BBB warns of Online Payday Loans


BBB warns cash-strapped families to beware
of payday lenders that request your personal financial information online as a requirement
for loan approval. Consumers who shop for payday loans online face security and privacy
risks. If you are handing over your bank account information online to get a payday loan without
doing your research, you are setting yourself up to pay hundreds or even thousands of dollars
more than you bargained for. When looking for a payday loan online, BBB recommends consumers:
• Consider all options. Payday loans can be extremely expensive if you are unable to
pay off the loan quickly. The Federal Trade Commission recommends looking into a short
term loan from your bank, contacting your creditors quickly to explore payment options,
working with a credit counseling center or at the very least, shopping around for the
best interest rates and terms. Because of concerns with online lenders, try to find
a physical location and specific contact person before settling on a lender. • Always look
for red flags. Unscrupulous online lenders do not often provide their location or contact
information. Be cautious of any lender that doesn’t ask you for any background information
other than your bank account number. • Research the lender with BBB. Check any online
payday lender’s BBB Reliability Report at bbb.org before you hand over any bank account
information. BBB Reliability Reports are free-of-charge and will tell you how many complaints BBB
has received, how the company responded those complaints and BBB’s letter-grade rating.
For additional information and advice you can trust on payday lenders, start with www.bbb.org.

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