Military Son Denied Payday Loan

Q: My son is in the U.S. Army and needed to take out a no credit check payday loans for a bill he forgot about. However, once the lending company found out he was in the military, they denied his application stating it was illegal to lend to him. My question is why is this illegal? Also, I plan to take out a payday loan in my name so I can help my son. Is this all right to do since I am going to give the money to my enlisted child?

Thank you in advance.

Proud Military Mom

Anchorage, Alaska

A: First, thank you for your family’s sacrifice. Yes, lending to active enlisted service men and women is illegal. This was done during George W. Bush’s presidency in order to protect the troops from usury by high Annual Percentage Rate (APR) no credit check payday loans. The FY 2007 Military Authorization Act made these loans illegal. Not only are payday loans illegal, but vehicle title loans as well. This law was brought about after hundreds of military men and women were being targeted and taken advantage of with more than 800 percent ARP on some no credit check payday loans. The U.S. Department of Defense requested the White House do something about is ASAP. Therefore, the denial of your son’s application was the result of a restriction set in place to protect him and other military enlistees.

As for you taking out a no credit check payday loan in order to help with your child’s bill, be aware you will be paying over 500 ARP for a fourteen day loan. Also, in Alaska your maximum loan amount is $500 dollars or under. In addition, you will be facing fees around $15 to $20 and more, depending on your exact loan and the amount you take out. If you cannot pay back the loan on your scheduled date, you will be allotted only two extensions in your home state. However, these extensions come at a price. There will be more interest and additional fees attached to your original loan.

Therefore, if you are unable to take out a traditional loan from your local banking branch or a personal loan from a friend or family member, be sure you can afford to pay the no credit check payday loan back on time. Otherwise, you run the risk of being another payday loan statistic, which is caught in a cycle of mounting debt.

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