Listen up. Have you tried to get a payday loan lately? Do you plan to rely on a payday loan or refund anticipation loan to pay your holiday bills early next year?
A law that took effect Oct. 1 changes all that. Payday loans, vehicle title loans and tax refund anticipation loans to military personnel and their family members cannot carry an interest rate of more than 36 percent.
As a result, many lenders who offer these types of loans are choosing not to do business with service members. If you're relying on these loans or think you will in the future, you need to consider other alternatives.
When you need money, defense officials advise you to check out your on-base credit unions and banks, and military relief societies.
For real financial emergencies, the military relief societies — Army Emergency Relief (http://www.aerhq.org), Navy-Marine Corps Relief Society (http://www.nmcrs.org), Air Force Aid Society (http://www.afas.org) and Coast Guard Mutual Assistance (http://www.cgmahq.org) — are there to help military members with interest-free loans or grants to those who qualify.
Understanding that speed and convenience are two main draws for a payday loan, the Navy-Marine Corps Relief Society has started a new program called Quick Assist Loans for sailors and Marines at six California bases, with interest-free loans of up to $500 in as little as 15 minutes. That means you borrow $500, and you pay back $500.
All you need is your most recent Leave and Earnings Statement and your active-duty ID card. Relief Society staff members don't have to check with your commander; it's confidential. Family members are not eligible.
Like all the society's loans, these are designed to help with basic living expenses — housing, utilities, food and clothing, medical or dental care, vehicle or transportation costs, or to help during family emergencies.
The program was tested in April at the society's offices at Marine Corps Air Station Yuma, Ariz., and Naval Submarine Base New London, Conn. It was so successful that it's been expanded to five other California locations: Camps Pendleton and San Onofre, Marine Corps Recruit Depot San Diego, Marine Corps Air Station Miramar, Naval Air Station North Island and Naval Station San Diego.
"The hope is to open it up across the board," society spokesman John Alexander said.
The trend now is for military banks and credit unions to offer small loans at reasonable rates — for the most part, annual percentage rates of 18 percent or less — over a longer period of time than the typical two-week time frame for payday loans, with low or no origination fees.
"Financial institutions that want to compete with payday lenders understand they need to ... cut down on paperwork and be responsive," said Andrew Egeland Jr., president of the Association of Military Banks of America.
It's not possible to list all the programs offered by military banks and credit unions in this space, but here are eight other less-expensive loan alternatives:
• Pawnshop Buster Loan, at First Light Federal Credit Union, Fort Bliss, Texas.
• Quick Cash, Langley Federal Credit Union, Langley Air Force Base, Va.
• Asset Recovery Kit, Pentagon Federal Credit Union branches at Pope Air Force Base and Fort Bragg, N.C.; and Fort Stewart and Fort Gordon, Ga.
• Fast Funds, First Flight Federal Credit Union, Marine Corps Air Station Cherry Point, N.C.
• Pay and Save, Vystar Credit Union, Naval Air Station Jacksonville, Fla.
• Flash Cash, Fort Hood National Bank, Fort Hood, Texas.
• First Loan Program, Eisenhower National Bank, Fort Sam Houston, Texas.
• Second Chance Lending, Tinker Air Force Base branch of First National Bank of Midwest City, Okla.
Developing these alternative loan products is a priority for many banks and credit unions, said Egeland and Roland Arteaga, president of the Defense Credit Union Council.
Both stressed that there is no guarantee everyone can get a loan. "But the issue here is if they need help to get out of debt, I think they'll get it," Arteaga said.
There are also simple strategies for taking matters into your own hands. For example, try to build an emergency fund of at least $500, even if you add just $5 per week. It ensures peace of mind when you know you won't face a desperate search for an emergency loan.
Plan your spending, especially with the holidays approaching. Save a few bucks each week, and buy a present or two along the way as you find good deals. Try to avoid the stress of a pile of bills after the first of the year that in the past might have led you to seek out a costly, quick-fix loan.
Got that? You're good to go.