Asset Recovery Kit (ARK) Loan Definition and Purpose
Please note: ARK Loans are available at AmeriCU’s Fort Drum, Lowville, and Watertown Financial Centers ONLY.
The Pentagon Federal Credit Union Foundation has partnered with AmeriCU Credit Union to offer an alternative to payday lending: Asset Recovery Kit (ARK) Loans. ARK Loans are a better alternative for solving financial problems than becoming ensnared in the trap of payday loans. Payday loans are an advance that allows a consumer to get a small amount of cash, for a high fee, on a short-term period against his or her next paycheck. It’s a quick and easy process, where consumers are not turned down due to bad credit. Typically, these lenders do not require much to get the process rolling. Payday lenders do not ask for a credit report, all the member needs is a current pay stub, a form of ID, and a signature on the document.
Unfortunately, these types of loans can become a debt trap in which the consumer will continually refinance their debt to the lender at an extremely high interest rate. APRs can range from 182% to 910%, and the fees range from $10 to $35 per $100 borrowed. People go to payday lenders because they cannot cover their bills; therefore, they fall behind each time they take a loan because of the high fees tacked on top of the principal. They find that have to go back again and the debt keeps growing.
Payday lenders often target the military with a high concentration of offices near military installations. Payday lenders like the stability of government paychecks, which ensures they’ll get their money back. The upheavals of military life can create financial stresses making quick fixes seem attractive and sending more people to payday loans. Some personnel do not see the financial trap they are entering. The sad fact is that 60% of security clearances are denied due to financial problems.
We believe that those who truly want to get out of debt deserve a chance at a sound financial future. ARK Loans are available to Active Military Members ONLY and ONLY at AmeriCU’s Fort Drum, Lowville, and Watertown Financial Center. You cannot apply online or over the phone. You must apply in person, and all subsequent advances must be in person.
How does ARK work?
- No credit report is pulled.
- There is a $6.00 application fee for the initial loan and for each subsequent advance.
- Most recent LES stub is required to apply.
- Loans will be available with a minimum limit of $100 and a maximum limit of $500; however, the loan amount or advance cannot exceed 80% of your net pay.
- Loans can be renewed four times after the initial advance (total of five advances in a calendar year).
- The loan will have a due date of the next payday (no longer than 30 days from the advance). If the next payday is less than five (5) days from the date that the loan application is requested, the payday after the next payday will be the due date.
- Loans are considered late one (1) day after the due date and a $5.00 late fee will be assessed.
- Attending FREE financial counseling at the ClearPoint Credit Counseling Solutions is required to get each subsequent advance after the initial loan advance.
- You must bring a copy of the Certificate from Clearpoint Credit Counseling Solutions as proof of the completed counseling before a subsequent advance can be taken.
- You should set up a direct deposit or auto transfer for payment. If you prefer not to do this, you must sign permission for AmeriCU to draw on an external checking account (ACH Origination Form).