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UPDATE 8 February 2020: I have received multiple reports that American Express no longer offers this deal to military servicemembers. This is basically confirmed by multiple data points as of February 2020.
If you open an acccount before active duty, SCRA will apply and the interest rate MAY be lowered to below 6%. Otherwise, if you open an account during active duty, AMEX will apply Military Lending Act (MLA) rules and will not waive the interest on the loan.
For now, my recommendation is you DO NOT apply for this loan if you are expecting 0% interest. AMEX is no longer reducing the interest on this loan if you are on active duty when you apply for the loan.
American Express offers a $3500 to $40,000 personal loan to active duty US military servicemembers with 0% interest for up to 3 years.
The interest rate is initially set at whatever rate your credit score qualifies you for. However, after you apply for Servicemember Civil Relief Act (SCRA) benefits to be applied to your AMEX loan, the interest rate drops to 0%.
You must be an American Express Card Member before you are eligible for the loan. If you are a military servicemember with good to excellent credit, I recommend the Platinum Card from American Express (learn how to apply for my top recommended card here).
The AMEX Platinum is my top recommended card because:
- Annual fee of $550 is waived for US military
- 60,000 point welcome bonus offer
- $200 annual Uber Credit
- $200 annual airline fee credit
- Centurion and Priority Pass lounge access for free
You can learn more about AMEX SCRA benefits on credit cards, including how to get your annual fees waived on all AMEX cards.
How to Get the Military AMEX Personal Loan
Go to AMEX website and click the box in the upper right hand corner to “Check Your Rate.” If you already have an AMEX account, you'll be asked to login and then your rate and loan amount will be presented to you. I was only offered $25,000 at 8.98% interest, but many troops are offered the full $40,000 amount.
The offer is pre-approved so there is no impact to your credit score to apply. There may be an small effect (positive or negative) to your credit score if you take the loan out, as AMEX will report it to the credit bureaus.
AMEX distributes the funds to your bank account within 3-5 business days after you apply. You can also have the loan amount directly post to any credit cards you need to pay off. This is a great way to consolidate your debt and stop being in debt.
As soon as you receive confirmation that your application was successful, call the American Express Military Hotline for SCRA Personal Loans at 1-800-253-1720 or 1-336-393-1111.
Ask for your loan to be reviewed for SCRA military benefits. Be polite and courteous! They may take a few days to review your account and then send you an email.
AMEX Personal Loan for Military SCRA Waived
I've received two data points now about the interest free AMEX personal loans for active duty. Here's what my buddy Dan messaged me in October 2018:
A friend clued me into this, and it worked: Just got a $40k personal loan from Amex, originally for 5.98% interest (36 months). Applied for SCRA benefits (I’m active duty military) on another Amex product (new SPG Luxury) and got this msg from Amex today:
To support the men and women who serve in the United States Armed Forces, we are handling your loan referenced above in accordance with the Servicemembers Civil Relief Act (“SCRA”).
The SCRA provides for a maximum annual interest rate of 6% per year on loans you received before starting active military duty. However, at this time we have chosen to reduce the interest rate on your SCRA eligible balance to an Annual Percentage Rate (APR) of 0.00%.
We have issued credit for the full amount of applicable interest charges and fees to your loan account. This amount will appear as a credit(s) on your loan invoice. The total interest charges and fees you have already paid will be returned to you in the form of a check under separate cover. The check amount will appear as a debit on your loan invoice and will be offset by our credit(s). In addition, we will waive any future late payment and returned payment fees for the duration of your active military duty.
Beginning with your next loan invoice and thereafter, your new Monthly Payment will be $1111.11. We have also adjusted any monthly payment(s) previously billed but not yet paid, to reflect the new Monthly Payment amount.
If you are currently enrolled in AutoPay for this loan, your future AutoPay amount will reflect the new monthly payment amount above and no additional action is required.
If there are any additional accounts you would like to be reviewed for SCRA relief, please call us at 1-800-253-1720. If you are outside the United States, please call us collect at 1-336-393-1111. We are grateful for the service and devotion you have shown to our country.
Sincerely, American Express Customer Care
The other data point I have is from a guy at work buying stocks on margin using personal loans. Don't be that guy. However, he also had a 0% interest rate loan after applying SCRA benefits. He set up himself up to lose his shirt and $100,000+ during the next down turn.
|Pre-Approved Loan Amount||Monthly Payment at 0% Interest|
What To Do With a No Interest Military AMEX Loan
While taking on dumb debt is never a good idea, a 0% interest loan paid back over 3 years presents some interesting opportunities. This is definitely a better deal than a payday loan or even the USAA Career Starter Loan.
At 0% for 3 years, you have a few options:
- Pay off your student loans
- Pay off USAA Career Starter Loan
- Pay off credit card debt
- Buy 2% Certificates of Deposit (CDs) (arbitrage)
- Home renovation
- Max out your SDP if you are deployed
- Pre-pay your mortgage
The AMEX Personal Loan is an amazing opportunity to get yourself out of debt without accruing additional interest along the way. This is a rare opportunity to out yourself in a better position 3 years from now than you are today.
If you are on the path to financial independence (FI), your debt is an emergency. You need to pay it off ASAP and start investing in appreciating assets that can eventually replace your active income with passive income. The sooner you get out of debt, the closer you are to FI.
I'm sure there are some other ideas I'm not thinking of. Let me know in the comments how you would use $40,000 at 0% interest!
AMEX 0% Loan Military Frequently Asked Questions
No, not any more after Jan 2020. AMEX changed the way they implement the SCRA and MLA laws. If you open a personal loan while on active duty, do not expect AMEX to lower the interest rate to 0%.