Frequently Asked Questions

What is OLA?

OLA is the premier industry trade association of online companies that provide short-term loans to customers. Further, OLA establishes industry best practices standards and works with policymakers to ensure consumer’s choice and access to short-term loans are protected.

What resources does OLA provide for consumers?

OLA serves as an educational resource for consumers by keeping them up-to-date on industry news.

What type of companies form the Online Lenders Alliance?

The Online Lenders Alliance consists of several member companies ranging from short-term lenders to lead providers to other vendors who assist in providing short-term consumer loans to individuals who need access to cash.

Who uses online loan services?

Our customers are your friends, neighbors and relatives. They are hard working Americans who for more than 20 years have turned to short-term loans when faced with tough economic times and needed access to cash to help them make ends meet. They are mostly middle-income, mature adults who work full or part-time. They believe that their access to short-term loans is a personal choice that should not be taken away by the government.

How large is the online loan industry?

The online industry provides short-term loans to over 12 million customers annually.

Are lenders regulated?

Yes, OLA members are both regulated and self-regulated. All members are also subject to state and federal regulations, including the same Truth in Lending guidelines as banks and credit unions. All members adhere to the Code of Ethics and Best Practices established by OLA.

Why do people choose to use online lenders instead of banks or credit unions?

An overwhelming majority of users of short-term loans are experiencing a temporary financial crunch, due to unexpected expenses such as medical bills or car repair. They may be underserved by banks or credit unions, who usually do not offer low limit, short-term loans. Borrowing from a short-term lender is cheaper than paying reconnection fees for unpaid utilities and bank fees for bounced checks. They may feel they would be unable to qualify for a loan because their credit score is not sufficiently high enough. Sometimes, customers need a loan in a hurry, and banks are not always able to make the loan within 24 hours.

Why is there so much misinformation about the short-term loan industry?

Some so-called “consumer advocacy” groups continue to spread bad information about the short-term loan industry. They use unflattering terms and put out misleading information about the industry in an attempt to influence policy makers and outlaw short-term credit solutions. In doing so, they put their own self-interests ahead of consumer’s needs and freedom of choice.

What is the difference between store front and online lenders?

A storefront or brick and mortar lender is typically seen in any city. They usually require a post-dated check, made out for the amount of the loan plus fee. On the borrower’s next payday, the check is deposited. An online lender does business on the Internet. After the loan is approved, the lender transfers money to the borrower’s checking account and receives payment through Automated Clearing House (A.C.H.) withdrawals from the borrower’s checking account.

It’s been said in the press that short-term lenders charge an annual percentage rate of over 400%. Is that true?

This is an area where the media or some other entity presents our fees in such a way that it misinforms the public. Short-term lenders charge fees, generally $15-30 per hundred borrowed. If the banks and credit unions convert their fees for insufficient funds to A.P.R., you’d see something in excess of 900%. A short-term loan is just that… short-term. It is not designed to be a long-term solution, rather it is designed to help people confront a temporary financial problem and be paid off on the borrower’s next payday.

What is full disclosure?

Full disclosure means that the lender is being open and honest about the fees they charge and the process by which the loan is made. Every borrower knows upfront about the fees and is crystal clear about all aspects of the loan.

How can I be sure that short-term loans are legal in my state?

OLA recommends that its members be licensed in every state in which they make loans and requires compliance with all applicable state laws concerning the loan industry. To be sure, visit your state’s website or call the state’s Attorney General’s office.

How can I be sure my information is safe when I apply for a loan?

Every OLA member company protects its customer’s personal information to ensure that it is save and secure. Our members understand that identity theft is a real problem and take steps to safeguard that information.

How do online lenders help consumers with long-term financial objectives?

While online lenders provide a short-term solution to a temporary financial crisis, we realize our responsibility to helping consumers with overall financial health. OLA members do this by providing referrals to credit counseling and resources for financial education and assistance.