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USAA Personal Loan Review
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Written By
Updated on Wednesday, July 3, 2019
What is USAA?
USAA Bank, or the United Services Automobile Association, started in 1922 when a group of 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 over 12.8 million members and offers a wide range of financial services including banking, insurance, home mortgages and personal loans. USAA is based out of San Antonio, Texas, but its accounts are available nationwide.
USAA’s key mission is to provide financial services for military members, veterans and their family members. According to its mission statement, it aims to be the “provider of choice” for the military community. As a result of USAA’s dedication to serving military members and their families, 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
- Fast decision and payments: USAA makes an instant decision on most applications and funds the loan the day after approval. In most cases, you can have the funds to your USAA bank account within 24 hours after being approved, on business days Monday through Friday.
- 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 its 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 its service requirements. Read below to find a list of eligibility requirements.
- Online application process: Applying online is fast and convenient, and only takes a few minutes.
- Flexible loan terms: Personal loan terms vary from 12 to 48 months, with loan amounts from $2,500 to $50,000 or more, depending on your credit profile and score. USAA does specify that in order to qualify for the lowest rate loans or a loan for over 60 months, you must have excellent credit.
APR
6.99%
To
17.75%
Credit Req.
700
Minimum Credit Score
Terms
12 to 48
months
Origination Fee
Not specified
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
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Eligibility requirements
Applying for a USAA personal loan will show up as a hard pull on your credit report. In addition to other requirements, you must qualify for USAA membership under its 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. The membership application will ask for your personal information, such as contact information, your Social Security number and date of birth, along with other qualifying USAA membership questions. You will also 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. If you’re a non-U.S. citizen, you will have to submit a passport or permanent resident card as well.
Once you have a membership with USAA, you can sign into your online account to start the personal loan application process. You will also need to list your income and employer.
USAA states that its 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 within 24 hours if they’re being transferred to your USAA bank account, Monday through Friday.
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USAA consumer reviews
USAA has a B- rating from the Better Business Bureau (BBB) and is not officially accredited by the BBB. Based on an average of 417 customer reviews on the BBB’s website, USAA only has a 1.5 star rating and 1,356 customer complaints logged in the past three years, with 446 complaints closed in the past 12 months. USAA also had two official actions against it by the government, one for not properly honoring customers’ stop payment requests on preauthorized electronic fund transfers, and one for failing to implement and maintain a proper risk maintenance program, among other federal guidelines.
On LendingTree (Disclaimer: MagnifyMoney is owned by LendingTree), 35% of reviewers recommend USAA, which has an average rating of 2 out of 5 stars. USAA ranks highest in reviews for fees and closing costs. Many of the negative customer reviews have focused on USAA’s customer support, especially in the mortgage department, and how it has changed from a positive experience in the past, to less attentive at the present.
For instance, one review from March 2019 detailed a frustrating experience with a loan officer who was out of the office for more than a week: “Absolutely terrible customer service — a true disappointment being attached to a dependable name like USAA,” and another from May 2019 noted that long-time membership did not help him get the assistance he needed: “I got my mortgage through USAA. As a 14-year member, I thought this was a good option. Due to my experience with their customer service, I am taking all my business away from USAA…Avoid at all costs.”
On the flip side, one 2019 review praised USAA’s convenient options for a home mortgage: “I had been checking rates for months and had been approved and working with a different mortgage company who hadn’t locked me into a rate. The rate they gave me when I was ready to buy was stupid high. I was beside myself because I was supposed to close in six weeks. I ended up on the phone for hours checking around. USAA was the last place I called because I wasn’t even sure if they handled mortgages.
The young man I spoke to was so nice and patient with me. The rate he locked me into that evening was 0.5% lower than anyone else, and closing costs were great. He said it was going to take some work to close in six weeks but as long as I got everything in in a timely matter, it could be done.”
USAA FAQ
USAA membership is required in order to apply for a personal loan, but becoming a USAA member is free. You will also need a basic banking account with USAA in order to receive your loan funds, but the organization does offer free no-minimum and no service-fee banking accounts as well.
USAA offers secured and unsecured loans. Secured loans require some sort of collateral to get a lower interest rate, while unsecured loans do not require collateral and may have higher interest rates. Your collateral can also be seized if you are unable to pay back a secured loan.
You can also find auto and home loans, as well as motorcycle, boat and recreational vehicle loans. It does not offer debt consolidation loans, but do note that personal loans can be used for your own personal debt and may save you interest.
You can use a personal loan for almost any personal expense, such as home repairs or improvements, unplanned emergencies that may pop up in your life, remodels, or medical expenses. The only restriction for personal loans through USAA is that you cannot use a personal loan to finance any higher education.
If your credit score could use some improvement, you may not qualify for as high of a loan and your interest rate will most likely be much higher. For instance, with a credit score that “needs improvement,” USAA lists that its personal loan rates may be as high as 17.65%.
If you have a bank or credit union account somewhere else, you can still apply for a personal loan with USAA. You will still have to open a free membership account and apply for a banking account before you apply for a loan, however. Once you are approved, you can then transfer any existing funds into your USAA account as well.
If you utilize USAA’s bill payment option, for consumer loans that are more than 10 days past due, you are unable to make any payments on the principal of the loan until the loan is made current again.
You have to be logged into USAA’s membership site to get specific answers to your own financial situation, but in general, it’s always considered a good idea to speak to your lender as soon as possible if you anticipate a problem paying your bill. The lender may be able to work out a plan with you to help you stay on track and lessen the impact to your credit score.
Alternative personal loan options
LendingClub
APR
10.68%
To
35.89%
Credit Req.
Not specified
Terms
36 or 60
months
Origination Fee
2.00% - 6.00%
on LendingTree’s secure website
LendingClub is a great tool for borrowers that can offer competitive interest rates.... Read More
If you’d like to compare your options before applying for USAA, LendingClub is a solid alternative. It is a peer-to-peer lender. 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. It also charges an origination fee of 2.00% - 6.00% to set up your loan, a fee USAA does not charge.
OneMain Financial
APR
18.00%
To
35.99%
Credit Req.
Not specified
Terms
24 to 60
months
Origination Fee
1.00% - 10.00%
OneMain Financial offers quick turnaround times and you may get your money the same day... Read More
Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $400. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Florida: $8,000. Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. Texas: $8,000. West Virginia: $14,000. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
OneMain Financial could be a solid alternative option, especially if you need money quickly, because it approves and pay out loan funds within one day. It also accepts borrowers with fair credit and could be an option if you cannot qualify for a USAA loan. However, its interest rates are higher than USAA and the application process can’t be entirely completed online — you must go to a physical branch to complete the loan process.
LendingPoint
APR
15.49%
To
35.99%
Credit Req.
585
Minimum Credit Score
Terms
24 to 48
months
Origination Fee
0.00% - 6.00%
on LendingTree’s secure website
LendingPoint is an online lender that targets borrowers with fair credit, and allows borrowing up to $25,000.... Read More
LendingPoint offers medium-term loans through a quick online application. Its interest rates are relatively high, but funds could be distributed as early as the next business day. This lender also considers factors beyond your credit score to make a lending decision.
