Those who have served the nation in any capacity tend to receive government aid and assistance to help them financially. Not only can veterans use the money to sustain themselves, but they can also use it to ensure the well-being of their family members. These benefits are primarily offered by the Department of Veterans Affairs (VA). One of the key VA benefits is debt relief, which is monetary support offered via grants or other measures.
Financial assistance for veterans
Veteran loans and their types
Veterans can get certain loans backed by the federal government but issued by private (and generally non-profit) financial institutions and banks. These loans are available to active army personnel as well as veterans and their surviving spouses. These loans come with many advantages, like no down payment requirements (when buying an asset), relatively low repayment interest rates, no private mortgage insurance requirements, and no prepayment penalties.
These loans provide financial liquidity to help veterans address various costs and challenges, including homelessness, healthcare expenses, food insecurity, unemployment, educational fee requirements, disability and rehabilitation, and emergency monetary needs. That said, these loans come with a host of eligibility requirements. For instance, based on the length and date of military service, income level, disability, and the kind of assistance required, one might be eligible for a specific kind of loan. Here, learning about all the financial assistance measures can help veterans choose the most appropriate options for them.
- Cash-out refinance loans
These kinds of loans help those with mortgages to borrow against home equity to make home improvements, pay off debts, and fund educational programs. - Home purchase loans
Veterans can buy homes using these low-interest loans. Additionally, these loans do not require veterans to make down payments or get private mortgage insurance. - Interest rate reduction refinance loan
One of the key benefits of all loans created for veterans is low repayment interest rates. The interest rate reduction refinance loans (IRRRLs) take this a step further by making it possible to refinance existing VA loans to get lower interest rates. This is especially beneficial for homeowners with existing VA-approved debt, as it helps them refinance a fixed-rate loan at reduced interest rates or convert an adjustable-rate mortgage (ARM) into a fixed-rate mortgage. This speeds up the repayment process.
Veterans’ mortgage life insurance (VMLI)
This program is designed to serve the interests of veterans with disabilities. It provides full insurance coverage on home mortgages to veterans who receive specially adapted housing grants due to their military service-related disabilities. VMLI offers mortgage life insurance of up to $200,000.
Veterans student loan relief fund
The government also helps veterans ease the burden of repaying student loans. This is where the Public Service Loan Forgiveness (PSLF) program comes in. Along with other public service employees, it offers active-duty service members and veterans student loan relief funds. So, it either entirely erases student loans or relieves the repayment burden to an extent. Like other veteran relief loans, these, too, come with strict eligibility requirements. To qualify, one must have been in active military service for an established period, an eligibility condition that tends to change frequently. Alternatively, when applying for the loan, one should either be actively serving in the military or have been honorably discharged or let go because of a grievous injury or a disability caused directly due to their service.
To make a claim, one needs to submit proof of education as well as the money acquired via student loans to the VA. It is important to note that student loan repayments are not immediate. This is why, veterans eligible for this benefit must prepare themselves to pay for their education until the VA-approved assistance kicks in. Some of the loans that veterans can use for their educational endeavors are the Montgomery GI Bill and the Post-9/11 GI Bill.
Emergency relief loans for veterans
Veterans facing financial challenges can benefit from the Army Emergency Relief (AER). It is a series of financial assistance programs offering zero-interest loans and grants to veterans urgently needing monetary support. The emergency relief funds can help veterans and active-duty service members cover various expenses.
- Emergency travel costs
- Temporary lodging costs
- Mortgage, rent, and initial deposit
- Natural disaster preparation and evacuation
- Vehicle costs
- Funeral expenses
- Essential furniture
- Food costs
- Immigration and passport fees for dependents
- Dental care for dependents
- Spouse relicensing and recertification
- Emergency home repair costs
- Non-medical attendant travel
- Permanent change of station travel expenses
- Appliance costs
- Special needs healthcare equipment
These benefits are available to service members on active duty as well as members who retired due to longevity, healthcare reasons, or reaching the age of 60. They are also extended to eligible members’ dependents, which can be surviving spouses (who have not remarried) and children of service members who lost their lives while on duty or after reaching retirement eligibility.
Debt relief for veterans
The government offers veterans the option of debt consolidation, which reduces their monthly credit card repayment obligations and lowers loan interest rates. This program is designed to help current and past military service members deal with financial challenges. The Military Debt Consolidation Loan (MDCL) is a prominent veteran debt relief option. It has advantages like lower credit score requirements for loan approval, up to 100% loan-to-value, longer repayment terms, and lower debt-to-income requirements for eligible applicants.
