I took the remaining $15,000 I had from the loan and invested it in: I waited until to start phase 2 of my plan. At most I was making 2%, which barely covers inflation in even the lowest inflation years, so I wanted to increase my return on investment. I invested $2000 into each CD and received the following returns:Īs you can see, I was already making money off my 2.99% loan. I structured mine so that I would receive a payment every year for the next five years.Īll the CDs were purchased through USAA and another bank in November of 2008, when interest rates were much higher than today. A CD ladder allows you to have greater access to your money while also maximizing your interest rate. Trust me when I say that you're going to miss almost $500 a month for the next five years. Only take out this loan if you have a plan for what you're going to do with it.
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.ĭon'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. 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). 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.īe careful that you don't get sucked into a cycle of debt though. This loan can be a powerful tool to get you started as a brand new officer.
I discussed the USAA Career Starter Loan and Navy Federal Career Kickoff Loan on my podcast, The Military Money Manual Podcast. Is the USAA Career Starter Loan a good deal for military officer cadets and midshipman? It depends on your personal financial situation and what you plan to use the loan for. Thank you for supporting my independent, veteran owned site. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Military Money Manual and CardRatings may receive a commission from card issuers. Military Money Manual has partnered with CardRatings for our coverage of credit card products. The Platinum Card® from American Express card is annual fee waived for military. Get a $695 credit card annual fee waived in my Ultimate Military Credit Cards Course