That is the key Raimius. If for whatever reason he separates that rate jumps to over 20%.
Our DS did not take the full loan,he took only 1Ok. He purchased his car on a 0% int loan. He placed 5k in an IRA and 5k in a money market mutual for him to set up his first place and Gforbid issues. Basically, but bc he got such a low car rate he did not take the full amount USAA offered. His thought was he would not carry any more debt than USAA offered at the low rate. His fear was if he washed out of UPT he didn't want to carry that credit burden.
He is an O2 now (class of 12 AFROTC). He has paid off his car and the 10k he borrowed early without ever feeling strapped. He is glad that he didn't take the entire amount because he will be pcsing to his 1st OP base as pilot with a 4 year assignment, and since it is paid off it will not be a factor in the amount of home he can qualify for regarding a mortgage.
Plus, unless things have changed when you PCS to your 1st OP base you can get 1 month Base pay at 0% repaid in 12 months. That means for him he will be able to drop another chunk into investments without truly feeling the pain financially.
the career starter loan is great, but if they don't think long term they can over extend very quickly. Let's be honest this repayment will be @750 a month. Credit wise that debt alone will be close to 20-25% of their net pay. If he wants to buy a home even via VA there are limits regarding debt ratio. If he has multiple credit cards he can quickly pass the ratio.
~ Another reason DS did not take the full amount was because he set up a monthly direct investment program, AF and USAA. He would have been strapped in his case.
OBTW if he has not opened an AMEX yet with USAA have him do it now. He can use it everyday and collect points to use for airline tickets. We always used our AMEX like a debit. Even paid our car off using AMEX. So if he is going to use the loan to pay off the car, have him look into see if the car loan provider will allow AMEX as a payment. If so, between the points awarded for opening an AMEX AND paying off the car he should be at a free airline ticket.
You will be amazed how you can squeak a nickel out of every penny!