Thursday, August 17, 2006

As a new military payday loan amendement makes its way to Congress, the Pentagon is throwing its considerable weight behind ensuring its passing. 

It has cites some of the worst cases and abuses of such pay day loans - among 3,000 case studies involving active duty military personnel - the armed forces has recently seen the Pentagon said:

• A U.S. Navy E-5 (Petty Officer, Second Class) began with three payday loans in March 2004 to take his family to visit his cancer-stricken grandfather. By October 2005, he had four payday loans, totaling $2,300 costing. him $600 every month just in rollover fees.

• An Air Force E-4 (Senior Airman) had faxless payday loans with two lenders, totaling $900 owed in principal. She paid $200 in fees each month to rollover the loans for seven months. When she entered financial counseling, she had other military installment loans, one for $7,000 with a 61 percent APR.

• A U.S. Air Force E-4 obtained a $500 no faxing payday loan that ballooned into a $10,000 loan with an annual percentage rate (APR) of 50 percent. The woman ended up paying $15,000 for the money and much more in a personal loss after the financial problems contributed to her divorce.

Just through this tro of examples, it's easy to see why army representatives would like to see changes made in current military payday loan laws.

This entry was posted on Thursday, August 17th, 2006 at 5:17 am and is filed under National.