Financing a car purchase can be costly. However, if you're a current or former member of the military, you may be able to secure a lower interest rate, more favorable terms and other benefits.
Below, CNBC Select names the best military car loans, based on rates, repayment terms, loan amounts and other factors. For more on how we made our selections, see our methodology below.
Shop for the right auto loan
Best for larger loans: PenFed Credit Union
Who's this for? While most lenders cap auto loans at $100,000, PenFed Credit Union will go up to $150,000. It also approves financing up to 125% of the car's value (up to the $150,000 limit), giving you more wiggle room to cover fees and other expenses.
Standout benefits: Borrowers who use PenFed's Auto Buying Program and purchase a new or used vehicle from a certified dealer are eligible for an insurance deductible reimbursement of up to $500 twice a year (not available in New Hampshire or New York).
- Loan amounts start at $500
- No early payoff fees
- Prequalification available
- Cash incentives through car-buying service
- Co-borrowers allowed
- High satisfaction rating on J.D. Power's 2024 consumer lending study, indicating that this lender has strong customer service
- Credit union membership required
- Late payments subject to fees
Federally Insured by NCUA. To receive any advertised product from PenFed, you must first become a member of the PenFed Credit Union. Rates and offers current as of October 21, 2025, and are subject to change. Actual APR will be determined at the time of disbursement and will be based on application and credit information. Rates quoted assume excellent borrower credit history. Not all applicants will qualify for the lowest rate. Rate depends on term. New vehicles are where you are the original owner and the vehicle is a current 2024 model year or newer and has less than 7501 miles.
Best for longer terms: Navy Federal Credit Union
Who's this for? Navy Federal Credit Union offers loans with terms of 96 months, the longest of any lender on this list.
Standout benefits: NFCU preapproval is good for up to 90 days. With most lenders, preapproval expires after 45 or 60 days.
Best for purchasing an older car: USAA
Who's this for? While it can be tough to get financing for older vehicles, USAA offers loans specifically for older cars (models manufactured in 2017 or earlier), with terms ranging from 36 to 72 months.
Standout benefits: USAA offers borrowers a 0.25% autopay discount.
USAA Auto Loans
Annual Percentage Rate (APR)
Rates start at 4.89% but can depend on the loan type
Loan purpose
New vehicles, used vehicles and older vehicles
Loan amounts
Starts at $5,000
Terms
36 to 84 months
Credit needed
Not disclosed
Early payoff penalty
Not disclosed
Late fee
Not disclosed
Terms apply.
Pros
- Offers loans specifically for older car purchases
- Offers terms as long as 84 months
- Offers 0.25% rate discount when you sign up for autopay
Cons
- Car loans for older cars are not eligible for terms as long as 84 months; instead, you'll get a maximum term of up to 72 months
Best for refinancing: Service Credit Union
Who's this for? Looking to refinance your car loan? Service Credit Union offers a 0.75% APR loan discount with DFAS direct deposit into a qualifying checking account.
Standout benefits: You can use Service CU's car loan calculator to estimate what your monthly payment will be.
Service Credit Union Auto Loans
Annual Percentage Rate (APR)
Rates start at 4.99%
Loan purpose
Auto loan refinancing
Loan amounts
Not disclosed
Terms
48 to 84 months
Credit needed
Not disclosed
Early payoff penalty
Not disclosed
Late fee
$35 skip payment fee
Terms apply.
Pros
- Offers loans for refinancing
- Offers terms as long as 84 months
- Skip-A-Pay offered, though you will incur a $35 fee for each payment you skip
- Can submit an application online, over the phone or in-person
- Offers up to a 0.75% rate reduction with direct deposit set up to a Service Credit Union checking account
Cons
- Doesn't disclose all fees on their website
How do you qualify for a military car loan?
To qualify for a military car loan, you'll need to be an active duty service member or veteran. Proof of service can be confirmed with a military ID, Certificate of Release or other form of discharge documentation.
Spouses of service members are typically eligible for military loans, but eligibility for parents, siblings, and other relatives varies by lender.
Benefits of a military car loan
Military car loans typically come with better rates, more flexible credit qualifications, longer repayment terms and lower down payment requirements. Some lenders may offer a discount on auto insurance.
In addition, lenders are not allowed to charge a prepayment penalty on car loans for active duty service members or their spouses.
Military status can also provide certain legal protections. The Servicemembers Civil Relief Act sets a 6% interest rate cap on pre-service loans and requires forgiveness of interest above 6%. It also allows military members to end their auto lease early without penalty and prevents repossession without a court order.
FAQs
What is a military car loan?
Military car loans are auto loans meant for active-duty and retired service members. They often come with lower interest rates, fewer fees, longer term options and more flexible credit requirements. Lenders often allow a smaller down payment or no money down on a military car loan.
Who qualifies for a military car loan?
Qualifications vary by lender, but typically you need proof of military status, such as your active-duty military ID or discharge papers. Beyond that, you'll need to provide the same information as any other borrower, including proof of identity, residence and income, your Social Security number, as well as employment details, proof of insurance and vehicle information.
Can I use a military loan for a used car?
Yes, military auto loans can be used to finance new or pre-owned cars. Financing for used vehicles is usually limited to a certain model year or mileage, however.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Our methodology
CNBC Select analyzed the leading auto loan providers to determine the best for military car loans.
To narrow our search, we focused on the following features:
- Loan amounts and terms: The lenders on this list offer a range of loan amounts and terms to suit a variety of needs.
- Prequalification: All lenders offer online prequalification, allowing you to get an estimate of your rate without affecting your credit.
- Military benefits: Lenders that offer rate discounts and other benefits to current and retired service members were given more weight.
- Fees: We prioritized lenders that limit up-front fees for military members. None of the lenders on this list charges a prepayment penalty.
- Application process: We evaluated whether lenders offered same-day approval and a fast online application.
- Customer service: All the lenders on our list provide customer service available via telephone, email and secure online messaging.
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