Too good to be true: Predatory lenders target veterans and military

Eric Dehm
February 15, 2019 - 12:26 pm

Photo by Mary Davis U.S. Army Garrison Rheinland-Pfalz

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There are times when you need money that you don't currently have. Whether it's due to an emergency, launching a new business, buying a car, or any other instance where an influx of cash is necessary there are many options available to get the funds, but some are not what they seem.

One option is what has been termed "predatory lenders." These businesses are more than willing to give you the money you need, but according to Syracuse University's Institute for Veterans and Military Families (IVMF), it can have long term consequences.

"What we often see is decisions made for short-term lenders are made while folks are in service," says IVMF Sr. Director for Research and Evaluation Nick Armstrong. "And that, often, bad decisions that are made carry with them post-service and effect things like their credit score or ability to launch a new business idea."

So who are the predatory lenders and how do you spot them? For one, terms that seem too good to be true. According to IVMF, any business that advertises a guarantee that you will not be denied for credit is a big red flag, and is often a precursor to a very aggressive approach.

"You're in a relationship with your lender, so look at it like that," says IVMF Director of Entrepreneurship and Small Business Misty Stutsman. "You see a lot of these predatory lenders, if you put in your e-mail, next thing you know you're getting 3 e-mails a day and six pieces of mail. If that was a person that's calling you 3 times a day and sending you 27 text messages, you would cut them off, so why are you going to do business with someone like that? Look at your terms, look at the 'too good to be true' and treat it like a real relationship."  

Stutsman and Armstorng both say it's important that military and veterans do their own research into lenders, but they also highly recommend reaching out to veteran organizations like IVMF with questions about securing funding before getting into bed with any lender.

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