In 2007, Congress instituted a 36 percent APR cap on payday loans, refund anticipation loans, and car title loans to service members, their spouses and dependents. The Military Lending Act (MLA) has helped reduce the number of military payday loans available outside of military bases, but some storefront and online lenders still manage to find ways around the law. And that’s bad, because according to a study by the Center for Responsible Lending, active-duty military personnel were three times more likely than civilians to use a payday lender or military cash advance service — and one in five had a payday loan. The study also noted that this wound up costing military families more than $80 million a year in fees!
NOTICE: The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal agency that administers compliance with this law concerning this creditor is the Consumer Financial Protection Bureau, 1700 G Street NW, Washington DC 20006 and the Federal Trade Commission, Equal Credit Opportunity, Washington DC 20580.
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A minority of mainstream banks and TxtLoan companies lending short-term credit over mobile phone text messaging offer virtual credit advances for customers whose paychecks or other funds are deposited electronically into their accounts. The terms are similar to those of a payday loan; a customer receives a predetermined cash credit available for immediate withdrawal. The amount is deducted, along with a fee, usually about 10 percent of the amount borrowed, when the next direct deposit is posted to the customer's account. After the programs attracted regulatory attention, Wells Fargo called its fee "voluntary" and offered to waive it for any reason. It later scaled back the program in several states. Wells Fargo currently offers its version of a payday loan, called "Direct Deposit Advance," which charges 120% APR. Similarly, the BBC reported in 2010 that controversial TxtLoan charges 10% for 7-days advance which is available for approved customers instantly over a text message.
If you are late on a payment, you usually have to pay a late fee. Lenders may allow a grace period of 10 or 15 days before they charge a late fee. Typical late fees range from $15 to $30, with some lenders charging 5 percent of your monthly loan amount or $15, whichever is greater. Some personal loan lenders do not have late fees. The fees for a returned payment and/or to process a check can be up to $15.
Typically, with a payday loan, you write a check to the lender for the amount you want to borrow, plus a fee for borrowing the money. The lender agrees to hold the check until the loan is due—usually your next payday. With your authorization, the transactions may be made electronically, with the lender making a deposit into your account and debiting the loan amount on payday.
Read all of your loan agreement. And make sure to ask questions too. Don’t just look at the interest rate for your loan, also look at the APR—this will include any additional fees that you’re being charged and will give you a better idea of how much the loan actually costs in comparison to other loans. If the lender cannot answer the questions that you’re asking them, then they are NOT a lender you should be working with!
Personal loans for Veterans who have served at least 20 years of active duty or who received a medical discharge are available through the Army Emergency Relief Program. Veterans who don’t qualify for this program may receive aid through USA Cares, a nonprofit relief organization. Other possible sources for personal loans for veterans include Air Force Aid Society and Coast Guard Mutual Assistance. Assistance may also be available through Armed Forces Foundation, National Veterans Association and Navy-Marine Corps Relief Society.
Apply online and get qualified for a personal, unsecured disabled veteran loan. These loans can be used for making home improvements, financing a small business, paying off a car note, or any other need. A disabled veteran loan provides veterans who were discharged under honorable conditions with cash for anything, whether it is to upgrade to a handicap accessible vehicle, or to repay old high-interest loans through consolidating the debt. Borrowers can even use a single loan for multiple purposes.
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When you have bad credit, obtaining new credit can be challenging. People with bad credit often find it difficult to get approved for a loan, as there is a limited number of lenders that offer bad credit loans. When people with bad credit are approved for a loan, there are typically higher interest rates, more fees and greater restrictions than personal loans for people with good credit.
States have varying regulations in place to protect consumers when it comes to short-term loans. Payday loans are illegal in some state, while other states regulate or restrict them. Lenders, online or otherwise, must comply with these regulations when they consider you for a loan, so the state you live in will play a part in whether you are eligible.
The CFPB has issued several enforcement actions against payday lenders for reasons such as violating the prohibition on lending to military members and aggressive collection tactics. The CFPB also operates a website to answer questions about payday lending. In addition, some states have aggressively pursued lenders they felt violate their state laws.
A 2009 study by University of Chicago Booth School of Business Professor Adair Morse found that in natural disaster areas where payday loans were readily available consumers fared better than those in disaster zones where payday lending was not present. Not only were fewer foreclosures recorded, but such categories as birth rate were not affected adversely by comparison. Moreover, Morse's study found that fewer people in areas served by payday lenders were treated for drug and alcohol addiction.