Payday Loan Laws for People Enlisted in the Military
Active service members, veterans, and their families can borrow special military payday loans to help in a sudden financial crisis. Federal law has special regulations on payday loans and cash advances offered to members of the military and their families. Here’s what you can expect if you need to borrow a military payday loan to make ends meet.
Interest Rates Federal law places an interest rate cap on all military cash advances to protect familes from predatory lenders. The maximum interest rate a military payday lender can charge is 36% annually. This keeps payday loans affordable for the military families who depend on them. When searching for military payday loans online, make sure your lender charges only the federally allowed maximum or less. Some online lenders present themselves as military lenders but don’t follow the interest rate laws.
Hidden Fees By law, all lenders issuing loans to members of the military must fully disclose all fees and interest rates up-front. If you borrow a payday loan and discover hidden fees your lender didn’t tell you about when you first borrowed your loan, report your lender for fraud. Any hidden fees should be an instant sign to run in the other direction. Most payday lenders are honest, but some may try to get more money from you. Be alert and never borrow cash from a lender who charges hidden fees.
Pre-Payment Military payday lenders are also prohibited from asking for pre-payment on your cash loan. If your lender asks you to pay for your loan up-front, report that lender and look for a new one. No payday lender should ever charge any customer for their loans before the date that payment is due.
You can find legitimate military payday lenders by searching online and reading reviews from other military customers. Compare rates, reviews, and other features between lenders before borrowing and don’t forget to consider some other financial options you may have before taking out a cash loan.
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