Healthy and General

USAA Career Starter Loan Review

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Top perks

The USAA Career Starter Loan is a unique personal loanstyle=”text-decoration: underline”> that offers low interest rates typically reserved for secured loans with collateral. Loan amounts can be up to $36,000 with payment terms up to 60 months. The interest rate is the same regardless of the term. Those without a solid credit scorestyle=”text-decoration: underline”> can qualify for the USAA loan.

Low-interest loan for those with little to no credit. Many people in their early 20s don’t have enough credit to qualify for a credit card, yet this low-interest loan is guaranteed for those attending a Service Academy. Cadets and midshipmen can get up to $36,000 at 0.75% interest. They can receive the loan as early as the beginning of their junior year. This loan is guaranteed for Service Academy cadets and midshipmen regardless of their creditworthiness.

Cadets and midshipmen commissioning through the Reserve Officer Training Corps (ROTC) college program and Officer Candidate or Training School (OCS or OTS) can qualify for up to $25,000 at 2.99%. ROTC cadets and midshipmen can receive their loans as early as 12 months prior to commissioning, and officer candidates up to four months prior. The loan for cadets and midshipmen for ROTC and OCS/OTS is subject to credit approval. USAA has not published the minimum score requirement, however many have qualified for the loan even with poor credit.

Flexible payment terms. The loan can be paid back over 12-60 months. Unlike most loans, where the longer the term the higher the interest rate, the interest rate with a USAA Career Starter Loan stays the same regardless of the term.

For Service Academy graduates, repayment of the loan starts as long as two years after they receive it. The first due date is August 15 of their commission year. The first due date for ROTC graduates is six months from their commission date. OCS/OTS graduates and military officers who receive their loans within one year after their commission date will have to begin paying back the loan 30 to 45 days after their contract date.

No collateral required. Typically the only loans with interest rates as low as 0.75% to 2.99% are secured loans. As a signature loan, however, no collateral is required to qualify for this loan. Military officers have an obligation to serve three to five years after their commission date. USAA understands that officers’ salary and job stability put them in a position to pay back the loan.

No prepayment or origination fees. There are no origination fees or prepayment penalties. USAA also offers a 15-day grace period with no penalty. However, after the 15 days, the penalty is up to 5% of the monthly payment.