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Everything to Know about Taking a Military Personal Loan


Like many members of the military community, you may be facing significant challenges, such as childcare concerns, spouse income insecurity, and frequent PCS moves. With these challenges come unexpected expenses and the need to find affordable solutions that can cover costs now, without creating unmanageable debt in the future.

Many AAFMAA Members are taking advantage of our $5,000 CAP Loan at 1.5% interest to cover their expenses at this time. If you’re a servicemember in ranks E-5 to O4, this could be the right solution for you, too. You get five years to pay it back and there’s no credit check, no collateral required, and no penalty for prepayment.

How to Decide If You Should Take a Military Personal Loan

Is now the right time to take out a CAP Loan from AAFMAA? We’ve pulled together 5 must-know tips to help you decide:

1. Assess your income versus your current expenses

As an active servicemember, your military pay is reliable. But if your military family also depends on income from your spouse, changes due to job loss or the need to reduce working hours to care for children or elderly parents may lead you to consider other ways to stay financially secure.

It can be tempting to apply for a loan right away, but if you do the math first, you’ll be able to see how much your household is really bringing in. You may find that you can still cover your monthly bills with what you have, especially if you spend less money on discretionary things— such as going to the movies and eating out.

2. Check your current loans

Think about how you’d really want to spend your AAFMAA CAP Loan. For instance, you might consider using it to pay off other loans with a higher interest rate, such as personal loans, credit cards, and car loans. They usually have interest rates that are at least double the CAP rate or more. Consolidating your debt into AAFMAA’s CAP Loan at a rate of just 1.5% could potentially save you a lot of money in interest down the line.

3. Calculate your upcoming expenses

Make sure you understand how much money you truly need before taking out a loan. Add up your regular expenses, such as mortgage payments, utilities, car payments, and grocery bills, to get a realistic idea of your expenses. It wouldn’t make sense to take out a five-figure loan if you only need a few thousand dollars — you may end up owing more than you can repay. That makes AAFMAA’s $5,000 CAP Loan option the perfect amount to help cover your necessities in the short run.

4. Don’t look too far ahead

The future always includes some element of uncertainty. Do your best to focus on the “now” and only spend on what is necessary. This will help prevent you from incurring debt that could be difficult to pay off down the road, should your financial circumstances change. For instance, if you were planning on buying a new car or going on an extravagant vacation, it may be a good idea to hold off on putting any money down until you have a better sense of what the future holds.

Instead, focus on affording what you need now and covering unavoidable future expenses. An AAFMAA CAP Loan can help you cover these necessary costs now without paying high amounts of interest or getting progressively deeper into debt.

5. Know your lender

Many banks offer low-interest loans to attract customers they hope to keep for life through other products. However, not every institution understands the unique needs of the military lifestyle and they may not be able to grow with you and your career. AAFMAA provides products designed exclusively for the military community. Once you become an AAFMAA Member, you can feel confident in knowing that no matter what life holds — from changes in duty stations to deployments to growing your family and saving for retirement — AAFMAA is dedicated to helping you thrive. Start feeling confident in your financial future today. Apply for your AAFMAA CAP Loan today and start breathing a little easier right away.