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Career Starter Loan

- As of August 2020 -

What is a Career Starter Loan?

As you near graduation, many financial institutions are likely to reach out with a variety of loan offers. USAA and Navy Federal Credit Union (NFCU) offer 'Career Starter Loans' to newly commissioned officers. The loans offer a low-interest opportunity to build wealth and pay off higher debts. Loans typically range between $25,000 and $35,000 at interest rates at or below 2.99%. Overall, career starter loans have exclusive benefits and can open up a variety of spending and/or savings options for commissioning active duty service members just starting out in their military careers and looking to invest in their families and future.

Who can apply for a Career Starter Loan?

Career Starter Loans are available to qualifying cadets, midshipmen, and newly commissioned officers in eligible service Academy, ROTC and OCS/OTS programs entering active duty military service. Financial institutions, such as USAA and NFCU, may reach out to you, but if you are sincerely interested you should contact them directly. For both USAA & NFCU, you have to become a member of the institution, open a checking account, and link your paycheck to that account .


What are the advantages/best uses?

Career Starter Loans can save newly commissioned officers thousands of dollars in savings off interest rates when compared to traditional loan rates at 6% and higher. There is no collateral required to secure a Career Starter Loan, since they know you have 'job security' with the federal government for at least 4 years.  The loans can be a valuable way to paid down higher interest student loan debt, high interest credit card debt, purchase a reliable car, or to kick start your retirement investing in a Roth IRA or TSP account. Career Starter Loans can also be a great source of income to help buy uniforms or pay for other start-up costs and living expenses. There is no limit to what you can use the money for, but always be credit wise and know the risks associated with borrowing any amount of money.


What are the risks?

As with any loan, you have to be certain you only borrow as much as you need and can realistically pay back within the allotted 5 years without getting deeper into debt.  Remember, your career opportunities and security clearances are partially dependent on your credit health.  So you want to be sure to stay within your budget in order to grow your financial assets and investments without over-extending yourself and increasing your debt-to-income ratio.



USAA offers a Career Starter Loan to cadets/midshipmen commissioning through the Army, Air Force, and Naval Academy, ROTC, and Officer Candidate/Officer Training School (OCS/OTS) programs.  Traditionally, ROTC and OTS candidates within 12 months of commissioning may borrow up to $25K at a 2.99% annual percentage rate (APR), and Academy graduates at the .5% rate up to $35K.  Borrowers have up to 5 years to repay the loan, and can defer the first payment until 6 months after commissioning.  There are no penalties for early payoff. For more information on applying for USAA’s Career Starter Loan, visit the USAA website or call their Career Starter Dept. directly at 1-800-531-4610.


Navy Federal Credit Union (NFCU)

NFCU’s Career Kickoff Loan offers academy cadets and midshipmen (Not for ROTC/OTS graduates) a 60-month loan of up to $32,000 at 1.25% APR. With this loan, you can defer payments until 90 days after your commissioning and it also has a 5 year payback period.


Navy Federal also offers an exclusive ROTC/Delayed Entry Program (DEP) that gives juniors and seniors in ROTC or DEP access to many of the same membership benefits and career starter services that apply to active duty service members. For more information on applying to NFCU’s Career Kickoff Loan or ROTC/DEP offer, visit the NFCU website or call 1-888-842-6328.


Other Military Financial Institutions to Consider

While these financial institutions may not offer exclusive Career Starter Loans, they do provide a wide variety of benefits and services exclusive to our military who take advantage of their membership and banking services.

Additional Financial Resources

Military Scholarships and Grants are offered to military and their dependents from a wide range of companies and associations. Scholarships and grants are terrific alternatives to taking out Career Starter Loans because they do not have to be repaid and serve a greater portion of the military community.

Servicemembers Civil Relief Act (SCRA) was established by the federal government in 2003 and designed to ease the financial burdens on military members while serving on active duty and being away from home. The law affords active duty military, reservists, and members of the National Guard a range of legal protections relating to financial or civil obligations that are not available to the general public. Benefits to the SCRA include a 6% cap on interest rates, termination of leases, protection from eviction, and low to no interest charges and fees on credit accounts opened prior to the start of active duty service.


Military Lending Act (MLA) is a government law enacted to protect active duty service members, including those on active Guard and active Reservist duty, and their covered dependent from unfair predatory lending practices. In contrast to the SCRA’s protections on debt acquired before service, the MLA protects debts taken out during service. Benefits of the MLA include capping interest rates at 36%, prohibiting the inclusion of mandatory arbitration clauses or waivers of legal rights in borrowing agreements, and limiting charges imposed for fees, credit insurance, or other credit-related products sold as part of the transaction. The MLA covers most consumer loan products, payday loans, vehicle title loans, and overdraft lines of credit, but excludes mortgages, mortgage refinancing loans, home equity lines of credit, and vehicle purchase loans.

*Written in Coordination with Tamara, Navy Veteran Spouse*

Comparing Military Starter Loans Infographic
Comparing Military Career Starter Loans (USAA vs NFCU) Infographic

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