Military & Veteran Debt Relief Options

Veterans and active military struggle with mortgages, auto loans and credit card debt the same as civilian consumers. Bills can pile up while you’re deployed or if you’re a vet and just lost a job. Find out what debt relief options are available to you.

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Debt Solutions for Veterans

Frequent relocation and inexperience managing money could cause stress for veterans and active military. Learn how much financial assistance is available through debt management, VA personal loans and credit consolidation that will help you stay ahead of debt.

Veterans & Unemployment

Employers realize the benefit of having veterans in their workforce, but it’s still tough to transfer military experiences to civilian jobs. Find out how government programs and incentives can help you get the education or training you need to land the job you really want.

Financial Assistance & Benefits for Veterans

It’s not unusual for consumers, especially veterans and active military, to hit bumps in the financial road. Fortunately, there are benefits and programs available to smooth out the rough spots. Find out more about what the VA and private businesses are doing to assist you.

Home > Military & Veteran Debt Relief Options

Veterans and active-duty military personnel face their own unique challenges, but their service to the nation — whether past or ongoing — does not exclude them from many of the same financial pressures and pitfalls that confront civilians.

Luckily, when it comes to debt management, debt relief, or financial assistance for veterans or active troops, there are programs available.

But first, a word of caution.

Debt and Security Clearance

If your job requires a security clearance, the Uniform Code of Military Justice Article 134 — a catchall often described as the “Devil’s Article” — sets rules for unbecoming behavior that can cost you. This means absolutely minding your budget, or at least demonstrating you’re getting your financial fortress in order.

For solid, assorted reasons — you’re not seen as trustworthy; your judgment is suspect; you’re a candidate for bribery, or other illegal acts — too much debt can cost you your security clearance. In fact, debt trouble is the No. 1 reason active duty personnel lose their security status.

Keep this in mind: If you’re applying for a job that requires security clearance. The military can and will pull your credit report. If you’re going to stay on track for promotions, more responsibility and higher pay, you simply must keep your finances well in hand.

OK, that’s among the reasons why, as an active member of the service you should keep a tight rein on your finances. Here’s what you came for: How to do it.

Financial Assistance Programs

Right off the bat, whether you’re a veteran or on active duty, look for businesses that cater to service personnel. Give these programs a chance. You’re not taking unfair advantage of your service; you’re giving the provider — who knows your dollars are tight — an opportunity to express his/her gratitude.

Otherwise, do not allow yourself to be locked into a state of financial anxiety. Instead, avail yourself of the programs set in place to help stretch your scarce dollars. Here are a few:

Servicemembers Civil Relief Act (SCRA): Getting ambushed by creditors when you’re deployed is nothing new. Fortunately, Congress acted to help boost active-duty service personnel, reservists, and members of the National Guard — while on active duty — with SCRA, which includes protections from being taken advantage of while you’re serving your country. Provisions, according to, include:

  • Prevents your landlord from evicting you unless the rent is higher than $4,089.62 per month (this amount changes every year)
  • Stops foreclosures without a court order
  • Your vehicle can’t be repossessed without a court order if you made a deposit, or at least one payment before you joined
  • You can’t be taken to court for civil proceedings; this includes divorce and child-support hearings
  • Keeps the owner of a self-storage facility from selling your belongings for overdue rent without a court order
  • Lets you terminate your current cell phone contract if you relocate for at least 90 days to a location that doesn’t have coverage under your current provider
  • Lets you end a vehicle lease you signed before joining if you are mobilized, PCS OCONUS, or deploy OCONUS for at least 180 days
  • Lets you end a housing lease without penalty if you deploy for 90 days or more
  • Limits interest on all loans taken out before joining the military to 6%. This includes auto loans, mortgages, student loans, credit cards, etc.
  • Also, if you use any of your SCRA rights and delay payments, it won’t reflect on your credit report

Joint Federal Travel Regulations: Designed to protect military personnel facing foreclosures or evictions, this regulation provides cash allowances to assist with travels and transfers associated with landlord actions.

Military Lending Act: The MLA puts a cap on interest and fees imposed on military service personnel who indulge in what amounts to desperation debt: payday loans, tax-refund anticipation loans, and vehicle title loans. It’s not much of a cap, really — 36% — but it beats what civilians sometimes pay.

Homeowner’s Assistance Program: Available to active-duty personnel and veterans, as well as civilian employees of the Department of Defense and surviving spouses. HAP provides financial aid for qualified candidates who have to sell their homes at a loss, or even if they are unable to sell them.

Nonprofit Credit Counseling: Military personnel and veterans should know better than most the value of consulting expert specialists in complicated matters. Nonprofit credit counselors understand which levers to press to create the best possible circumstances to manage, and ultimately eliminate, debt.

If consolidating your debt into a single payment (with an ironclad vow to avoid at all costs running up those paid-off credit cards again) with a lower interest rate seems desirable, investigate your options. The better your credit score, the better the terms you can expect to receive. Keep in mind those lenders that cater to veterans and active-duty personnel: USAA and Navy Federal Credit Union.

Other Sources of Military Debt Relief

Working your way through the Veterans Administration bureaucracy can take its toll. Still, completing the journey can be useful. Among other things, the VA offers financial advice and legal counseling.

Meanwhile, if you’re a veteran battling to make ends meet after leaving your service, there are other sources. We mentioned nonprofit credit counseling. Here are a few other options:

  • The American Legion can step in with cash grants for families needing help with the cost of shelter, food, utilities, and health expenses.
  • MilitaryOneSource, a Department of Defense organization, provides free financial counseling to current and retired military members and their families.
  • Organizations that provide financial assistance to veterans include Operation First Response and The Coalition to Salute American Heroes. Each intervenes on behalf of veterans who are facing emergencies such as utility shutoffs, foreclosure or eviction, vehicle payments, groceries, and food.
  • USA Cares strives to keep post-9/11 veterans in their homes. The organization reports it has surpassed 100,000 families served with various support measures, allocating more than $10 million in grants to support veterans facing assorted troubles, from unemployment to foreclosure to PTSD.
  • Disabled American Veterans, as its name suggests, serves veterans who became disabled as a result of their service. With more than 1,300 chapters and 1 million members across the country, DAV helps provide the resources disabled veterans and their families need to pursue life to its fullest. Services include transportation, assistance with applications for services, education, and home-loan guarantees.

Importance of Budgeting

Of course, financial assistance for veterans and/or active duty military begins where it does for all Americans, at the proverbial kitchen table … with a budget. This is the last thing in the world that looks like fun, but it’s as essential to your pecuniary health as mastering a 20-mile hike in full combat gear is to your survival in hostile territory.

No financial assistance program ever created can deal with your money needs if you’re unwilling to do the tough work of figuring out where your income goes, developing a plan to manage it, and sticking to it.

Luckily, there are apps to help you strategize your goals, which ought to appeal to the George S. Patton in every military person, active or veteran.

Military & Veteran Debt Statistics

Embarrassed that you’ve let things get out of hand? Worried that you’re the only one in uniform fretting over financial stuff? Americans in uniform have cringed over the state of their finances since the Revolutionary War. Why, Benedict Arnold went from hero to the man whose name is synonymous with treason and traitor in part because of money.

Don’t be like Ben. Instead, use the statistics below, derived from an aging, but still useful, study by FINRA Investor Education Foundation, as a spur to help you get your finances turned around.

  • 36% of military families have problems meeting their financial obligations
  • 25% of respondents with checking accounts have overdrawn their accounts.
  • 10% of families with a mortgage loan have been late on at least one payment in the past two years.
  • 3% of military families has foreclosed on their homes
  • 3% of military families have declared themselves bankrupt in the past 2 years.
  • 9% of those contributing to their retirement funds have taken a loan in the past 12 months, and 6% have done a permanent hardship withdrawal from their retirement plan.
  • More than ¼ of credit card holders owe $10,000 or more on their account
  • 19% are dissatisfied with their current financial condition; only 26% are satisfied and 55% are neutral.

So, lots of you are in pretty much the same place. The good news: A FINRA study last year indicates that veterans are, by most measures, doing better than civilians when it comes to managing money.

What this suggests for those who are struggling is you can yet become the commander of your finances. The tools are out there to help you. It’s time you laid your hands on them, and ran them through their drills.

VA Program: Home Loans for Veterans

Taking advantage of VA mortgage rates is one of the top benefits of being in the military. VA home loan rates are typically lower than those for conventional loans. The Veterans Administration guarantees up to 25% of the payment on VA home loans, which means no private mortgage insurance or down payment is needed. Learn more about the guidelines and requirements for this extraordinary military benefit.

VA Personal Loan Options for Veterans

There are several lenders offering personal loans for veterans and active members of the military, even those with bad credit. Unsecured loans up to $40,000 are available and interest rates range from as low as 4.99% to 36%, depending on your credit history. Military spouses and dependents also are eligible for financial assistance. Personal loans can be used for any purpose, whether it’s paying off credit cards, buying a new car or a home improvement project. In most cases, you can apply online and expect an answer in less than 24 hours. Some lenders have special rates for military, but restrictive conditions – approved credit score, direct deposit checking account, etc. – must be met to qualify.

Debt Help for Military Spouses

Spouses of active members of the military can get help paying their bills and loans under the Servicemembers Civil Relief Act. The law caps credit card and mortgage interest rates while on active duty and provides protections against eviction and foreclosure. In addition, there are health and life insurance benefits, housing benefits and tax deductions for students who are military spouses.

More recently, Blue Star Families and the Institute for Veterans and Military Families released the results of the 2020 Military Lifestyle Survey, providing these similarly bleak numbers, because troubles for veterans or active-duty troops often spill over onto their spouses:

  • The most common contributors to financial stress for active-duty family respondents who indicated some financial stress are "unemployment and underemployment", "student loans", and "out-of-pocket relocation costs."
  • 77% of active-duty family respondents who have out-of-pocket housing costs spend more than $200 per month over their Basic Allowance for Housing allotment.
  • 20% of active-duty spouses are unemployed and actively seeking employment. 67% of employed active-duty spouses report they are underemployed.
  • 67% of active-duty spouses earned less than $20,000 in 2019, 40% earned no income at all in 2019.
  • 28% of active-duty family respondents report that "military pay" is one of their top five issues.
  • 14% of enlisted active-duty family respondents reported low or very low food security.

Education Opportunities

The GI Bill is not the only source for servicemembers to improve their education or job training. The Montgomery GI Bill, Reserve Educational Assistance and the National Call to Service are just some of the programs the government offers to active military, reserves, veterans and their families. More education should lead to more earning potential and fewer problems with debt.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


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