• Military Payday Loans – How Do They Work


    It’s nearly impossible to find a reputable direct payday lender that offers loans to people in the military. We recently had a customer reach out to us that was active duty military with a discharge date that’s years away. He mentioned he wanted to find out if there was anything he could do to get a short term loan. We wrote him back and explained how the laws affected his situation. That said, this is a common question that’s asked of us. It’s tough to get a direct payday loan if you’re an active member of the military, and there are a few reasons for this.


    Can military members get direct payday loans?

    The consumer mentioned above had no idea about the laws affecting his chances of getting a cash advance. Even though he resided in Texas, a state with many direct lenders, he was not going to get too far because of the Military Lending Act. This Act states that payday and car title loan companies can not charge an interest rate on a traditional direct payday loan of more than 36% to active duty military members. In theory, this would be just fine. Even 36% sounds high for someone with bad credit compared to applying for a traditional bank loan or online car loan.

    financing options in the military

    Almost every reputable direct payday lender ceased offering loans to consumers and spouses in the armed forces when these regulations went into effect. The reasoning was that anyone looking for a direct payday lender has pretty much tapped out the normal ways of getting a loan. They say a cash advance is intended to be a short term emergency option for fast cash. Essentially there would be no way to make money on a loan if the rate is capped at 36%. That’s when you factor in overhead and loan defaults at current rates. These defaults are common in the payday loan and car title lending industry.


    It’s difficult to find payday loans for the military online

    These regulations went into effect years ago to halt high interest loans issued to those in the military who took out payday loans and cash advances. On the surface, they’ve done what they intended, as most direct payday lenders now have strict policies limiting loans to those in the military. That is, push large lenders out of offering loans to military members. Currently, no trusted companies in our list of direct tribal lenders provide this form of financing. As with government restrictions, these laws have created loopholes and other problems. Some companies that offer online payday loans seek to take advantage of the situation.

    Some small cash advance companies are now offering car title and installment loans. They claim these are not subject to the Military Lending Act. These lenders claim they’re exempt if they offer online loans for more than 91 days and the payday loan for more than $2,000. Based on these loopholes, these companies have skirted the Military Lending Act for years, but it looks like that will change soon. As of last year, the Department of Defense was actively considering making changes to the Lending Act. Prospective changes would close these loopholes and create new restrictions. The goal is to make it even harder for any company to offer a direct payday loan in FL to someone on active duty.


    You won’t be approved for military payday loans if you’re on active duty!

    It will be interesting to see how things play out with these proposed changes to military payday loans as we move through 2023. Reputable payday loan companies will stay on the sidelines as long as interest rates can’t exceed 36%. While that may seem good to some people, it also shuts the door on many consumers who need a short term cash advance. Essentially, there are no options for someone in the military dealing with a sudden financial emergency. Of course, you always get money from a friend or family member. There’s also the option of grants or loans from the VFW Assistance Fund, but the options remain limited.

    Direct payday and tribal loans with no credit check have always gotten a bad rap. But when used correctly, they can serve a purpose. It’s important not to fall behind on payments and contact your lender if you need to work out an alternate payoff plan. Unfortunately, these strict regulations are in place for a reason. Unless something changes, there’s nothing we can recommend for our visitor who emailed us.


    Direct loans payday loans for those in the military are nearly impossible to find.