Short-term loans yield expensive consequences

  • Published
  • By Terry Stuart
  • 911th Family Readiness Office
PITTSBURGH AIR RESERVE STATION, Pa. --  Money doesn't grow on trees and with prices at the pumps, rising home energy costs and unplanned expenses our wallets are stretched to the max today.
Because of this, modern day loan sharks also known as pay day lenders will lend the equivalent of a paycheck to reservists for participation fees or interest totaling up to 700 percent interest on the amount borrowed.
It is entirely possible to fall behind and owe one of these lenders far more then what was borrowed. The good news is that in the future such lenders can only charge service members a maximum of 36 percent interest. This is a law that recently passed Congress in October so more details will follow.
The best case scenario is to have investments that give back the type of return equal to an amount borrowed.
Sensible financial planning is important to reservists, their families and to the Air Force. A reservist who fails to keep their personal financial matters in order is at risk for nonjudicial punishment, losing their security and in some cases may face discharge.
Members can take advantage of an existing law passed by Congress to get a free annual credit report. Credit works in the United States on the following principle: the better your credit, the less personnel will pay on a variety of loans.
By visiting the Family Support Office a reservists having financial problems can become educated on the best practices for credit management and elimination of consumer debt. Stop by or call the Family Support Office at 412-474-8544 today.