Asset Recovery Kit (ARK)
How ARK Works
ARK provides a no-interest alternative to predatory lending. To date, the program has helped some 1,000 military families with nearly $500,000 worth of emergency loans and financial counseling from the highly regarded Consumer Credit Counseling Service.
Fees for predatory payday loans can be an astronomical $19 for each $100 borrowed until payday. Through ARK, one can to borrow up to $500 at a flat fee of only $6, with no interest, until the next payday. Contrast that with predatory lending fees of up to $95 for a $500 advance for two weeks.
ARK is a hassle-free, confidential, and smart way to deal with money problems.
- No credit report is pulled because those with emergency cash needs have already exhausted their options.
- No interest is charged – just a flat $6 processing fee. With ARK, you don’t fall further into debt.
- Immediate cash advances up to $500 (or 80% of net pay) are available until the next payday
- There’s minimal paperwork – just a simple one-page form
- It’s completely confidential – we don’t tell anyone who has come to see us.
- Up to five advances are available, but after the first ARK advance, the ARK user must sit down with a local Consumer Credit Counselor identified by the Foundation.
ARK was designed to be as easy as a payday loan, but without the negative consequences. The goal is to rebuild or repair credit, improve cash flow and increase money-management skills.
How does payday lending work?
Take the example of an E-4 who need $500 emergency cash until she gets paid in two weeks. She takes her military pay stub, photo ID and personal check post-dated for $595 to a payday lender near the base. The extra $85 is the fee for making the loan ($19 per $100 borrowed for two weeks).
At the end of the two weeks, the payday lender cashes the check. If the E-4 has continued financial difficulty, the payday lending will gladly refinance the now $595 loan for $613 and it just grows from there. Nationwide the average payday loan borrower, because of these rollovers, repays $793 for a $325 loan.
Kudos for ARK
The ARK program was reviewed and approved by the leadership of Consumer Federal of America, Armed Services YMCA, the National Military Family Association and the American Society of Military Comptrollers.
- ARK is not a for-profit program. The low $6 fee is priced at only the minimum required to cover the cover the cost of making the loan.
- While ARK offers low-cost loans, the ultimate objective of the program is to help military families better manage their money and their debt.
