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The men and women of our armed forces are truly American heroes. However, even heroes can find themselves in debt. There’s no worse thought than worrying about keeping up with debts and payments while you are serving your country. Additionally, debt and credit issues can cause complications for advancing your military career.

Therefore, there’s never been a greater interest in debt and credit options for veterans and service members than there is in the present. We’ve put together some information on how debt can affect your military career, and what options are available to the military and veterans when it comes to resolving their debt.

Debt and Security Clearance

The biggest way that debt can affect your military career is that it can affect your ability to get a security clearance. Just like other standards for service members, like restrictions on drugs, alcohol, and credit, the Uniform Code of Military Justice explains that service members who fail to pay their bills bring discredit upon the armed forces.

This violation of the Uniform Code means that servicemembers can lose their security clearance. This can hurt your chances for promotion and even bring about a court martial.

Moreover, outstanding debts present a security risk. A person with unmanageable debts or other serious financial trouble is an easier target for bribery, corruption, and espionage. Therefore, appropriate debt management is vital to anyone looking to advance their career in the military and get a better rank, most important postings, or play a larger role in operations and management.

Military and Veteran Debt Consolidation Options

Fortunately, there are several options open to service members and vets to help deal with any debt they may have accumulated. Most of the products center around providing you with a lower interest rate to help lower the total amount that you pay for your debt, as well as lowering your monthly payments. You can use the money you save on monthly payments to repay your debts even faster, save it for a rainy day, or use it to make ends meet.

Banks, credit unions, and online lenders are all potential sources of debt consolidation for vets and active-service members. These institutions usually offer personal loans designed to help consolidate your debt into one easy payment. Moreover, these loans frequently offer lower interest rates than you’re currently paying, especially if you have a lot of credit card debt, as credit card debt usually has the highest interest rates.

Service members also have some help from the government. Laws and regulations cap the interest rate for personal loans to military members at 36%. Additionally, the Service Members Civil Relief Act offers a number of protections for active duty service members, including:

  • Eviction protection unless your rent is higher than a fixed amount that adjusts every year
  • Stop foreclosures on homes while you are on active service
  • Prevents your car or vehicle from being repossessed without a court order if you made a deposit or made at least one payment before your joined the armed services
  • Stops you from being taken to court for civil proceedings, including divorce and child support hearings
  • Prevents storage facility owners from auctioning your property for overdue rent without a court order

Additionally, there are other financial benefits you can get from the SCRA, including:

  • The ability to cancel your current cell phone contract if you relocate for 90 days or more to a location your current provider doesn’t cover
  • Allows you to end a vehicle lease you agreed to before joining of certain conditions are met
  • Allows you to end a house lease or rental contract without penalty if you deploy for 90 days or more
  • Limits interest on all loans taken before you joined the military to 6%. This includes auto loans, mortgages, student loans, and credit cards

Moreover, using the benefits provided to you by the SCRA won’t reflect on your credit report, so your credit score won’t go down for prematurely ending a lease or for missing or being late on payments.

In addition to specialized protections, there are several lending institutions that focus on providing financial services to members of the armed services. These banks and credit unions understand the unique pressures that face today’s military members, and adjust their policies accordingly. As a result, they are the best place to look for things like debt consolidation loans or other financial products.

Several general-use commercial banks and credit unions also offer specialized programs targeted at the armed forces, so make sure to explore these options as well. These sorts of programs frequently offer lower interest rates, better repayment terms, flexibility, and other advantages for vets and service members.

It’s important to note that you should do research and make sure you understand the terms of any loan you take out. Service members are no doubt familiar with the rash of payday lending operations that tend to spring up outside a military base. These lenders usually charge much higher interest rates and use hidden fees and charges to make the amount you’ll pay for your loan much higher than if you use another option, like a debt consolidation loan from a bank, credit union, or online lender.

Debt Counseling for Service Members

If you don’t’ want to take out another loan, but are struggling with your debts, then another option that’s available to military vets and service members is debt counseling services. These services are frequently run by nonprofit organizations. They offer advice and help you make a plan to get your debt under control. Debt counseling organizations can help you understand if a particular financial product is in your best interest, and can recommend different ways to approach financial products so that you get the best possible results for your situation. Moreover, they offer credit and debt education so you can understand the different way that credit and debt products work, making you an informed consumer.


No matter what you choose to do to resolve your debt, it’s always a good idea to do something. Failure to keep your debts under control can stymie your career or cost you your security clearance.