Members of the military are as prone to financial emergencies as the rest of us. It is a matter of managing the same financial pressures as everyone else, and whether it is due to an unexpected medical bill or a final notice, the need to secure a military loan with no credit check can become acute.
There are some fairly obvious advantages to this loan option, not least the fact that loan approval without credit checks is granted very quickly. In fact, approval can be granted within a few minutes, and the necessary funds deposited in the account of the borrower within 4 or 5 hours.
There is little doubt this provides an advantage to applicants. However, there are a number of other factors that should be considered before applying for this military loan.
1. Approval Is More Likely
The challenge for anyone with a poor credit rating is to find a lender willing to grant them a loan. Traditional lenders are usually unwilling to take the risk, so will insist on checking the credit history of the applicant. But getting a military loan with no credit check means the credit history is ignored.
What this means is even applicants with an extremely poor credit history have loan options open to them, so the opportunity to rebuild their credit status exists. Basically, securing loan approval without credit checks is possible when the lender focuses purely on the ability of the borrower to make repayments.
All lenders want to know before granting this category of military loan is that the applicant will have enough in their next paycheck to clear the debt completely. And with bank details provided, the repayment is taken out immediately, ensuring the borrower cannot fail to pay even if they wanted to.
2. Limited Sums For Emergencies
It would be nice to secure large military loans with no credit checks, but the facility is available only with sums that are small. In fact, the most common sum provided is just $1,500, which should be enough to handle most unexpected financial crises.
The reason comes down to the amount of risk the lender is willing to accept. Anyone seeking sums of just $5,000 may need to agree special terms if they are to hope to get loan approval without credit checks, such as a higher interest rate or a longer repayment term. For a $50,000 loan, for example, lender will want to check the reliability of the applicant.
Also, because these kinds of military loans are chiefly the same as payday loans, there can be considerable pressure to meet the repayment schedule. Normally, the loan is repaid in full with the next paycheck, which could be as soon as 14 days. A $5,000 loan may be repaid over 90 days.
3. Agreeing A Repayment Term
There is no doubt that after securing a military loan with no credit check, the immediate cost of repayment is very high. This is chiefly because the short term of the loan means the lender would make little or no profit if they were to charge the normal rate. A 14-day loan at 10% APR would reap only a few dollars in profit.
Over the course of longer-term loans, a healthy profit is spread across the set number of months, but this luxury is not available when securing loan approval without credit checks. Therefore, the interest charged can be as much as 30%.
For larger loans, however, there is a chance to agree a longer repayment schedule than the normal 14-30 days. As has been mentioned, a $5,000 military loan could be repaid over 90 days, or a $10,000 loan over 6 months. Even $1,500 could be paid over 60 days, if the lender agrees early repayment would be too difficult to meet.