Soldiers are no smarter when they're broke than anyone else
Quote of note:
Hardships like this are becoming more common in the military as high-cost easy-money lenders increasingly make service members a target market. As a result, many military people have become trapped in a spiral of borrowing at sky-high rates that can ruin their finances, distract them from their duties and even destroy their careers. The military, for its part, has done little to deny these lenders access to the troops, relying instead on consumer education.
Seeking Quick Loans, Soldiers Race Into High-Interest Traps
By DIANA B. HENRIQUES
Published: December 7, 2004
From Puget Sound in the Northwest to the Virginia coast, the landscape is the same: the main gate of a large military base opens onto a highway lined with shops eager to make small, fast and remarkably expensive loans, no questions asked.
…Getting the loan was fast and convenient, too. To borrow $500, they wrote a $575 check to the lender, to be cashed on their next payday, less than two weeks away. But in accepting that instant loan, the couple, who would talk about their experience only if their identities were not disclosed, were also agreeing to pay a staggering annual interest rate of more than 390 percent. By contrast, a loan from a credit union would have taken several days or longer but cost no more than 18 percent.
Repaying their fast-money loan took a big bite out of the couple's next paycheck, leaving them short when other bills fell due. So they borrowed again, and again, until they had raised about $4,000 through more instant loans, some of them with official-sounding names like Military Financial Network.
