Capital Gains is a thing right? Oh and Credit too.

Honestly USAA or NFCU... and why?

  • USAA

  • NFCU

  • Niether, I got a better place for you!

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So...I know the interest rate is crazy low but does it accrue from the time they take the loan or from the time they commission? And can they wait until they are ready to graduated to take it?
From what I read its accrued but deferred until 12 or 6 months after commissioning.
Happy Easter 2018!

Currently, according to their sites, USAA offers up to $25,000 at 2.99% APR, and NFCU offers up to $32,000 at 1.25% APR (higher max with less than half USAA’s rate)!

Disclaimer: not a CPA or had any formal financial education.

Hope these links works. With interest rates on the rise, I expect these rates to go up in the future.

USAA usually offers the lower loan rate. See why below. The USAA rate above is the ROTC, OCS and direct commission program rate.

If you look at the links above, it’s clear one is “ROTC” and one “academy.” Apple and orange.

There are two separate Career Starter loan program rates.

The ROTC loan rate differs from SA loan rate because of shorter payback period coinciding with obligated service period differences.

The 2.99 APR and the lower loan amount is the ROTC deal. USAA and NFCU have generally been $30k+ at much lower interest rate, for the SA deal. The rates have not changed too much over the years, as both USAA and NFCU do these loans at a loss to create lifelong customer relationships.

USAA’s loan rate for each year is usually announced in Sep-Oct. NFCU often puts its SA loan rate out there in June, right after the new 2/c have classed up. I expect it will be $30k+ at .75–1.50% APR. I don’t know whether NFCU makes its loan available to the other officer programs, or if there is a rate difference.
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From what I read its accrued but deferred until 12 or 6 months after commissioning.

Graduate in May. Payments start August.
You can take the loan from when it is announced at your SA, up to 1 year after commissioning. To the best of my knowledge.
(I worked for USAA until 2 years ago.)
Five suggestions:
  1. Have your parents put you on their oldest credit card account as an additional card holder (assuming they have good credit). You will then benefit from the length and quality of their credit history - the payment history of that card will appear on your credit report and increase your credit score. You do not need to use the additional card or even take possession it.
  2. Once you are at the academy apply for a USAA Visa cash rewards credit card (or NFCU equivalent). No need to go the secured route unless there is a problem with credit history. Not sure, but you may be able to apply before reporting (ask USAA).
  3. Apply for American Express Platinum Card when you are eligible (not sure of age requirement, but think 18 or 19). $550 annual fee waived for active duty military and travel benefits are unbeatable at that price.
  4. Consider investing in a Roth IRA. Once you start getting a paycheck, you are eligible. You can convert it to a traditional IRA later when you start earning the big bucks. ;)
  5. Be very, very responsible (sounds like you are). Credit cards can get an immature person in trouble real fast.

I did talk to USAA and they have a Cadet/MIDN specific credit card that I was able to apply for. All you need is Permit to Report. It’s a $2500 limit at 4.5% plus prime. No annual fee and it’s a signature card! It only appears on their website when you have your USAA title officially changed to MIDN or Cadet. Once you do some of their website changes to be tailored to you.

I’ve had it for 2 months now and have to say I am doing well. I also now use USAA for life insurance (sgli was a rip off for the price. USAA is half of sgli and even includes the traumatic injury protection and sticks when you leave military) and property insurance in my dorm for only $63 a year. (Also an academy special is over half off the normal premium plus the issue laptop and class ring covered for $100 deductible, usually costs extra)

Thank you all for help and advice on how to get set. Now I have a good foundation for the years to come!