realize. Your best bet is to use an online marketplace that lets you compare multiple lenders at once.

2. Prequalify

If you see loan options you like, get prequalified to understand the rates and terms you’d likely be offered, if approved.

Getting prequalified with multiple lenders isn’t a firm commitment; you don’t have to move forward if they give you the green light. But it also doesn’t mean you’re 100% guaranteed to get the loan—it’s simply an indicator that you’re likely to be approved as long as you provide all the right information.

Prequalifying only involves a soft credit pull, so it won’t hurt your credit score, either.

3. Compare APRs, not just interest rates

When comparing the loans you’re prequalified for, don’t just go with the lowest interest rate. You should compare annual percentage rates (APRs), which include personal loan fees (including origination fees) in addition to the interest rate. This better reflects the true cost of the personal loan.

In addition to APRs, you’ll want to compare loan amounts and timelines. Is the lender offering you a large enough loan, and is the repayment term in line with your expectations? For instance, a longer repayment term will help keep your monthly loan repayments smaller.

How to apply for a personal loan if you’re a veteran with bad credit

Ready to apply? Here are the steps to take to get your personal loan funded—and fast:

1. Review your credit report

Before researching personal loans for veterans with bad credit, it’s important to know where you stand. Your credit score may be stronger than you think, and you have more options available to you. 

Or maybe your credit score is even lower than you thought, and unless you need money for an urgent expense, it makes more sense to improve your credit before applying.

Whatever the case, knowing your score is important. It will help you refine your search to the best personal loans for your credit situation.

2. Gather your documentation

While you don’t need all your financial documentation prepared to get prequalified—only to get approved—it’s helpful to have all the paperwork ready to go. This way, you can reference it as you browse lenders.

When applying for personal loans, you may need:

• Personal info (name, address, birth date, Social Security number, tax identification number)
• Employer info
• Income documentation, such as pay stubs, tax returns, or bank statements

3. Shop around and get prequalified

Don’t just go with the first personal loan you find. We recommend using an online marketplace to field multiple loan options and compare terms. Follow the steps online to get prequalified for any personal loan options you like.

4. Apply online or in person

After comparing multiple lenders and choosing the best personal loan option for you, fill out the application online (or apply in person, if you’re going with a bank or credit union). The process should take only a few minutes, and you might get approved just as fast.

Some lenders may need more time—a day or two—to review your application.

5. Connect your bank account for fast funding

Once approved, make sure your bank account is connected to your loan account. This ensures the lender can fund your account with the money you’re borrowing. Some lenders offer same-day funding, but others may take a few business days.

FAQ

Does the VA give personal loans to veterans?

No; the VA guarantees home loans but does not offer veterans personal loans.

Can a veteran get a loan with bad credit?

Yes, veterans can secure a loan even with bad credit. Various lending institutions provide loans to veterans with less-than-perfect credit scores, understanding that service-related financial difficulties may have affected their credit rating.

Can you get a VA loan with a 500 credit score?

It is possible, but challenging, to secure a VA loan with a 500 credit score. Most lenders look for scores of 580-620 or higher. However, check out Credible and LendingTree, which work with many partner institutions and may be able to match you with a suitable lender.

What types of loans are available for veterans?

Various loans are available for veterans, including VA home loans, personal loans, auto loans, business loans, and refinancing loans. This typically depends on the individual lender and the veteran’s financial position.

Recap: Best personal loans for veterans with bad credit

Lender	Rates (APR)
Navy Federal	8.99% – 18.00%
Avant	9.95% – 35.99%
Credible	7.49% – 35.99%