While there are no personal loans designed specifically for veterans, including disabled veterans, veterans can apply for personal loans just like anyone else. Veterans can receive specific benefits for other financial products, including U.S. Department of Veterans Affairs (VA) home loans, which are a type of mortgage.

Learn more about financial products geared specifically for veterans, as well as how to choose a personal loan.

Personal Loans for Disabled Veterans

Neither the VA nor financial institutions offer personal loans specifically for disabled veterans, but disabled veterans can apply for general personal loans with banks, credit unions, and online lenders.

Generally, personal loans are issued as a lump sum that you repay over time in regular payments. They can be used for nearly any financial need and are usually issued as unsecured loans, meaning they don’t require collateral.

To get a personal loan, disabled veterans must meet the same eligibility requirements as anyone, such as minimum income and credit score requirements. Once approved, you can discuss loan terms such as interest rates, length of loan, and monthly payments.

Many traditional and online lenders will work with veterans and active-duty military members as well as their families. These include: 

• USAA
• Navy Federal Credit Union
• Military-Loans.com
• VAFinancial.com
• Armed Forces Bank

Other Financial Assistance for Veterans 

Beyond personal loans, disabled veterans could qualify for other types of loan product to use for specific purposes, like buying a home or building a small business.

VA Home Loans

The VA guarantees home loans that financial institutions issue to veterans. The benefits of a VA home loan include no down payment requirements, no prepayment penalties, and no requirement to purchase private mortgage insurance (PMI).

These loans also have competitive interest rates. Disabled veterans also are exempt from paying the VA funding fee, a one-time payment used to help lower the cost of the loan for U.S. taxpayers.

VA Cash-out Refinance Loans

Veterans who own their own home and have equity can refinance their existing home loan to access the value of the equity. They can use these funds to pay for home improvements, debt consolidation, or other financial needs.

Interest Rate Reduction Refinance Loan (IRRRL)

An interest rate reduction refinance loan (IRRRL) is typically used to refinance an existing VA home loan to get a lower interest rate. You can also use an IRRRL to refinance a VA home loan with an adjustable rate to one with a fixed rate, to get predictable monthly payments that will not change.

Native American Direct Loan (NADL)

Native American veterans or veterans married to Native Americans could qualify for a home loan to purchase, build, or renovate a home on federal trust land. The loans, called Native American Direct Loans (NADLs), also could be used to refinance an existing loan for a home on federal trust land to lower the interest rate.

Temporary Buydowns

Veterans, including disabled veterans, could receive upfront funds via an escrow account, which are then applied to the monthly payment for a period of one to three years. As a result, you would have a lower monthly payment in the first one to three years of the home mortgage. The buydown funds could come from the seller, the lender, the builder, or the veteran. 

VA Specially Adapted Housing Grants

The VA offers Specially Adapted Housing grants for disabled veterans who want to buy or renovate a house to meet their needs, such as by installing a ramp or widening a doorway. To qualify, veterans must own or plan to own the house, and they must have a qualifying service-connected disability.

Small Business Loans

The Small Business Administration (SBA) partners with lenders to offer a variety of loans to small businesses, including veteran-owned businesses. These include:

• Standard 7(a)
• 7(a) Small
• SBA Express
  

Loan amounts, guaranty percentage, collateral requirements, and other terms and conditions vary by SBA loan. 

The SBA offers the Military Reservist Economic Injury Disaster Loan (MREIDL) program for veteran-owned small businesses with employees who serve in the Reserves or National Guard. They could receive loans of up to $2 million in the event that an essential employee is called to active duty and the business owner is unable to meet their operating costs.

What to Consider When Choosing a Personal Loan

When you’re shopping for a personal loan, compare several loans. You can often pre-qualify for a personal loan with a soft credit check that does not affect your credit score. Or, if you apply for several personal loans within a short time period (within 45 days), the hard credit checks will only count as one credit check and will only have a minor, temporary effect on your credit score.

Compare a number of factors to determine which loan is the best choice for you, including interest rate, length of loan, fees, and turnaround time.

Interest Rate

Personal loans typically have fixed interest rates, but they vary by lender. So, it’s important to get rate quotes from at least three different lenders to find the best interest rate. When you have a lower interest rate, you can save more money in the long term and have lower monthly payments.

Length of Loan

The loan term determines how much your monthly payment will be, as well as how much interest you will pay over the life of the loan. Shorter loan terms result in lower interest costs, but higher monthly payments. Longer loans offer lower monthly payments, but they will be more expensive in the long run. The right loan term for you will depend on your financial situation.

Cost of Loan 

Lenders may charge fees to take out personal loans, which can increase the total loan amount. These include origination fees, application fees, and documentation fees. In addition, you could incur late fees for making late payments, as well as prepayment penalty fees by paying the loan off early.

Turnaround Time 

Some personal loans could be approved and funded on the same day, while others may take several days for approval and funding. Ask each lender what the funding time is to determine when you’ll receive the funds from your personal loan. If you need funds immediately, turnaround time will likely be a high priority when comparing loans.

The Bottom Line

Disabled veterans can apply for personal loans at traditional financial institutions such as banks or credit unions, as well as with online lenders. In addition, they could qualify for financial products like housing loans or grants, as well as small business loans. As with all borrowers, disabled veterans will need to meet the qualification requirements of the lender to be approved.