Posted on Sep 12, 2015
Army makes it easier for Soldiers to recieve interest free loans (AER). Is this a good idea?
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Should Soldiers be allowed to recieve AER loans without Command approval?
http://www.armytimes.com/story/military/benefits/on-base/2015/09/12/army-makes-easier-get-interest-free-loans/72017260/
http://www.armytimes.com/story/military/benefits/on-base/2015/09/12/army-makes-easier-get-interest-free-loans/72017260/
Posted in these groups: 
Financial Services
AER
Financial Services AER
Posted 9 y ago
Responses: 8
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I have already dealt with this as a 1SG on multiple occasions and can say it seams to be doing well. Regardless of commanders approval, each Soldier still has to go through the vetting process. EAR still reviews the circumstances behind the loan and checks the actual need. What needs to be happening is more AER Grants instead of loans. Every year countless SMs donate to AER. AER utilizes this money to make loans, which get paid back through automatic deductions from SMs pay. So basically that money gets put back into the pot. The interesting part is how difficult getting a Soldier the AER Grant can be. Trying to get an AER grant for a SM can be like dealing with a Honey Badger.
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CW4 (Join to see)
Thanks for responding. It's good to see that the system is working. I'm unfamiliar with the AER grant process. Didn't even know that was an option.
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1SG (Join to see)
CW4 (Join to see) - A lot of people aren't aware SMs can get Grants for many of the things that they would normally request a loan. Which is why the AER pot just keeps on growing.
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I think it's a good idea, especially if they are using those loans to help them climb out from under a burden of debt or escape the clutches of payday lenders who can charge interest rates over 1,000% APR.
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I think it is a good idea. Soldiers with financial difficulties are less likely to go to their chain of command because of the fear of being punished. From the first counseling statement we tell soldiers to take care of their finances. We tell horror stories of financially irresponsible soldiers. That fear of asking leaders for help drives them off post to borderline criminal interest rates. No need to involve chain of command in the AER process. More will get the help they need, through fine-toothed-comb vetting and the money taken out of the soldier's pay. Good job on this one Army.
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Capt Seid Waddell
SFC (Join to see), I have seen the horror stories first hand.
I had an E-1 that bought a brand new Plymouth muscle car right out of Basic; it was the first time he had been away from his family and living independently. The local dealer gave him credit to buy the car and the kid was handing over his entire paycheck every month and didn't even have money to buy gas for it.
The dealer wouldn't take the car back or let him out of the deal until I got the JAG office to offer to put his dealership off-limits if they didn't take the car back.
If an airman gets in over his head financially they need more than just a loan to get straight with the world - they need a lifestyle change. Giving them money without the lifestyle change only digs a deeper hole.
Getting in over their head is a security risk; the wrong people can "help them out" in exchange for favors under the table.
I had an E-1 that bought a brand new Plymouth muscle car right out of Basic; it was the first time he had been away from his family and living independently. The local dealer gave him credit to buy the car and the kid was handing over his entire paycheck every month and didn't even have money to buy gas for it.
The dealer wouldn't take the car back or let him out of the deal until I got the JAG office to offer to put his dealership off-limits if they didn't take the car back.
If an airman gets in over his head financially they need more than just a loan to get straight with the world - they need a lifestyle change. Giving them money without the lifestyle change only digs a deeper hole.
Getting in over their head is a security risk; the wrong people can "help them out" in exchange for favors under the table.
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SFC (Join to see)
Capt Seid Waddell - Sir you are absolutely right. I would've made a similar comment, but was limited on time because Domino's was here and the pizza and wings were delicious. I was always just above water with my finances for a long time and managed to get by. It wasn't until I made a lifestyle change that I was able to get out of debt. Allowing soldiers to get interest free loans could and will be an enabler for some, but some will actually need it due to some unforseen hardship. You have to take the good with the bad but expect that everyone is legitimate. In reality most of the AER request could've been avoided with proper management of the soldiers personal finances by said soldier.
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Capt Seid Waddell
SFC (Join to see), you are right about the unforeseen hardships that can hit even the most prepared among us. I think that Command would take that into account.
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