These are my top recommended credit cards for this month. Some have $450-550 annual fees waived exclusively for US military personnel.

The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

Make sure you check out How I Used my USAA Loan after you read this! Also, I've almost paid off the loan two years early!

It depends. The 2012 interest rate is 2.99%, which is the same as was offered in 2008. In 2009, the rate jumped to around 5%. Prior to 2008 the rate was as low as 1-2%. The loan is usually offered at $25,000, which is a great chunk of change to get you started in life.

The USAA Career Starter loan program is offered to cadets and midshipmen commissioning through Army, Air Force, and Navy/Marines ROTC (Reserve Officer Training Corps) or through OCS/OTS (Officer Candidate/Training School). The terms and conditions change every year, so make sure you call or check with USAA for the most current information.

In 2012, you may apply for the loan within the 12 months prior to commissioning if you are a ROTC cadet/midshipmen, or 4 months prior if you are an OTS/OCS attendee. If you already commissioned, you have up to a year from your commissioning date to apply for the loan, which is subject to credit approval. I've never heard of anyone being denied. The first payment is deferred until 6 months after you commission, so if your EAD (Extended active duty) orders are delayed a bit you have that safety buffer.

This loan can be a powerful tool to get you started as a brand new officer. If you incurred any debt in college, such as credit card, student loan, or car loans, this can be your ticket to paying off that high interest debt with a low interest, fixed monthly payment loan.

Be careful that you don't get sucked into a cycle of debt though. This is not a loan that you should take out and then blow on a brand new BMW or Audi (“Lieutenant mobiles” are all too common in every service). There are no early repayment fees on this loan, so you could take out the full $25,000, immediately pay back $15,000, and then use the $10,000 remaining to pay off credit card bills, get your first PCS started, or anything else you need to do.

Don't treat this loan as free money though! The monthly payments are $471 for five years ($25,000 at 2.99%)! As a 2nd Lieutenant or Ensign, if you're not being paid BAH this could be almost a quarter of your take home pay. Only take out this loan if you have a plan for what you're going to do with it. Trust me when I say that you're going to miss almost $500 a month for the next five years.

Did I take the loan? I sure did. Find out how I used my USAA cadet loan.

Is the USAA Career Starter Loan (pre-commissioning loan) a good deal?

AMEX Platinum With NO Annual Fees for US Military

Military SCRA MLA AMEX Platinum

Military servicemembers and spouses can get the American Express Platinum with NO annual fees.  Pick up your military annual fee waived card here!

Learn more about the AMEX military fee waiver.

The AMEX Platinum offers:

  • $550 Annual Fee WAIVED for US Military (and spouses)!
  • 60,000 Membership Rewards Points welcome offer
  • $200 credit for Uber rides (or Uber Eats!) annually
  • $200 airline fee credit
  • Centurion Lounge and Priority Pass Airport Lounge Access
  • NO foreign transaction fees

These benefits make it my top recommend card.

If you already have an AMEX Platinum card, check out the other AMEX cards, Chase credit cards, and this month's top recommended credit card bonuses, most with no annual fees for US military personnel.

Subscribe to our mailing list

* indicates required
“Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.”

3 thoughts on “Is the USAA Career Starter Loan (pre-commissioning loan) a good deal?

  • February 19, 2014 at 15:31

    I know someone who was denied because the Marine Corps had us in IRR before we checked into TBS. He just called to explain the situation and eventually everything got approved. If you need the loan Mario, I would suggest you talk to USAA. They are an amazing bank that will work with you.

  • August 31, 2013 at 09:24

    Just wanted to say I was denied the career starter loan.


What are your thoughts?

This site uses Akismet to reduce spam. Learn how your comment data is processed.