Payday Loan Lowdown

I know I’ve written enough on this subject, but when it comes to your armed forces, nothing ever is enough. I mean, if your country is at war in different parts of the world and then you learn that our military preparedness is under threat, it does make you jittery, doesn’t it? A Defense Department study published last month found that members of the military use payday loans three times as often as civilians.

The worrying aspect is that fees for a payday loan can be high, averaging $15 to $30 for every $100 loaned. If a borrower does not pay back the loan by the next payday, s/he usually rolls over the loan, incurring another round of fees. Such fees can easily add up to an annual percentage rate of 400 to 700 percent. Payday loans have caught the attention of Pentagon officials and members of Congress, who worry that the high fees contribute to financial problems among military personnel. Washingtonpost.com reports:

While it’s bad enough for a civilian to fall deeply into debt, the consequences for members of the military can be far more severe, including the loss of security clearance or a court-martial. Those consequences make military personnel the perfect clients for payday lenders because they have extra incentive to pay back loans.

Read more: On Payday, Many GIs Pay Back

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