Short Term Christian Military Loans
Participating in short term Christian military loans may be a good temporary solution for military personnel who are experiencing financial difficulties. However, a long term solution needs to be developed for building financial stability. At times, emergency situations may develop which can throw even those who follow a strict budget into disarray. A new baby, unexpected car or home repairs, or sudden bereavement can leave those who serve in the armed forces without the funds needed to cope with monthly expenses. Travel expenses (to maintain contact with loved ones), medical or dental costs, and moving expenses are other common dilemmas faced by military families.
Sometimes, due to the circumstances of a military lifestyle, borrowers may not have the highest credit scores. Frequent deployments or reassignments do not allow for developing the stability that credit agencies seek. Glitches can prevent periodic paychecks from being available in a predictable and timely matter. Meanwhile, bills and late-payment fees mount steadily. Sometimes, for reasons beyond their control, military borrowers can find themselves ineligible for prime credit rates. Instead, those who serve in a military capacity often discover they are only eligible for sub-prime credit rates when applying for short term military loans. To be fair, sub-prime lenders are not always the predatory lenders they are assumed to be. In fact, one must remember that they at least provide borrowers in this situation with an opportunity to receive much-needed funds. By faithfully repaying such loans, the military borrower may be able to improve a credit score to the point where he or she is eligible for a better interest rate. Such loans can help keep a person afloat until finances improve.
Loans may be available for amounts ranging from $500 to $10,000 for certain military personnel. The amount of money available for borrowing usually is determined by the person's ability to repay the loan. This is measured by the borrower's income and present debts. Once the application and required paperwork has been submitted, a decision about short term military loans can usually be given in a day, and approved funds can be directly deposited into a stateside account within several days. If the applicant wishes, a check can also be mailed to a U.S. address.
Another popular choice for short term military loans is a payday loan. Most financial advisors look to this option as the least desirable solution because of the extremely high interest rates on these loans. Also, there is a great likelihood of becoming mired in ongoing debt due to the way these loans flip over if they are not repaid in a timely manner. Fees which are imposed in this case serve to make it even more difficult to become free of the debt.
Using a credit card or cash advance to fund short term military loans is only a slightly better answer to this dilemma. Interest rates, although much better than those imposed by payday loans, can still be significant, and balances can mount steadily. This is especially true if only the minimum amount is repaid each month. Minimum payments cover only slightly more than the interest costs, ensuring that the borrower will end up paying many times the original loan amount. Finally, the option of repaying only the minimum amount can be tempting to those who may find it easy to use the credit card for other 'opportunities' or 'emergencies' during the time they are trying to repay their original purchases. Without a fixed term, borrowers can find themselves in a debt cycle which never seems to end. At times short term military loans -- even those with higher interest rates -- will be repaid sooner due to the stricter terms and the undesirable prospect of having to pay such a high rate for a long period of time.
Other options for short term military loans can be found in a variety of places. Debtors can attempt to work out a payment plan with their creditors. Free or low cost consumer agencies offer financial counseling and help with designing a budget or arranging payment plans. Creditors are usually willing to work with those who seem to be sincerely trying to repay their debts. In this way, the lender may recoup more than the amounts surrendered by collection agencies. However, be sure to contact the lender at the first sign of trouble instead of avoiding the situation. This will assure lenders of the sincerity of the borrower's intention to repay the debt, and ensures that they will be more willing to work with the situation. Many religious institutions, faith-based groups and community organizations are willing to provide assistance with a short term emergency. Loans may be obtained from family members, but care must be taken to avoid creating additional problems by this solution. Uncomfortable situations can develop which strain close relationships when owing money is involved. In fact, many people would rather deal with paying high interest than disclose their financial problems.
No-credit-check short term military loans, which are usually for a smaller amount of money ($500-1,000), may provide a temporary solution. Although the terms are short, and the interest may be high, it is one possible solution for an emergency. Whatever solution is chosen, be sure to read and understand all terms and interest rates. Owe no man any thing, but to love one another... warns Romans 13:8. For long term financial stability, some type of emergency savings should be accumulated. Even if only a small amount of money can be put aside at a time, this is a step in the right direction. Shoot for a small goal at first, such as saving $100. Later this can be increased to $500, then $1,000 and eventually to an amount equal to two or three month's pay. Setting aside unusual gains, such as tax rebates or re-enlistment bonuses, can help a person arrive at the goal of not having to rely on credit in times of emergency.
Short Term Christian Cash LoansThe use of short term cash loans, or payday loans, to take care of financial emergencies is a controversial issue. The payday loan industry claims to meet a specific consumer need that is ignored by other lending institutions, such as banks and credit unions. Many people know, at some point in their life, what it is to experience a financial emergency. Perhaps the electricity will be cut off if the utility bill isn't paid by the end of the day. Maybe a child falls off his bike and his bleeding chin requires a trip to the emergency room. But the family doesn't have health insurance to pay for the bill. It could be that the transmission conked out of the family's only means of transportation. How will the breadwinner get back and forth to work unless the car gets fixed? Or the mortgage payment is due and the homeowners only have half the amount needed to make the payment. For each of these scenarios, and hundreds more, the affected persons may apply for short term cash loans to get over the current rough spot. The urgent need can make it difficult to look at the crisis without emotion clouding the situation. But this is exactly what the prospective borrower must do -- he or she must consider what options will address the crisis and which ones will have the least adverse affects.
The nature of short term cash loans differs from most other types of loans. A majority of loans are secured. This means that funds are given to a borrower based on a tangible asset which is used as collateral for the loan. For example, a house is a tangible asset which is the collateral for the mortgage. If the homeowner fails to make payments, the mortgage holder begins foreclosure proceedings and takes back the property. Other types of loans are unsecured. Also known as signature loans, this type of funding is most often based on the applicant's credit history and FICO score. A person who meets the lender's qualifications can borrow a certain amount of money without collateral because he or she has a proven track record of paying bills and has shown employment and/or residential stability. Credit cards can be classified as a type of unsecured lending. When credit card holders stop making the required payments, the credit card companies turn the accounts over to collection agencies. Revolving accounts such as credit cards usually aren't considered short term cash loans, even though some consumers may use them that way. For example, a consumer may make several purchases throughout the month using a credit card and pay the balance in full when the bill comes due. The consumer pays no interest because the balance is paid before the due date. In effect, the consumer has used the credit card as a short term loan. However, the consumer hasn't received actual cash.
Secured and signature loans are usually given for an extended period of time at a relatively low interest rate. But short term cash loans may have a term that only lasts a matter of days. For example, a payday loan may have a due date only two weeks or a month after the borrower receives the funds. The interest rate or fee may not seem like much, but calculates to an annual percentage rate that is astronomical. Some lenders charge interest rates and fees that end up with an APR of 300% or more. There are reports of borrowers paying what amounts to an APR of over 900%. The payday lenders promote how easy it is to apply for their loans. Almost anyone with a job and a bank account can get access these short term cash loans no matter his or her credit history or FICO score. The lender receives a check for the amount of the loan plus the interest from the borrower in exchange for cash. The lender then cashes the check at the end of the term. Or the lender gets an authorization from the borrower to withdraw the loan amount plus interest from the borrower's bank account on the due date. If the borrower can't make the payment, the lender may extend or roll-over the loan. This can create a borrowing cycle that is almost impossible to escape.
The payday loan industry and its supporters defend their practices. But God's Word has this to say about high interest rates: "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury" (Exodus 22:25). There may be a legitimate need for companies to short term cash loans to people in need of a quick financial fix. But that does not give companies license to trap borrowers into a loan that continues to grow despite their best efforts to repay the debt. Because of consumer horror stories, both Congress and many state legislatures have passed legislation in recent years to cap the interest rate and fees that payday lenders can charge their borrowers.
Before applying for short term cash loans, prospective Christian need to consider other options. If possible, they should apply for a small loan at a bank or credit union. If they have a credit card, they may want to get a cash advance. Even though that may mean an additional fee, it will almost certainly be less than the calculated APR on a short term payday loan. The situation may be eased by calling or talking to the creditor. For example, for the examples given above, the person may get assistance by talking to someone at the utility company, the emergency room's finance department, or the mortgage company. Everyone has financial emergencies, but the very best way to take care of them is to establish an emergency fund. It may be hard to find money to put away in a savings account designated for emergencies, but this is the best way to avoid falling prey to high interest predators.