To call the majority of loan companies that set up shop around military bases parasites is an insult to parasites. Not every business that loans to military service members should be classified that way and this article will address the two major choices that young service members have as older more established service members have many more options.
Near every military base are businesses that will loan money to service members. The majority of these places have one target in mind and that is the young service member who has a job and no credit history. The service member also wants things like a car, a stereo for the car or special wheels for the car. Some, who start families much too young considering what the most junior enlisted personnel get paid, need furniture and home entertainment systems. As long as there are young military service members who want and need these things there will be those who try to make a buck off of them and while they may do so legally, it borders on immoral and unethical behavior and they have very little love or respect from the military establishment and the senior enlisted community of each service.
The problem with many of these firms is that they charge a very high interest rate, in some cases it is over 30 percent and a few cases have been shown to be over 50 percent. These firms charge these high rates and can get them due to lax state and federal laws and because these young service members have no credit history but also have a desire to have the things that the money will buy.
An additional aspect of these high interest charging firms is that they are often joint ventures with car and furniture rent-to-own firms that overcharge for the product. In many cases, the young service is caught two ways and it is no small wonder that many young service members have financial problems. Some of the car dealerships located around military bases have even been known to sell, repossess and then sell the car again to yet another unwitting service member who could just as easily have that happen to him or her also. While this may seem to be a car dealership issue, more often than not, there is a finance company directly associated with one or more car dealerships and they generally work very closely together to the detriment of the service member.
So what is a service member to do? Fortunately for the military service member there are alternatives! Associated with virtually every base is a Federal Credit Union where it is possible to set up an account so that the service member is able to establish credit, get a loan at much more reasonable rates and also obtain some much needed financial advice and education. Almost every base also has a “Service Center” that holds training sessions on financial planning that is not a sales pitch. Instead, they warn young service members about the financial pitfalls that await them outside the gate.
The military establishment and the senior enlisted leaders of every military unit also give routine training and advice on how to stay out of financial trouble. Unfortunately, not every service member heeds this advice and thus the lending parasites that feed off of young service members continue to thrive. In the end, the best advice is: “let the buyer beware!” All the military can do is warn their youngest members about the dangers and see who survives the financial minefield that is right outside the base!