Written by: Andrew Allen
Edited by: Lillian Guevara-Castro
In a Nutshell: Military service members may not know where to turn when they need loans. Pioneer Military Credit links active-duty military personnel with loans ranging from $500 to $10,000. The company complies with the Military Lending Act, which protects service members from predatory lenders. Pioneer Military Credit also helps borrowers establish and improve their credit.
Americans owe a debt of gratitude to the country’s military service members, who dedicate their lives to keeping our nation secure and preserving its freedom. Even in times of peace, the lives of active-duty military personnel are riddled with unique challenges.
Just like civilians, military service members sometimes need loans to help them bridge financial gaps in their lives.
Pioneer Military Credit provides active-duty military personnel access to personal loans. We spoke with Randy Freese, Pioneer Military Credit’s Chief Marketing Officer, to learn more about the financial challenges service members face and how Pioneer Military Credit can help them.
Military service members may receive new assignments, known as Permanent Change of Station (PCS) orders, from time to time that require them to move from one base to another. The military often reassigns service members during the summer months to avoid conflicts with school schedules.
New assignments require service members to purchase or rent a house or apartment near their new base and absorb all the costs of transforming a house into a home. Military service members may use loans to help pay for moving expenses and furniture.
“There are just a lot of extra expenses that can happen when military service members have to move to a new location,” Freese told us. “The military lifestyle can create some unique expenses that many people don’t have to deal with because they’re grounded in one place. Though they might stay on one base a little bit longer than they used to, military service members definitely move around a lot.”
Service members may also seek financial assistance in the form of loans when they deploy. Freese said some service members prefer to purchase their gear than use the equipment the government provides to them.
Military service members preparing for deployment may decide to travel domestically before leaving the country. Freese said some service members go on vacation with their families before deploying, while others travel to visit their parents before they leave the country. Service members may apply for loans to help finance their pre-deployment travels.
“PCS orders and deployments are probably the two biggest reasons that military service members apply for loans,” Freese said. “But we also see other use cases where people have tight budgets and need financial assistance to make it through the month. We also see a lot of need for money to pay for emergency expenses such as car repairs.”
The Military Lending Act Protects Service Members
Pioneer Military Credit works exclusively with military service members, offering them installment loans ranging in value from $500 to $10,000. Some online lenders may provide larger loans, but Freese said the complexities and restrictions of the Military Lending Act can dissuade lenders from offering loans to military service members.
Congress first enacted the Military Lending Act in 2006, and the Department of Defense expanded it significantly in 2015. The act limits the interest and other loan fees creditors can charge service members.
Organizations that lend to active-duty military personnel, their spouses, or dependents must follow the protections established by the Military Lending Act. The act does not apply to veterans.
Many banks offer products and services to military personnel, but Freese said most financial institutions don’t provide loans to service members with poor credit scores. Pioneer Military Credit works with service members to help them access personal loans when other lenders won’t.
“The big thing that we try to focus on is helping service members get responsible loans when others have turned them down,” Freese said. “Now, we don’t approve everyone who comes to us for a loan, but that’s our focus. We do full credit checks and review an applicant’s credit report.”
Serving in the military can be a stressful endeavor. Freese said the nature of a military service member’s position may cause them to be less mindful than the average borrower of issues that can negatively affect their credit.
Service members who engage with Pioneer Military Credit can expect a streamlined loan application process. The company uses advanced technology to securely confirm identity and expedite the capture and confirmation of the applicant’s military status and military income.
“We understand the military and the lifestyle of service members,” Freese said. ““This includes strong knowledge of the military pay system and official military documents. That’s a big deal to our customers.”
Helping Service Members Improve Their Credit
Pioneer Military Credit started in 1986. Initially known as Pioneer Military Loans, a new owner purchased the company approximately four years ago.
Though under new ownership, the organization follows an approach to underwriting similar to that used by Pioneer Military Loans for more than 30 years. Freese said several of the employees who worked for Pioneer Military Loans are still with the company under its new ownership.
“There’s been a kind of evolution within the company over its life, but we’ve always had the same type of product offerings,” Freese said. “And we have the same type of commitment to serve the military community and the same goals of treating everyone fairly. The changes in ownership haven’t made any differences in those areas.”
Pioneer Military Credit helps service members build their credit. The company reports to the Credit Reporting Agencies (CRAs), to help borrowers improve their credit profiles. Freese said not all lenders operating in the same space as Pioneer Military Credit follow that practice.
The company reviews credit scores and the debt-to-income ratio of potential borrowers to assess their ability to repay a loan. Debt-to-income ratios compare a borrower’s gross income to their combined debt payments.
Pioneer Military Credit’s collections team knows how to best work with military service members. Freese said reaching out to a service member’s superiors can harm the service member, and Pioneer Military Credit values treating its customers with respect and understanding.
The company’s collections unit is well-versed in communicating with military personnel. Its employees are familiar with military ranks and how to address service members. And they use effective practices to guide borrowers through financial issues they may be experiencing.
Freese said understanding the military lifestyle and how to communicate with service members and their spouses helps the company’s collections team operate constructively.
Efficient Loan Funding Benefits Borrowers
Pioneer Military Credit appreciates that service members may need fast access to cash. The company provides an expedited application process to extend convenience to its customers. Freese said borrowers can complete the company’s loan application in a few minutes.
Pioneer Military Credit quickly provides funding to successful applicants. Freese said customers who book their loans before noon can receive funding later the same day or the next day. The company partners with an FDIC-insured bank to lend and deliver financing to borrowers.
“Getting money into borrowers’ accounts quickly is a pretty big deal,” Freese said. “Most people who come to us for loans are looking for a speedy process, especially if it’s an emergency. Weekends and holidays are one exception to our usual funding timelines because we can only provide funding to borrowers when the banks are open.”
Pioneer Military Credit believes in providing financial education to its customers. Many service members join the military directly after graduating from high school. Freese said some military personnel open their first bank account the day after they receive their first paycheck, so money management is a discipline that may not be familiar to them.
The company’s blog contains educational articles to help service members implement healthy financial practices, including practical tips that deploying service members can follow to manage their finances.
Inflationary pressures have caused interest rates for some lending products to increase in recent years. But thanks to the Military Lending Act, rate caps on loans for service members remain the same. Freese said Pioneer Military Credit’s margins are tight due to market factors, but the company’s goal is to help as many service members as possible to obtain a personal loan they can afford.
