Military families and veterans face unique financial challenges. It’s easy to get overwhelmed trying to stay on top of the bills. However, there are many options available that may not be available to civilians to help you pay off your debts. Other than federal debt relief programs, you may also find help from nonprofit organizations and private companies offering options like debt settlement and debt consolidation.  

What Are Veteran Debt Relief Programs?

Veteran debt relief program refer to a collection of tools designed to help veterans and active military personnel get relief from debt. It’s not uncommon to face financial challenges as you readjust to civilian life. Fortunately, you’ll find a number of resources and programs to choose from, depending on whether you’re dealing with veteran debt, mortgage debt, or other unsecured debt.

Types of VA Debt Relief Programs

If you’re looking for ways to make VA debt management easier, there are three main options available. The federal government offers a number of programs designed to help veterans and active military. Other than that, you’ll find a number of good nonprofit programs, as well as private companies offering effective solutions to pay off debt.

Government-Backed Veteran Debt Relief Programs

The federal government has a number of financial assistance programs that can help you prevent accumulating debt, as well as get out of debt you may have already racked up. Some of the programs include immediate emergency assistance, help with student loans, debt consolidation, housing help, loan forgiveness programs, and more.

Depending on the nature of your debts and the specific requirements of the program, you’ll have to meet specific eligibility requirements and send an application. Once your application is reviewed and accepted, you may receive the assistance you need.

Non-Profit Veteran Debt Relief Programs

While government-backed veteran debt relief programs are excellent, the application and approval process can sometimes be quite long. Meanwhile, there are other sources you may want to consider. Here are a few nonprofit organizations that offer debt relief programs, grants, and financial assistance:

  • The American Legion offers cash grants to members of the military who need help to pay for health care expenses, utilities, housing, and food.
  • Operation First Response helps veterans facing emergencies such as eviction, foreclosure, groceries, and vehicle payments.
  • The Coalition to Salute American Heroes intervenes on behalf of veterans in need of immediate financial assistance.  

Private Veteran Debt Relief Programs

Private companies offer debt relief services to anyone in a vulnerable position due to debt. These organizations also offer services to veterans who are not able to resolve their debt through government or nonprofit assistance programs. Veterans drowning in debt can always turn to traditional debt relief options like credit counseling, debt consolidation, and debt settlement services offered by these private companies. If you have a lot of unsecured debt, one of these programs may prove to be the ideal solution.

How To Qualify

Qualifying criteria for veteran debt relief programs will depend on the type of program you’re qualifying for and whether the government, a nonprofit organization, or a private company backs the program. For example, if you’re applying for a debt settlement program with a private company, a common eligibility criterion is that you must have over $10,000 in unsecured debt. You can qualify for the program even if you have bad credit.

If you’re applying for a veteran debt consolidation loan, you must be a homeowner with a VA loan and must have built enough equity in your home. If you’re applying for the Homeowners Assistance Program, you must be a member of the Armed Forces and must have incurred an illness, wound, or injury in the line of duty.

Qualifying for debt forgiveness is typically harder since there may be income and employment requirements. For example, to qualify for the Public Service Loan Forgiveness program for student loans, you must have worked ten years for a government agency or a nonprofit organization and must have made at least 120 qualifying payments.

Benefits and Drawbacks of VA Debt Relief Programs

With so many options available, it may be tempting to jump right in and apply for a VA debt relief program to resolve your debts at the earliest. Before you do that, weigh the pros and cons so you can make an informed decision.


  • If you qualify, the program can forgive all or some of your debt.
  • You may be able to pay off your debts much faster.
  • Many programs, such as debt consolidation, can help you roll multiple debts into one to make repayment easier.
  • You may get access to a lower rate of interest, helping you save hundreds of dollars in interest charges.
  • You can settle your debts for less than the original amount you borrowed.
  • Nonprofit credit counseling agencies can provide you with personal finance education and financial counseling so you can learn how to manage your finances better.


  • Your lenders may not always accept your settlement offer.
  • In some cases, you may just be moving your debt around and may still owe the same amount.
  • There may be several fees associated with the debt relief program, such as origination fees in the case of a loan or balance transfer fees in the case of a balance transfer credit card.
  • Some debt relief programs can lower your credit score.
  • You’ll need to have a very low income to qualify for certain debt forgiveness or debt relief programs.
  • You’ll need to have excellent credit for programs that require you to take out a new loan or credit card.
  • Debt forgiveness is rare, and it may be difficult to qualify for it.

What Debt Relief Programs Are Available for Veterans?

Depending on your financial situation and the type of debt you have, you may be able to find a suitable debt relief program from the ones listed below.

Financial Assistance Programs

The federal government offers a number of financial assistance programs designed specifically to provide debt relief to veterans and active military service members.

  • Military Debt Consolidation Loan (MDCL): If you have a VA home loan, MDCL offers you a “cash out” element that you can use to pay off unsecured debts like payday loans, medical bills, credit cards, and personal loans.
  • Veterans of Foreign Wars Unmet Needs: This program pays your creditors directly if you’re facing financial hardship because of military-related injuries or deployment. Military families can also get grants for basic life needs.
  • Operation First Response: The program offers financial help to disabled veterans and helps cover the cost of mortgages, rent, vehicles, and more.
  • Operation Family Fund: The organization is funded through donations and provides grants to military families in need.

Disabled Veteran Debt Relief Grants

Disabled veteran debt relief grants are designed to help disabled veterans and military personnel deal with everything from student loan debt to finding a permanent home. Here are a few excellent resources to look into if you’re looking for disabled veteran debt forgiveness or other debt relief grants:

  • If you’re permanently and totally disabled, you may not have to repay your federal student loans under the Total and Permanent Disability Discharge program. It will also relieve you from your obligation to complete the TEACH Grant service.
  • is a VA website that offers information for different grant programs.
  • offers information about grants available throughout the country.
  • The VA also offers disability housing grants and financial aid so you can purchase a suitable home or adapt your home to meet your needs.

5 Best Veteran Debt Relief Programs

A lot of army personnel deal with financial difficulties, but the good news is that help is available. Here’s a list of the five most effective veteran debt relief programs that can help you.

1. Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act (SCRA) is a federal law that regulates the interest rates for auto loans, credit cards, and other financial services for military personnel. If you took out a student loan, home loan, auto loan, or incurred any credit card debt before you became an active-duty military servicemember, you can get your interest rate lowered to a maximum of 6% per year. The law also has protections in place to help with wage garnishments, evictions, and renting.

“The current version of the Servicemembers Civil Relief Act (SCRA) was passed by Congress and signed into law by President George W Bush in 2003, as a completely revised and updated version of the original Soldiers’ and Sailors’ Civil Relief Act (SSCRA) that was signed by President Roosevelt in 1940,” explains Brad Reichert, Founder and Managing Director of Reichert Asset Management LLC. 

“The SCRA is designed to relieve those who have answered the call to our country’s defense of the kinds of burdens that might otherwise distract them from their duty to ensure our nation’s security and safety every day,” shares Reichert.

2. Military Debt Consolidation Loans

If you have a VA home loan, you may qualify for a debt consolidation loan at a much lower interest rate than civilian loans. If you qualify, you can use the funds to pay off your high-interest unsecured debts and replace them with a low-interest loan, which you can pay off with a single monthly payment.

3. Homeowners Assistance Program

The Homeowners Assistance Program (HAP) was set up to help veterans, active service members, surviving spouses, and those working in the Department of Defense facing foreclosure. If you’re unable to keep up with mortgage payments, dealing with collection agencies, unable to sell your home, or have to sell your home at a loss, the program can provide you financial assistance by paying benefits for foreclosure, government acquisition, and private sale.

4. Debt Settlement

If you have a lot of unsecured debts, you can sign up for a debt settlement program that involves negotiating with your lenders to pay less than you owe. If you’ve missed several payments and don’t think you’ll be able to settle your account in full, you can get in touch with a debt settlement company to negotiate on your behalf.

5. VA’s Debt Relief Options

The VA offers several options to veterans facing financial problems. For example, they can help you set up a Mortgage Loan Modification, which can help you avoid foreclosure and pay a reasonable amount per month to keep your home. The Loan Guarantee Service can also help you get forbearance if you’re finding it difficult to keep up with loan and mortgage payments. Get in touch with VA loan technicians to find other ways you can avoid foreclosures.

Student Loan Debt Relief for Veterans

Veterans with student loans are eligible for several debt relief measures that can cancel loans or forgive interest. The Servicemembers Civil Relief Act also caps the interest rate at 6% if you’re serving in the military. Here are a few other options that may be available to you if you qualify:

  • Total and Permanent Disability Discharge for student loan forgiveness
  • Public Service Loan Forgiveness
  • The Department of Education waives all interest on student loans if you were deployed in an area with hostile fire pay or imminent danger.
  • You can get up to $65,000 in repayment assistance through the Air Force Judge Advocate General’s (JAG) Corps.
  • You can receive a total of $120,000 in loan forgiveness through the Health Professionals Loan Repayment Program to pay off dental or medical school loans.

Debt Protection Program for Veterans

The government has several debt protection programs for veterans and active-duty service members to protect them from debt and help them avoid financial anxiety. For example, the Servicemembers Civil Relief Act prevents landlords from evicting you without a court order. It also stops vehicle repossessions and foreclosures without a court order.  

The Joint Federal Travel Regulations protect you from evictions or foreclosures and provide cash allowances to help you with transfers and travels associated with landlord actions. The Military Lending Act protects borrowers by putting a cap on fees and interest on vehicle title loans and payday loans.

The Bottom Line on Military and Veteran Debt Relief Programs

Ignoring debt will not make it go away. Instead, take action at the earliest to ensure that the problem doesn’t snowball into something more serious. Fortunately, you have access to a number of excellent government-backed as well as other veteran debt relief programs that can help you become debt-free and receive loan forgiveness in many situations.