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 What is a Career Starter Loan?

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Who can apply for a Career Starter Loan?

Career Starter Loans are available to qualifying cadets, midshipmen, and newly commissioned officers in eligible ROTC and OCS/OTS programs entering active duty service in the Army, Air Force, Navy, Marine Corps, and Coast Guard. Financial institutions, such as USAA and NFCU, will begin to reach out to you during your junior or senior year about applying for their loan options. You have to become a member at one of the military banks or credit unions that offer career starter loans and apply directly through those financial institutions in order to take advantage of these low-interest loans.


What are the advantages/best uses?

Career Starter Loans can save new or soon-to-be commissioned officers thousands of dollars in savings off interest rates when compared to regular loans where rates are generally 6% and higher. There is no collateral required to secure a Career Starter Loan, and they can be a valuable way to pay off student loan debt, pay off high interest credit card debt, purchase a reliable, used car, or invest in opening a Roth IRA or TSP savings 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. 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 Navy/Marine Corps Academy, ROTC, and Officer Cadet/Training School (OCS/OTS) programs. Newly commissioned officers qualify to borrow between $25K and $35K at an interest rate of 0.5%-2.99%.  Traditionally, ROTC and OTS candidates within 12 months of graduation/commissioning may borrow up to $25K at 2.99% interest rate, and Academy graduates at the .5% rate for $35K.  Borrowers have up to 5 years to repay the loan, you can defer the first payment until 6 months after commissioning, and there are no penalties for early payoff. For more information on applying for USAA’s Career Starter Loan, 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 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 set up automatic loan payments from your active duty checking account. Navy Federal also offers the at 0% intro APR to cadets and midshipmen, as well as an exclusive ROTC/DEP offer that gives juniors and seniors who are ROTC cadets in eligible college programs or recruits in the Delayed Entry Program access to 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, visit the website link above 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 and Credit Alternatives and Resources for

US Service Members


Army Air Force Mutual Aid Association Career Assistance Program (CAP) offers a $5,000 personal loan at 1.5% interest and is available for all active duty, guard, and reservists ranked E5 and above to help cover career related financial expenses (including college funding and bill pay) with no extra charges, fees, or penalties for early repayment. CAP is funded in conjunction with the Armed Forces Bank and provides a lower risk alternative to taking out larger loans at higher interest rates, but you must become a member of AAFMAA and purchase a life insurance policy through the association in order to be eligible to participate in their CAP program.


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*

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