As part of OLA's ongoing mission to educate consumers about short-term,
small-dollar loans, we are providing these tips to ensure that consumers are
well-informed before taking out a short-term loan. Ensuring responsible use
of online short-term loans is the responsibility of both the online lender and
Below are some tips for
educating yourself about the costs and risks of online short-term loans, as
well as who to contact in case you find yourself in a difficult situation and
need credit counseling, or if you feel that you’re being contacted by
fraudulent lenders or debt collectors.
borrow more than you can afford
Sometimes the unavoidable occurs – car repairs,
an unexpected illness, or other emergencies that take a bite out of our budget.
If you’re in a position where you find yourself in need of a short-term loan to
bridge a gap, be sure to find out exactly what you are going to be required to
pay back, when your payments are due, and how much those payments will be. If you know at the outset that you won’t be
able to make the payments, taking out a short-term loan might put you in a
worse position than you are currently in.
Avoid taking out loans with multiple lenders
Most responsible lenders cap the number of times a customer can
rollover a loan. Don’t try to get around this by using a loan from one
payday lender to pay off another. This practice can result in more fees and an
endless cycle of debt.
Get the most bang for your buck
If you simply
sign up for the first company you see online, you can end up paying more than
necessary. Comparison shopping online is
the smart thing to do when considering signing up for a payday loan. And
because the Internet has forced companies to make transparency a top priority,
why not shop for thebest possible company for the best possible price?
remember the web site you got your online short-term loan from
It is crucial that you know exactly where your
short-term loan is coming from. If you have
unexpected problems with paying your loan back, you should contact your lender
immediately to try to work out a plan that will allow you pay back the loan
without taking a new one or defaulting on the original loan.
any paperwork, emails, contacts, and other information you receive from a short-term
This information is equally crucial because it
will tell you the terms of the loan, when your payments are due, how much is
due, and who to contact in case you have problems. Be sure to keep all of this information in
one safe place so you have easy access to it in case you need it.
submit personal information like your Social Security number online
without checking the security of your personal information
Applying for an online loan requires you to
submit personal information including your bank account information. Look for
information on the lending website about protection and security of your
personal information. OLA encourages its members to display the OLA logo on
their websites so consumers can borrow with confidence.
a debt collection agency calls you, even if you recognize the debt, remember to
get the following:·
Amount of the debt
Name of debt collection
Name of the original
A call-back number to a
phone answered by a live person
Credit Counseling Help
If you find yourself in a situation where you
cannot afford your loan payments, get help.
There are a number of organizations that can help you with your credit concerns. The Community Financial Education
Foundation is a good source of information for consumer tips and budgeting
information. Click here to visit the site. Also,
the United States Justice Department lists approved credit counseling services
by state and judicial district at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm.
who to contact if you think you’re being harassed by illegitimate debt
Recently, the Federal Trade Commission shut down a company
that was calling consumers and threatening them over debt that had already been
paid back. If you think that you’re
being harassed by debt collectors over money that you don’t owe, immediately
contact the Federal Trade Commission to report the company, report it to the OLA Consumer Hotline at 1-866-299-7585, or report it online at
the OLA fake debt collector form.