If you are a member of the military who needs a payday loan, be sure to read this entire article.
A payday loan is a short-term loan, based on a borrower’s pay check stub or future deposit, such as a direct deposit from an employer. In your case , this is the federal government. Payday loans range from $100 to about $1,500 and last for only about two weeks. Typically, the amount is limited to about half of your paycheck. They can sometimes be extended for an additional fee.
The payday lender will charge a high interest rate when computed as the Annual Percentage Rate (APR). A payday loan is a way to get quick cash in an emergency. It should be used after you have tried other ways of borrowing or getting cash such as asking friends or relatives, or selling some possessions.
People in the military form a distinct demographic category for payday loan lenders. They are, by definition, employed and receiving a regular, guaranteed biweekly paycheck deposited directly into their bank account. Most members of the military, if they live on a military base or serve over seas – have most of their basic living expenses paid for them. This gives them good free cash flow.
These characteristics make them very attractive to payday lenders. The loans are much more likely to be paid back on time. The military justice code also provides for penalties for members of the armed services that do not meet their financial obligations.
It pays to shop around for rates on a payday loan. Most sources will have special military rates. Ask your buddies in your unit about who has the best deal. It’s a good bet that you are not the first one to run out of money before the next paycheck.
You will, of course, have to show proof of service, and provide checking or savings account information.
Due to the high rates and heavy fees imposed by payday lenders on customers, the federal government, in 2007, imposed strict limits on military payday loans. The new laws imposed a limit of 36% as calculated by the Annual Percentage Rate (A.P.R.) for all loans to the military. In addition, payday lenders cannot require a post dated check nor access to the borrower’s checking account.
Military pay day loans are also offered online. Some lenders only require only that you are at least 18 years old, are currently on active duty, and have a checking account. The same cautions apply to getting your military pay day loan online.