A person serving in the military is considered to be a good credit risk due to the secure nature of his job and a relatively small but steady income from the government (especially in case of new recruits). Many financial institutions like banks, credit card and loan companies are more than willing to offer various types of loans to people actively serving in the military. The loans available to military personnel are broadly categorized under military loans.

Many of these financial institutions have special loan packages for the military that promise zero processing fees, 100 percent financing and no annual fees. Several of them also promise perks like cash back or frequent flyer miles.

While shopping for a loan, one of the most important things to keep in mind is the choice of the lending company. This is because some payday lenders and cash advance stores start operating from locations in close proximity to military bases, use business names that indicate a military connection (such as Armed Forces Loans, Military spot and Army.com); and frequently employ former military personnel to solicit soldiers for their business. All of these activities often lure unwary military personnel into a debt trap because of the high rates of interest charged. A solider taking out the loan needs to check the credentials, especially of a company offering ready cash by calling up agencies like Better Business Bureau or the local Chamber of Commerce.

A soldier also needs to plan how to pay back the money. The repayment has to fit his salary and budget. For money that is required for a short-term emergency, the ideal company is the one that pays the money at the lowest interest rate and the least fees. For loans taken to fulfil a long-term goal or need, he needs to choose a loan that not only offers lower interest rates, but also leaves an option for lower monthly instalments spread over a long or short period depending upon his payback capabilities.