Usaa

[teacherman84]

why couldn't you consider it being 90 days before OBLC, or any of your ADT rotations? You're active when at training or on rotations. Does usaa make a specific exception that would preclude you from doing it that way?

That was my impression too. Have any current or former HPSP students had experience with this?

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[xmsr3]

As I stated before, HPSP students must be 90 days from going on active duty to get the loan. 90 days. That's 90 days from the end of your 4th year. You will not be on active duty until you graduate and are not eligible until then.

Feel free to call them, but that's what I was told when I called them. The career starter loan is designed for new accessions coming on active duty from ROTC or one of the academies. After receiving the loan, they automatically take out the monthly payments (something in the $500/month range). So, not really ideal for a med student anyway.

$475/month in debt service is a lot for anyone participating in HPSP, since their net stipend is only about $1600/month. I suppose it may be possible to live on $1100/month as a med student, but you'd have to be frugal to a fault and live in a very cheap area.

 

[Droopy Snoopy]

$475/month in debt service is a lot for anyone participating in HPSP, since their net stipend is only about $1600/month. I suppose it may be possible to live on $1100/month as a med student, but you'd have to be frugal to a fault and live in a very cheap area.

I took the loan four years ago, at 2%, and payback didn't start until I started active duty. Eligibility was within 18 months of commissioning. Things might have changed though, certainly sounds like the rate went up.

I've had nothing but great experience with USAA. 2 mortgages, auto insurance, various investments. The banking is awesome because #1 you can use any ATM without worrying about the piddly little fees they charge and #2 you can make deposits from home via scanner (or they provide you postage-paid envelopes to mail).

 

[notdeadyet]

why couldn't you consider it being 90 days before OBLC, or any of your ADT rotations? You're active when at training or on rotations. Does usaa make a specific exception that would preclude you from doing it that way?

You need to send them a copy of your orders to get the loan. I remember when I applied and explained that I wasn't active duty but was going to be ADSW (active duty special work, a temporary active status), she asked me, "Oh, for how long?"

Ask before applying. Orders for a 30 day active status may not cut it with them.

 

[DeadCactus]

You need to send them a copy of your orders to get the loan. I remember when I applied and explained that I wasn't active duty but was going to be ADSW (active duty special work, a temporary active status), she asked me, "Oh, for how long?"

Ask before applying. Orders for a 30 day active status may not cut it with them.

I take it they let you have the loan?

 

[notdeadyet]

I take it they let you have the loan?

Yeah. It's a pretty quick process, but you need to have your paperwork in order. You also need to have your Army pay be direct deposit into your USAA account for the life of the loan. That's why they give it.

Great strategy. I originally thought I'd just use them for the loan, but they're now my primary bank.

 

[xmsr3]

NotDeadYet, are you HPSP or USUHS?

 

[notdeadyet]

NotDeadYet, are you HPSP or USUHS?

Neither. National Guard ASR.

 

[teacherman84]

To clarify for other HPSP students, I spoke with USAA today and we are eligible for the loan within 18 mos of going active duty after finishing school not officer training or ADTs. So if you are interested it has to wait until half way through MS-3.

Also, for others who are currently USAA customers, let USAA know once you are commissioned and it can give you a reduced policy for your auto insurance and other benefits even while you are a student.

 

[DocArmy]

To clarify for other HPSP students, I spoke with USAA today and we are eligible for the loan within 18 mos of going active duty after finishing school not officer training or ADTs. So if you are interested it has to wait until half way through MS-3.

Good call teacherman.

They know about HPSP, and they don't think that you are on AD when you are HPSP. And, really, you're not. 6 weeks a year isn't AD. Your status is still IRR, even though you're on Active Duty for Training (ADT). If you're itching to have a loan, just pull a student loan and then pay it off with the career starter later, or wait until MS 3.5.

 

[notdeadyet]

To clarify for other HPSP students, I spoke with USAA today and we are eligible for the loan within 18 mos of going active duty after finishing school not officer training or ADTs. So if you are interested it has to wait until half way through MS-3.

I was told by them originally that the "within 18 months of going active duty" meant that you could apply for the loan at any point from being active duty to 18 months later. Not that you could apply a year and a half BEFORE going acitve.

You need orders indicating that you are active. I don't see how you could do that as a third year medical student.

Maybe it's changed?

 

[teacherman84]

I was told by them originally that the "within 18 months of going active duty" meant that you could apply for the loan at any point from being active duty to 18 months later. Not that you could apply a year and a half BEFORE going acitve.

You need orders indicating that you are active. I don't see how you could do that as a third year medical student.

Maybe it's changed?

Maybe that is the case...the guy I spoke with on the phone today seemed to know all about HPSP and when he said the 18 mos I got the impression he meant before going active duty. Either way, I was just going to use it for a vehicle but the rates are better financing with an auto loan from both them and the local credit union.

 

[xmsr3]

I was told by them originally that the "within 18 months of going active duty" meant that you could apply for the loan at any point from being active duty to 18 months later. Not that you could apply a year and a half BEFORE going acitve.

You need orders indicating that you are active. I don't see how you could do that as a third year medical student.

Maybe it's changed?

Can anyone whose going to USUHS tell me what the orders we get prior to OBC say? Are USUHS students considered regular "active duty" or are we given some other status and if so, how does this effect our eligibility for the career starter loan?

 

[dwb8p]

Can anyone whose going to USUHS tell me what the orders we get prior to OBC say? Are USUHS students considered regular "active duty" or are we given some other status and if so, how does this effect our eligibility for the career starter loan?

Unlike HPSP, you're as regular army (active duty) as they come. Once you receive your orders in May (or June) you should have no problem getting the loan.

 

[notdeadyet]

Are USUHS students considered regular "active duty" or are we given some other status and if so, how does this effect our eligibility for the career starter loan?

You're active in USUHS. You'll be eligible for the career starter loan.

 

[xmsr3]

Thanks notdeadyet and dwb8p, for the info.

 

[The White Coat Investor]

$475/month in debt service is a lot for anyone participating in HPSP, since their net stipend is only about $1600/month. I suppose it may be possible to live on $1100/month as a med student, but you'd have to be frugal to a fault and live in a very cheap area.

WTH? It was $923 when I was a med student.

 

[xmsr3]

WTH? It was $923 when I was a med student.

Do you mean the HPSP stipend was $923/month or the monthly debt service for the career starter loan?

If you mean the stipend its because they raise it each year to keep up with inflation. For 2010 its going to be about $2000/month gross, but that's taxable. From talking with people who are currently in HPSP most say they get to keep $1600/month to live off.

My $1100/month figure indicated that, if you were to get the career starter loan you would only have $1125/month after taxes and the monthly debt payment were subtracted from your stipend.

Of course, from what people have told me hear, it seems that HPSP can only get the loan 18 months before finishing school, then start making payments once they graduate, (and start residency as O3s) in which they make enough to easily pay the loan and still live comfortably.

 

[BigNavyPedsGuy]

Of course, from what people have told me hear, . . . . . . .

Ah, yes, I love it when people spread third hand knowledge as fact.

 

[Slevin]

WTH? It was $923 when I was a med student.

I actually get like 1860 after taxes for the HPSP not too shabby

 

[DocArmy]

$475/month in debt service is a lot for anyone participating in HPSP, since their net stipend is only about $1600/month. I suppose it may be possible to live on $1100/month as a med student, but you'd have to be frugal to a fault and live in a very cheap area.

You are correct, except they won't give it to you on HPSP, unless you're almost done (as previously noted). Also, according to IRS publication 3, regarding military pay tax code, the HPSP stipend is taxed in the same way as your BAH (it's not taxed at all). So the net is the full $1992/month. (I freaked when I started getting my checks and there was nothing withheld, so I tracked that one down and confirmed it with DFAS.)

And I don't know how anybody lived on $960 a month. That's an oucher.

 

[The White Coat Investor]

And I don't know how anybody lived on $960 a month. That's an oucher.

Especially when there was no signing bonus and you give up your ISP the last year. ~$200K behind I figure than if I'd gotten loans instead.

 

[AFDuck]

DocArmy, are you in your first year in HPSP? Just curious because I've had taxes taken out of my HPSP check for 3.5 years, and I'm wondering why you don't. Notably, I still get all of the fed income tax money back as a refund each year, but its weird to me that they don't even deduct it from your check initially.

 

[CajunMedic]

I switched to USAA after moving to Louisiana since they were one of the few insurers actually doing Homeowners policies here. Their car insurance costs less than half of what State Farm was charging. We did have to go back and forth a couple of times after Hurricane Gustav to get our roof replaced (orginally they only wanted to repair the area where the tree branch went through), after the 2nd adjuster came out they agreed to pay for the whole thing. We've got our house, cars, motorcycles, and a valuables policy with them. They were giving competitive rates for mortgages. Overall, we're happy with them

 

[DocArmy]

DocArmy, are you in your first year in HPSP? Just curious because I've had taxes taken out of my HPSP check for 3.5 years, and I'm wondering why you don't. Notably, I still get all of the fed income tax money back as a refund each year, but its weird to me that they don't even deduct it from your check initially.

I'm a first year. Yeah, it's been a frustrating process trying to figure that out. They aren't holding out anything at all. They taxed my signing bonus and everyone I've talked to said that it was not taxed. I just would have thought that SOMETHING would have been held out. I guess in April I'll get on here with my "I'm being audited" or "I just got a huge tax bill" rant and then we'll know. Otherwise I'm just kind of holding my breath for now.

 

[The White Coat Investor]

I'm a first year. Yeah, it's been a frustrating process trying to figure that out. They aren't holding out anything at all. They taxed my signing bonus and everyone I've talked to said that it was not taxed. I just would have thought that SOMETHING would have been held out. I guess in April I'll get on here with my "I'm being audited" or "I just got a huge tax bill" rant and then we'll know. Otherwise I'm just kind of holding my breath for now.

I never had anything held out of mine. I would have gotten the income tax back anyway. But the SS and medicare I wouldn't have.

 

[fletcher2010]

Does anyone know what the credit reuirements are for a USAA career starter loan. I know that they do not base it off of income, and I was told by a USAA employee that it was only based off of your equifax score. but I applied for it in october and I was denied. The loan officer that was helping said that it was because my credit score was under 600 and that if I could get my score up to 600 I would be approved. My score is now above 600 so I applied again and I was denied again. Any insight would be great?

Also I was wondering what the differece was between the $25,000 4.9% loan and the $30,000 1.9% loan. Can you apply for either one if you are an ROTC cadet?

 

[teacherman84]

Your best bet with question #1 is talking with a USAA rep.
my impression has been that the 30k loan is for academy grads...this is what my friend who just graduated from USNA got...and the 25k is for other newly commissioned officers

 

[Boopieness]

usaa is excellent for everything, but mortgages.

my car insurance is at 1 million coverage (I would recommend that limit to all docs) and is still way cheaper then geico, including rental car & tow/roadside assistance.

Once people find out you are a doc they will attempt to get you for every penny they think that they can get, anything beyond the coverage will come out of your pocket.

Once had a read end accident on Thursday evening. USAA had check in my hands Tuesday & it was not my fault. Did not cash check. Other insurance co. responsible for the driver that hit me took two months.

Their car loan is great, bought car off ebay dirt cheap, had it all done electronic.

Anyway, for mortagages, they royally suck. They do not seem to specialize in VA loans and USAA outsources their mortgage to some other entity that has horrendous reviews. Just google that for usaa mortgage reviews.

 

[DeadCactus]

Got me USAA accounts settled in. Set-up a checking, savings, and credit card through them. I was able to use the iPhone deposit application on a check, so it does work in Texas.

Switched my car insurance to them. Also opened up an IRA with them and will probably do a Brokerage account soon.

Overall, very happy with everything so far...

 

[dwb8p]

Got me USAA accounts settled in. Set-up a checking, savings, and credit card through them. I was able to use the iPhone deposit application on a check, so it does work in Texas.

Switched my car insurance to them. Also opened up an IRA with them and will probably do a Brokerage account soon.

Overall, very happy with everything so far...

USAA is great for insurance and banking, but not so much for investments. Most everything they offer is way expensive. I think it's a little silly how some people drink the USAA koolaid and start using them for everything regardless of better outside options. For mutual funds check out Vanguard. For brokerage, check out Fidelity, Schwab, or even Wellstrade.

 

[DeadCactus]

USAA is great for insurance and banking, but not so much for investments. Most everything they offer is way expensive. I think it's a little silly how some people drink the USAA koolaid and start using them for everything regardless of better outside options. For mutual funds check out Vanguard. For brokerage, check out Fidelity, Schwab, or even Wellstrade.

I don't doubt that they are not the best for investments, but I didn't notice a significantly higher cost between USAA and Fidelity or Vanguard in terms of setting up an IRA. I'm planning to start a brokerage account for some light trading and may not go with USAA for that, but at a first glance the cost differences were not major unless you were frequently making trades.

I'm not under the illusion that USAA was the best individual option for investment. But at this point all I'm doing is maxing out an Roth IRA and some minor trading. I may be paying them a little bit more for the services, but at this point having it all in one place is worth the minor increase in cost for me...

 

[dwb8p]

I don't doubt that they are not the best for investments, but I didn't notice a significantly higher cost between USAA and Fidelity or Vanguard in terms of setting up an IRA. I'm planning to start a brokerage account for some light trading and may not go with USAA for that, but at a first glance the cost differences were not major unless you were frequently making trades.

I'm not under the illusion that USAA was the best individual option for investment. But at this point all I'm doing is maxing out an Roth IRA and some minor trading. I may be paying them a little bit more for the services, but at this point having it all in one place is worth the minor increase in cost for me...

Setting up a Roth IRA should never cost you a thing. The costs I'm referring to are within the funds that USAA offers, most of which are actively managed with high expense ratios (>1%). They also have a very small scope of index funds and of those that are offered, their expense ratios are much higher than the comparable Vanguard fund. The difference in expense ratios may not look like much, but over time (ie, within your Roth that you won't touch for the next 30-40 years) they will eat into your growth significantly.

This forum is a poor venue to discuss investing however, so I suggest you head over to bogleheads.org forum if you are interested in better options.

 

[DeadCactus]

My IRA is housed by USAA, but the money in it is currently invested in Vanguard funds. It may be costing me a little bit more to buy into funds, but nothing I can see of long-term consequence.

 

[laughandatear]

sorry, no caps

i've been a usaa insurance/investment/banking client for years and also just closed a va mortgage loan with them as of 3 days ago. i've always found their insurance rates to be extremely competitive. investment options are not as vast as the larger low-expense houses (vanguard/fidelity) and thus they suffer on some of the expense ratio comparisons (0.18 vs 0.29 for example on an S&P 500 index). however, the customer service with usaa is second to none. you get a customer service rep as soon as you want one. always. usaa also offers certified, financial advice by licensed, uncommissioned pros for free at the touch of a button.

my va loan was processed by an individual who was extremely attentive. when he was out sick one day during the process, he emailed/called me to offer his alternate if i had any questions on a random thursday 2 weeks before my loan was due to close. i also received his personal cell phone number "just in case" there was a problem. there wasn't.

overall, i'm a hard person to please. i get peeved when i don't get ketchup in the drive thru at hardees. usaa has met my standards of customer service at every chance, and i'm willing to lose a few thousandths of a percentage point on my mutual funds each year to get their service.

re: deposit@mobile
some of the problems people are having may stem from state-by-state rules i guess? but i can clear up some of the problems for others i think. this is a new program that usaa started which will soon be copied by other banks. it was recently highlighted on usatoday.com

basically, usaa "floats you a loan" on the promise of a picture of a check you send them on your iPhone. they make the funds available immediately in your account. no float. your brick/mortar bank probably won't even do that. they assume some risk there (understandable) so they ask that you qualify for some loan product of their's first. basically, if you have one of their credit cards or previous loans, they assume that you're not faking checks over your iPhone. but they basically ask that you have credit-worthiness before approving you for the service. once approved, you can send them pictures of checks and they (on your credit-worthiness) will immediately credit your account so you can use the funds to buy whatever you want. right away.

given that many/most of us enjoy the financial stability of USAA in terms of insurance, this small inconvenience seems reasonable to me.

laugh/tear

 

[dwb8p]

investment options are not as vast as the larger low-expense houses (vanguard/fidelity) and thus they suffer on some of the expense ratio comparisons (0.18 vs 0.29 for example on an S&P 500 index).

usaa has met my standards of customer service at every chance, and i'm willing to lose a few thousandths of a percentage point on my mutual funds each year to get their service.

This is very misleading. USAA doesn't even come close in comparison to Vanguard for investing in index funds. The index fund you mention is one of only 3 that USAA offers compared to the 100+ offered by Vanguard. The rest of USAA's funds are actively managed with expense ratios > 1%. Also, you will be forfeiting much more than "a few thousandths of a percentage point each year" even with the S & P 500 that you cite instead of taking the Vanguard alternative. See below for examples.

For example (S&P 500 Fund):

Amount invested : $10,000
Annual return : 7.00%
Projected expense ratio is : 0.29%
What if the expense ratio is : 0.18%

Your investment returns over 30 years will be $2,203 more if the actual expense ratio is 0.11 percentage point(s) less than the projected.


Projected expense ratio
Actual expense ratio

0.29% 0.18%

Net market value after Difference
1 year $10,671 $10,682 $11
5 years $13,836 $13,908 $72
10 years $19,145 $19,343 $198
15 years $26,490 $26,902 $412
20 years $36,652 $37,415 $763
30 years $70,170 $72,373 $2,203


And...


Amount invested : $10,000
Annual return : 7.00%
Projected expense ratio is : 0.18%
What if the expense ratio is : 1.00%

Your investment returns over 30 years will be $14,938 less if the actual expense ratio is 0.82 percentage point(s) more than the projected.


Projected expense ratio
Actual expense ratio

0.18% 1.00%

Net market value after Difference
1 year $10,682 $10,600 ($82)
5 years $13,908 $13,382 ($526)
10 years $19,343 $17,908 ($1,435)
15 years $26,902 $23,966 ($2,936)
20 years $37,415 $32,071 ($5,344)
30 years $72,373 $57,435 ($14,938)

 

[DeadCactus]

Just to clarify, the lacking quality of the funds USAA runs is irrelevant to someone who buys Vanguard funds through USAA? Yes?

 

[dwb8p]

Just to clarify, the lacking quality of the funds USAA runs is irrelevant to someone who buys Vanguard funds through USAA? Yes?

Sure, you can trade non-USAA funds through a USAA brokerage account, but you'll be paying $12/trade each time when you could otherwise trade Vanguard funds for free directly through Vanguard.

I use a Wellstrade brokerage account to trade Vanguard ETFs because they give me 100 free trades per year (with assets > 25k).