Are pay day loans when it comes to armed forces appropriate?

Are pay day loans when it comes to armed forces appropriate?

The brief response is no. Loan providers are subject to the Military Lending Act (MLA) — a law designed to prevent loan providers from gouging personnel that are military exorbitant rates of interest and charges that include pay day loans, income tax reimbursement expectation loans and automobile name loans.

Active-duty armed forces users and military partners are protected under this act that will require:

  • A 36% limit on rates of interest. This limit is on rates of interest on loans with terms under 3 months. While nevertheless high, a 36% rate of interest is a lot more reasonable compared to the three-digit APRs that may come with a few short-term loans.
  • No mandatory waivers of customer security legislation. (more…)

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