Life is a journey that is full of surprises, especially for military personnel. A drawback of serving in the armed forces is that, people who have been posted abroad find it impossible to maintain the track of personal finances. Hence, the members of armed forces suddenly find themselves short of a relatively small amount of cash. It takes place especially when the personnel is on a leave.
What is a Payday LoanA payday loan is a credit creation facility, that has been initiated by many banking and finance organizations worldwide. The basic principles of loan and credit creation are applied in this facility. However, there are some minor differences. A normal loan, is usually sanctioned for a particular purpose like, purchasing a car via car loan or a house via home loan. On the other hand, cash received through a payday loan can be spent by the borrower in any manner. The second difference is that the amount that is borrowed is relatively small and is a supplement for periodic income. This amount is normally returned on or after the payday, along with applicable interest rates. In cases of a higher amount of loan the time period extends, for more than one payday.
Payday Loans for MilitaryThe service of payday loans, that are availed by members of the armed forces, is different from the normal payday loans. In some banking organizations, different policies and loans have been arranged separately for members of armed forces. The online application process is same as that of a normal payday loan. However, sanctioning process is different and a bit faster. After the application form has been filled in by the personnel, rank and periodic income of applying, personnel is conformed with defense ministry. The credit history of applicant is however, not taken into consideration in order to maintain the prestige and honor of members of armed forces. The defense ministry and government act as guarantors for the borrower. The rate of interest of military payday loans is rather low. In some cases, the interest has been replaced by borrowing fees that remain constant irrespective of the amount of loan. Rate of interest, if charged, is subsidized and aided by the government. Upon the sanctioning of a payday loan, the entire amount is transferred to the account of the personnel applicant.
RepaymentThe rules and regulations regarding repayment of payday loans are very strict. A breach of contract with the lender or a very late repayment can invite a lot of trouble for the borrower. Code of conduct of the armed forces regarding financial matters is very strict. A late payment or default, is subject to confinement, clearance, transfer or even court-martial. The repayment procedure of a payday loan, for military personnel, is very simple due to the fact the amount that is to be returned to the lender, is directly deduced from his periodic salary. The transaction is at times completed by the accounts department.
The payday loan for military personnel is a very useful facility, but one must be very careful while applying and repaying the loan.
