Loans and Debt Relief
Loans and Debt Relief
As a member of the National Guard, you may be entitled to loans to assist you in managing your financial resources. In addition, programs exist that provide debt relief while you are deployed. Loans are also available for employers who are impacted by employee deployments (Military Reservist Loans).
Click on a link below to learn more about loan privileges and debt relief:
Veterans Affairs Home Loan Guaranty
Student Aid and Loan Assistance Information
Military Reservist Economic Injury Disaster Loan (low interest business loans)
Civil Relief Act: Economic and Legal Protection for Active Duty Military
Small Business Administration Assistance for Guard Members and Reservists
Veteran’s Small Business Resource Guide
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Veterans Affairs Home Loan Guaranty
The Department of Veterans Affairs (VA) offers loan privileges to service members, veterans, members of the National guard, and unmarried surviving spouses for the purchase or refinancing of homes, condominiums, and manufactured homes. The VA guarantees part of the total loan, permitting the purchaser to obtain a mortgage with a competitive interest rate. With a VA home loan guaranty, the lender is protected against loss up to the amount of the guaranty if the lender fails to repay the loan. The amount of the guaranty available to an eligible veteran, called an entitlement, is the down payment; an entitlement of up to $60,000 may be available to veterans purchasing homes financed with a loan of more than $144,000. More details are available at www.va.gov.
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Student Aid and Loan Assistance
Federal regulations require lenders to postpone the student loan payments of National Guard members called to active duty. Also, colleges are encouraged to grant such personnel either full refunds of tuition and other institutional charges or credit against future charges. See the Education section for details about educational assistance programs available to Guard members and their families.
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Military Reservist Economic Injury Disaster Loan (Low-Interest Loans for Businesses)
Small businesses may apply for loans from the Small Business Administration (SBA) if they have been financially affected by the loss of essential employees who have been called to active duty. For the past two years, the Military Reservist Economic Injury Disaster Loan (MREIDL) program has provided loans to eligible small businesses to cover operating costs that cannot be met after key employees are called to active duty. Loans up to $1.5 million for a maximum of 30 years are available at an interest rate not to exceed 4 percent. MREIDL guidelines and loan applications can be downloaded from the SBA Web site.
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Servicemembers Civil Relief Act: Economic and Legal Protection for Active Duty Military
The Servicemembers Civil Relief Act (SCRA) was designed to ease economic and legal burdens on active-duty military personnel. The SCRA most frequently benefits recently activated Reservists and Guard members whose income is less than their pre-service income. SCRA advises all lenders to reduce rates on consumer loans and mortgages to no more than 6 percent for all service members on active duty. This applies to any debts incurred before beginning active duty and includes interest on credit cards, auto loans, and certain other loans. (However, it does not apply to interest on federal student loans.) The SCRA also protects your family members from eviction during active-duty service, regardless of whether a lease was signed before or after activation. It also allows military renters to terminate leases without penalty if doing so is in their own interests. Finally, it prohibits creditors and insurance companies from making adverse credit reports, denying credit, or taking adverse financial action against a member based solely on invocation of the act.
Notify your creditors of your active-duty status and your intent to invoke your civil relief act rights.
Eligibility criteria include:
- Loan obtained when member was not on active duty
- Account’s interest rate is currently above 6%
- Active-duty service must have adversely affected member’s ability to repay the loan at the pre-service interest rate (generally means the member made more money as a civilian before active-duty service)
- Member notifies the lender and provides copy of active-duty orders
Read about the Servicemembers Civil Relief Act online.
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Small Business Administration Assistance for Guard Members and Reservists
If you are a Guard member or Reservist with a direct or guaranteed loan from the U.S. Small Business Administration (SBA), you may be eligible for loan repayment deferrals, interest rate reductions, and other credit/financial assistance. Contact your SBA Veterans Business Development Officer for more information. In addition, the SBA has developed a resource guide for small business owners returning from active duty in the Guard or Reserve. This booklet provides tools, planning resources, and vital information to help you reestablish your small business. Visit the SBA’s Assistance for National Guard and Reserve Members page for additional resources.
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Veteran’s Small Business Resource Guide |  |
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Note: To open the document, click on the PDF link. To save the PDF files to your hard drive, right click on the link and choose “Save Target As”.