Business

USAA Personal Loan Review

Posted August 15, 2018 9:06 a.m. EDT
Updated August 18, 2018 6:00 p.m. EDT

What is USAA?

USAA Bank, or the United Services Automobile Association, started in 1922 when 25 Army officers decided to pool resources and insure each other’s vehicles. From this humble beginning, USAA expanded into a Fortune 500 company that serves nearly 12 million members and offers a wide range of financial services including banking, insurance and personal loans. They are based out of San Antonio, Texas, but their accounts are available nationwide.

USAA’s key mission is to provide financial services for military members, veterans and their family members. As a result, not everyone is eligible to apply for a USAA personal loan. In this review, we look at USAA personal loan eligibility requirements and how they compare with other personal loans available today.

USAA personal loan highlights

Taking out a loan with USAA comes with many perks, such as their excellent customer service and programs and assistance offered to customers. Below are a few highlights of USAA personal loans:

  • Fast decision and payments – USAA makes an instant decision on most applications and funds the loan the day after approval.
  • No application, origination or prepayment penalties – You don’t pay anything to apply for or to receive a loan started with USAA. There is also no penalty for paying the money back ahead of schedule.
  • Competitive interest rates – USAA offers competitive interest rates on their personal loans, especially for applicants with excellent credit scores.
  • Only available for servicemembers and their families — Not everyone can take out a USAA personal loan. You must qualify for a USAA membership by meeting their service requirements. Read below to find a list of eligibility requirements.
APR 8.99%To10.99%Credit Req.700

Minimum Credit Score

Terms12 to 84

months

Origination FeeNo origination fee

APPLY NOW Secured

on USAA Bank’s secure website

USAA offers personal loans for members with low, fixed interest and protections to fall back on if you get behind in payments.... Read More To qualify for this loan and other banking products at USAA, you must be military- or federal government-affiliated. Loan amounts start at $2,500. Repayment terms are between 12 and 84 months. There are no application fees, and you can get your funds as early as the next day.Read Less

USAA personal loan details

USAA loan terms range from 12 to 84 months; however, longer terms are not available for smaller loans. Loan amounts range from $2,500 to more than $20,000 with APR ranging from 8.99% to 10.99%, and funds are available the next day after you qualify.

USAA personal loans have no origination or prepayment fees, although they do charge a late fee of 5% of the total amount due.

[Chart-USAAPersonalLoanDetails]

Fees and penalties

  • Terms: 12 to 84 months
  • APR Range: 8.99% to 10.99%
  • Loan amounts: $2,500 to $20,000
  • Time to funding: Day after approval
  • Soft-pull/hard-pull: Hard Pull
  • Origination fee: None.
  • Prepayment fee: None.
  • Late payment fee: 5% of the amount due
[/Chart-USAAPersonalLoanDetails]

Eligibility requirements

Applying for a USAA personal loan will show up as a hard pull on your credit report. USAA does not have a minimum credit score requirement or debt-to-income cap, but will consider your credit score as part of their lending decision.

In addition to the financial requirements, you must also qualify for USAA membership under their military service requirements. You are eligible if you are in the following categories:

  • Active military: You are currently serving in the U.S. Air Force, Army, Coast Guard, Marines or Navy.
  • Former military: If you have retired or separated from the military with an honorable discharge.
  • Family members of servicemembers: If you are the child, spouse, widow, widower, or unmarried former spouse of a USAA member.
  • Cadets and midshipmen: Cadets and midshipmen at U.S. service academies or involved in ROTC and officer candidates with 24 months of commissioning are eligible for membership.

Apply for a personal loan with USAA

Before you can apply for a USAA personal loan, first you’ll need to set up your USAA membership online or by phone. The membership application will ask for your personal information, along with other qualifying USAA membership questions. You will need to submit documents to verify your status, like a discharge certificate, your military orders (if you’re actively serving) or the name of a family member who is also a member, so USAA can look up their account.

Once you have a membership with USAA, you can sign into your online account to start the personal loan application process. The loan application will ask for your name, address and will use your Social Security number to check your credit report. You will also need to list your income and employer.

USAA states that their online personal application makes an instant decision in most cases; however, applicants will be alerted at the end of this if additional time or documents are necessary.

If USAA approves the loan, the funds will be available the next day, or it can be immediately deposited into your USAA bank account. If you don’t have a USAA account, they will send you a check, as they do not support the option of direct depositing the loan in a bank account at another bank.

Pros and cons

Like all lending products, there are both pros and cons to a particular loan product.

[Chat-USAAProsAndConsDetails]

Pros:

Cons:

  • Quick application and decision – The online application takes a few minutes, and in most cases, provides an immediate loan decision.
  • Fast payment – USAA makes the loan funds available one day after the loan is approved.
  • Competitive interest rate with autopay discount – USAA personal loan interest rates are competitive to other personal loans, especially if you have excellent credit. They also offer a 0.25% rate discount if you set up recurring, automatic payments for the loan.
  • No prepayment, origination or application fees — You do not pay anything to apply for a USAA personal loan. There is also no penalty for paying the money back ahead of schedule.
  • Only available for those who meet USAA membership requirements – Not everyone can bank at USAA. You must quality for USAA membership through your own military service or by being the child or a former or current spouse of a USAA member.
  • Hard Pull on your credit – A hard pull will show up on your credit report when you apply for a personal loan with USAA. A hard credit pull is used to determine your financial risk and loan rate.
  • No direct deposit for non-USAA bank accounts – Loan funds will be sent in the form of a check if you don’t have a bank account with USAA.
[/Chat-USAAProsAndConsDetails]

Alternatives to a USAA personal loan

If you meet the USAA membership requirements, their personal loan could be a solid choice. USAA offers competitive interest rates especially for applicants with excellent credit scores. They don’t charge application or origination fees, so you can set up a personal loan without paying anything besides the interest. Funds are usually available by the next business day, an important feature for someone who needs fast cash.

If you want a long-term personal loan, USAA’s terms go all the way up to 84 months, provided you borrow at least $20,000 —you won’t see terms of this length with many lenders.

If you don’t meet the eligibility requirements to be a USAA member, consider the following three alternatives for a personal loan:

[LendingClubPL]LendingClub[/LendingClubPL]

APR 6.16%To35.89%Credit Req.600

Minimum Credit Score

Terms36 or 60

months

Origination Fee1.00% - 6.00%

LEARN MORE Secured

on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.... Read More The loan application process is done online and only takes a few minutes to complete without hurting your credit. The loan processing time can take a while and you might not get approved if you have missed payments in the past.Read Less

If you’d like to compare your options before applying for USAA, LendingClub is a solid alternative. They use a peer-to-peer system where you submit your financial information online and get matched with a financial institution that can fund your loan. If you have strong credit and high income, you may qualify for an even lower interest rate through LendingClub; however, it takes about seven days to fund your loan.They also charge an origination fee of 1.00% - 6.00% to set up your loan, a fee USAA does not charge.

[OneMainFinancialPL]OneMain Financial[/OneMainFinancialPL]

APR 16.05%To35.99%Credit Req.Varies

Minimum Credit Score

Terms24 to 60

months

Origination FeeVaries

APPLY NOW Secured

on OneMain Financial’s secure website

If you have a credit score below 600, OneMain Financial is one of the few lenders that you can use to get a personal loan.... Read More They offer quick turnaround times and you may get your money the same day if you apply before noon with check or prepaid debit card option. ACH transfers take one to two business days. Interest rates are higher than other online lenders, especially for those with excellent credit, and you will need to visit a branch to get your loan.Read Less

OneMain Financial could be a solid alternative option, especially if you need money quickly, because they approve and pay out loan funds within one day. They also accept borrowers with fair credit and could be an option if you cannot qualify for a USAA loan. However, their interest rates are higher than USAA and the application process can’t be entirely completed online— you must go to a physical branch to close your loan.

[LendingPointPL]LendingPoint[/LendingPointPL]

APR 15.49%To35.99%Credit Req.585

Minimum Credit Score

Terms24 to 48

months

Origination FeeFee Varies

LEARN MORE Secured

on LendingTree’s secure website

LendingPoint offers personal loans for a wide variety of reasons, including paying for home repairs, consolidating credit card debt, or to make a large purchase. Their online process can help you to quickly apply for a personal loan, get qualified, and receive funding. While their interest rates can be higher than others, they do offer fast approval and can transfer funds to your bank account in 24 hours.

LendingPoint offers medium-term loans through a quick online application. Their personal loans only last between 24 to 60 months, so they don’t offer as many options as USAA. Their interest rates are relatively high, but funds could be received within two days, as early as the next business day, and look at factors beyond your credit score to make a lending decision.

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