With controversy swirling over whether or not military payday loans are helpful or harmful, the Department of Defense has come up with variety of resources to aid sailors in preventing financial disasters and curbing payday loan lender problems.
“Sailors are reluctant to utilize these resources, because they assume it will reflect negatively back at their command,” said Deborah Lane, financial education supervisor at the Fleet and Family Support Center at Naval Air Station North Island. “In actuality, sailors are encouraged by their commands to actively pursue financial well-being.”
Many in the armed forces are falling victim to businesses that profit from predatory payday loan lending. A recent survey by the Defense Manpower Data Center showed that 13 percent of sailors have used cash loans in the last 12 months, costing their families more than $80 million in fees a year.
Although there is no exact definition of predatory payday advance lending, the term is akinto abuse, including immense fees, excessive interest rates and outrageous insurance costs.
“These businesses prey on the financial fears of many military personnel," said Lane. “Predatory businesses promise troops generous rates, then abuse them financially.”