Rainy Day Offers Free Loans to Members of the Armed Services
The free alternative to payday loans is available immediately to active duty members
PORTLAND, Ore., April 6, 2015 /PRNewswire/ -- Rainy Day Capital announced today a program to provide free loans for active duty military service members. The loans will be available immediately through the Rainy Day website.
"We see this as a real win/win," said founder Hayden Hamilton. "Military members get access to a useful tool that can help them manage unexpected expenses without creating a debt trap, and we get to help solve a problem that hopefully makes the world a little bit better, which is a big part of why we started Rainy Day."
Currently there are few short-term loan options available to active duty Armed Services members and their families. The Military Lending Act of 2007 effectively eliminated payday loans and other short-term lending options for military members. Prior to the 2007 law, the DoD estimated 17 percent of military personnel used payday loans.
Rainy Day was founded in 2013 to create an affordable alternative to payday loans. The service is designed to provide a much needed tool for managing cash flow to avoid NSF charges and late fees, while eliminating the high interest rates and debt traps associated with payday loans.
Rainy Day's loans are very different than other short-term lenders. Rather than charging a large fixed fee upfront, Rainy Day charges a flat $1 a day, which as of today will be waived for active duty military members. Rainy Day also provides 20 fee free days per year, five per quarter, for non-military members.
A slider on the Rainy Day site illustrates the dramatic difference in fees. In California, an eight-day loan for $250 with a major payday lender costs $44.17. With Rainy Day, the maximum fee is $8 and it could be as low as $0 if the borrower pays it back early, and will now always be $0 for members of the military.
Rainy Day uses some of the microfinance practices pioneered by Grameen Bank in Bangladesh, but utilizes social networks instead of village networks as a risk management tool. The site requires a Facebook account to apply for a loan and relies heavily on the recommendations of current Rainy Day members.
For more information please visit www.rainyday.org.
SOURCE Rainy Day Capital, LLC
Share this article