Active-duty military: payday lenders cannot charge you more than 36% APR.
The Military Lending Act (MLA) provides special protections for active-duty service members, their spouses, and dependents. Payday lenders are prohibited from charging more than 36% MAPR (Military Annual Percentage Rate), effectively making most payday loans unavailable to covered borrowers.
What the Military Lending Act provides
36% MAPR cap
All fees, charges, and premiums are included in the 36% cap. This effectively prohibits most payday loans to covered borrowers since typical rates far exceed 36%.
No mandatory arbitration
Lenders cannot require covered borrowers to waive their right to sue or submit to mandatory arbitration.
No mandatory allotment
Lenders cannot require military borrowers to set up an allotment (automatic paycheck deduction) as a condition of the loan.
No rollover penalties
Covered borrowers cannot be charged prepayment penalties and cannot be required to roll over or renew a loan.
MLA applies to active duty and dependents
Active-duty service members
All branches: Army, Navy, Air Force, Marines, Coast Guard, Space Force, and activated National Guard/Reserve members.
Spouses and dependents
The MLA also covers spouses, children, and other dependents of active-duty members.
Veterans and retirees
The MLA does not cover veterans, retirees, or inactive Reserve/Guard members. These individuals are subject to standard state lending laws.
Balance On Hand is a cash-flow planning tool. It is not a lender, loan servicer, or financial advisor. This page is for general educational purposes only and does not constitute legal, tax, or financial advice.