Should I take the Career Starter Loan?

In May of this year I graduate and Commission as a 2nd Lieutenant. Having college debt and multiple loans, as well needing a more reliable vehicle after graduation, I wanted to know if it would be a smarter move to do one of the following: take out the USAA starter loan for Officers, get what I need and sort of consolidate some of my debt or try to for anything as much as I can in cash and worry about the college loan payments as I start getting active duty pay. I'll have around $20k + in debt upon graduation so I wouldn't use the entire loan solely for that purpose.

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Congrats on your commission!! I remember the day I pinned on the butter bars like it was yesterday, although May 31, 2000 was definitely not yesterday!  I took the USAA Career Starter Loan and while I cannot sway you one way or the other, here are a few things to consider:


USAA believes the Career Starter Loan offers a great opportunity to get you started on the right foot financially at a very low cost relative to other sources.  Even so, remember that this is a loan that you will have to repay so determine what amount, if any, is appropriate for you to borrow.


Follow these steps to see how the starter loan may help you:

1.  Assess your current situation to determine your available cash flow (create a budget if you have not already), and review your financial goals.

2.  Determine your current and future Debt to Income(DTI) ratio.  Consider keeping consumer debt below 20%.

3.  Review your overall insurance needs with a qualified insurance professional.  Think about how your possessions and life are protected (renters' insurance, auto insurance, life insurance).

4.  Don't borrow more than you need and make sure you use the loan to be financially healthy before discretionary items. 

  • An example of this is to use the loan to set up an emergency fund, pay off high interest rate credit card debt, and buy uniform items; before going on that vacation to Jamaica.
  • Another option is to purchase an affordable vehicle or pay off a higher interest car loan.  Don't forget additional expenses like class rings, dress uniform, and furniture or other household items.

Finally, if you have any more questions, our USAA financial advisors are available to speak with you and help you set up a plan. 


Best of luck as you begin your military career.


Josh Andrews

USAA Director of Financial Advice

Lt Col, USAF Reserves