Military Loans: Avoid the Payday Debt Trap
share this page
The Center for Responsible Lending estimates that predatory payday lending costs American consumers $3.4 billion per year in excess fees. The payday lending business model is designed to cultivate repeat borrowers. Rather than filling a need for short-term credit, payday loans trap borrowers in escalating debt.
In many ways, service members are ideal targets for these abusive payday loans. They have a steady income from the government, often with little to spare, at an average of $1,600 per month for new recruits. At deployment time, when military families are faced with extra expenses at home and abroad, they may be more vulnerable to the promise of quick cash from payday lenders. Although new protections are in place with the October 3, 2016 implementation of a strengthened Military Lending Act, troops are still tempted by these lenders.
Learn more about the problems with the payday loan trap.
Content provided by the Center for Responsible Lending.