Online Payday Loans for Veterans and Military Spouses
There are about 21.8 veterans in the U.S. and of these veterans, 453,000 are unemployed and 39,471 are homeless. Unfortunately, many veterans face harsh financial realities that necessitate shorter-duration funding such as payday loans. In fact, almost 1.5 million veterans live in poverty in the United States.
Cash advances in the form of payday loans may provide financial relief to veterans who may be having trouble making ends meet or find themselves in emergency cash situations. Let’s look at the advantages and disadvantages of payday loans for veterans.
How do Payday Loans for Veterans Work?
Payday loans are short-term loans that are taken out against borrowers next paycheck. Loan amounts can range from $100 to $1000 and loan terms are two to four weeks, on average. Borrowers are typically required to repay full loan amounts, plus interest, at the time of their next paycheck.
Eligible consumers can apply for a payday loan online from a direct lender. The application process can take anywhere between 15 and 60 minutes. While the information needed may differ from lender to lender, most payday loan requirements include:
- Form of identification that shows proof of age and residency
- Proof of income
- Banking information
- Social security identification
Shorter-duration funding is available to military personnel, veterans, disabled veterans, and military spouses. Those who fall under such categories may find it difficult to have access to conventional financial institutions that offer more traditional loans.
Online loan lenders will consider an applicant’s credit score and history, as well as their debt to income ratio to determine approval. This means that payday loans for military personnel without a credit check or online payday loans for those with bad credit are rare and unlikely. Those who may be struggling with poor credit or have alternative modes of income such as VA benefits or disability payments, are still eligible to apply for a payday loan for millitaries and can apply to see if they are approved.
Other non-conventional forms of income may include child support wages, royalties, self-employment income, social security benefits, and the like.
While instant approval payday loans are not likely, once an applicant is approved, funds can be deposited within one to two business days.
Veteran Payday Loans Risks
Payday loans can carry high-interest rates and steep rollover fees. In some states, short-term loans can have interest rates of more than 300%, often causing borrowers to roll their loans over and incur steep fees. Reports have found that more than 80% of payday loans are rolled over and that 70% of borrowers use their loans on recurring expenses, rather than on short-term emergency cash needs.
Such high-fees and rollover rates can trap borrowers in cycles of debt. For military personnel or veterans who may already be in precarious financial situations, expensive payday loans may not be the most viable option. Financial experts advise consumers to only take out short-term loans after exhausting all other loan options and to be sure to borrow within their means.
Making a budget and cutting expenses can also reduce the need to take out a short-duration loan.
Alternatives to Short-Term Loans
While some lenders may be able to provide affordable payday loans for veterans, consumers who want alternative financing options can consider the following:
- Financial Assistance Programs: Many local and federal organizations have debt assistance programs for struggling veterans. Veterans and active military members can visit a federal aid website to learn more about the relief options that are offered. Bills such as the Servicemembers Civil Relief Act (SCRA) also provide financial protection to those who are actively serving.
The U.S. Cares Emergency Assistance Program is another resource that helps veterans who are struggling to cover basic monthly expenses such as utility bills and rent charges.
The American Legion Temporary Financial Assistance is another program that offers cash grants to military families and is specifically aimed at providing stability and support to children of those who have served or are serving.
- Paycheck Advance: Veterans who are working upon their return, can consider asking their employer for an advance of their upcoming paycheck in order to make ends meet.
- Borrowing from trusted friends and family members: Those who wish to stay away from financial institutions can borrow money from those closest to them.