What should I consider if I'm thinking about getting a payday loan online?

If you are considering an online payday loan, here are some questions to ask yourself:

• What is the total cost of the loan and can I afford it? They generally have large fees or interest rates and drain your cash in a short period of time.
• How will I repay the loan or make my payments? Online lenders may not take a check and may ask you to authorize automatic electronic payments from your banking account.
• What happens if I can’t repay the loan? Not being able to make your loan payments on time can result in significant fees. Your lender may offer a repayment extension, which may come with additional fees.
• Is the website an actual lender or a lead-generator site? Lead generators take your information and send it to a network of possible lenders. Lead generators might not find you the cheapest loans, and you should be cautious of sites that promise they will.
• Is the lender’s contact information – street address, phone number, and email address – easy to find on the website or loan application in case there is a problem later? It’s sometimes difficult for borrowers to identify and contact online lenders, especially if the borrower needs to revoke the electronic account access.
• Is this lender licensed in my state? You may have more consumer protections if the lender is required to be licensed in your state.
• Will the online lender or website protect my Social Security number, checking account number and other personal information? What are the privacy and opt-out policies? Can you restrict the site from selling your personal information?
• Will the online lender pull my credit report? Some online payday lenders will pull a credit report or seek other information from credit reporting companies before giving you a loan. They may want to confirm your identity or see if you have declared bankruptcy.

Any time you give out your sensitive personal and financial information on the internet there are risks. If you apply for payday loans online, you could be increasing that risk. Many websites advertising payday loans are not actual lenders, but businesses known as “lead generators,” which make money primarily by finding customers for lenders.

Lead generators will collect your information – including your Social Security and checking account numbers – and then send your request to a network of payday lenders. Your application will then be sold to the lender that offers to make you a loan. However, that may not stop other lenders or service providers from calling or emailing you.

It can be hard to tell if the website you clicked on is a lead generator or an actual lender. Lead-generator sites, however, often use certain phrases, including “matching you with lenders” or “connecting you with a network of participating lenders”.

If you experience an issue with a payday loan, you can submit a complaint to the CFPB online or by calling (855) 411-2372. You also may be able to get more information, as well as submit a complaint, from your state regulator or state attorney general .