Military Payday Loans Target Those Most at Risk
By J.J. CameronPayday Loan Writer
They fight for our country. They defend our freedom. And they’re rewarded by being victimized via the debt trap of various cash advances. That’s the basic conclusion reached by the Center of Responsible Lending in its critique of military payday loans.
In many ways, soldiers are ideal targets for these resources. They have a steady income from the government of just $1,200 per month for new recruits. At deployment time, when military families are faced with extra expenses at home and abroad, they’re more vulnerable to the promise of quick cash loans from online companies.
A recent report by the Consumers Union Southwest Regional Office confirmed that military personnel are an attractive target for payday lenders because they are young and financially inexperienced. Also, their government paycheck ensures that payday lenders have a steady source of income for repayment.
Furthermore, the payday loan industry targets those in the armed forces because …
- Stores are are located in close proximity to military bases;
- They use business names that imply a military connection (such as Armed Forces Loans and Military Financial, Inc.)
- Employ former military personnel who solicit soldiers for their business
Soldiers are often embarassed to admit that they owe money on payday advances. They may also face far more serious consequences than the average individual. For example, Failing to repay a payday loan is a violation of UCMJ Art 123a & 134, punishable by:
- Confinement
- Court martial
- Loss of security clearance
- Transfers to a different unit
- Discharge
It can be a dangerous investment. The Army Emergency Relief office at Fort Bliss, Texas, estimates that nearly 10% of the 10,000 active-duty military stationed there have needed financial counseling because of military payday loans and other debt problems.
April 12th, 2006 at 9:15 am
[…] You’ve read about military payday loans and why they’re often considered detriments to those hoping to benefit from them. The Navy has recently launched a website echoing this sentiment. NavyMoney.com is meant to offer advice to members of the United States Navy. It’s an alternative to the Navy Federal Credit Union. The site is aimed at giving financial advice - do you apply for a cash loan? What are the drawbacks? - to those entering the military. […]
April 27th, 2006 at 2:40 pm
[…] Therefore, they need full access to short-term credit products, including military payday loans, pawn loans and title loans against their personal automobiles. […]