What is the maximum interest rate capped by the MLA for military members?

The Military Lending Act (MLA) is designed to protect active duty service members and their dependents from predatory lending practices. One of the key provisions of the MLA is the establishment of a maximum Annual Percentage Rate (APR) for certain types of credit offered to military members. The law caps the Maximum Allowable Periodic Rate (MAPR) at 36%.

This cap applies not just to traditional loan products, but also to various forms of credit, including payday loans and installment loans. The 36% MAPR includes interest, fees, and any other costs associated with the loan, which ensures that military personnel have a safeguard against exploiting high-interest loans.

Understanding this maximum limit is critical because it helps financial counselors guide military members towards safe borrowing practices and encourages compliance among lenders servicing military personnel. The goal is to ensure that military members are treated fairly and are not subjected to overwhelming repayment obligations.