Financial Blog

Personal Finance


    1. Never borrow more than you can afford.

    Do not borrow more than you know that you can pay back. Most lenders do not accept partial payments. You will accrue maximum fines and penalties if you do not pay the loan back when it’s due. Don’t apply for the most that you think they’ll give you. Decide beforehand what you can afford and apply for that amount.


Paying back on time saves not only fines and headaches, but could ultimately help raise your credit score in the long run.

Paying back on time saves not only fines and headaches, but could ultimately help raise your credit score in the long run.


     2. Avoid taking out loans with multiple lenders.

    The following is a situation that many people find themselves in. They need money in a hurry, and to get it, they apply for a short-term loan. Great, except, sometimes, the most a lender is willing to lend them is not enough to pay the bills that are staring them in the face. So, what do they do? They apply for a second loan with another lender.


Let this be a red flag warning. If you have a need to take out simultaneous, multiple loans with multiple lenders, you may have some serious financial issues. In fact, taking out multiple loans may make your situation worse. Statistics show that the more short-term loans that you owe, at the same time, the higher your risk of default.

Before obtaining multiple loans with multiple lenders, try borrowing from a family member or friend, or try making other repayment plans. They may add a fee or a penalty, but that’s likely to cause less of an issue than 2 or 3 loans at the same time.


    3.  Bookmark the website that you got your online, short-term loan from.

     If you’re like most people you will visit multiple sites before applying or you may even apply with multiple lenders, looking for the terms that are most advantageous to you. No matter your process, make a note or bookmark the site that you accepted the loan from.


You are likely to get a number of emails after you visit these sites, and It can get confusing in a big hurry. Keep track of the one you took the loan from and ignore the rest.


    4.  Piggybacking on #3, keep good records of your transactions.

    (By the way, this doesn’t just apply to your short-term loan process, it’s a good habit to get into for all of your financial transactions.)


Be organized about your transactions. Keep track of loan confirmations, terms, emails, contacts and any other information you receive from a short-term loan company. You never know when you might need to go back and prove something. Having a thorough record of your transaction will allow you to do so.


5.Don’t submit your personal information, such as your social security number to companies that are not OLA (Online Lenders Alliance) members.


The OLA requires its members (of which is a member) to protect the personal information submitted by customers using the most up-to-date, extensive methods of data protection available. Other lenders who are not OLA members may not do so. If you do not see the OLA logo, ask before you apply.


    6. Seek credit counseling help.

     If this is your first short-term loan application and it’s to help with a one-time bill, you may be fine. Although, and we don’t mean to sound like your Father, try to increase the amount of your savings so that this type of loan is unnecessary in the future.


But if this is not your first loan, or you have multiple short-term loans, it’s time to see a credit counselor. Now counselors come in all kinds of different packages, so we recommend this. There are non-profit agencies across the country that specialize in helping people who are in money trouble. Their services are usually free and as such provide the perfect place to start. They will absolutely have suggestions as to the actions that are best for you.

Do you have friends or family who has gone through this? Ask them what they did. Their advice is invaluable in helping you know what your options are.


    7.  Know who to contact if you think you’re being harassed by illegitimate debt collectors.

     You know as well as we do that scams come at us all time from everywhere. It only takes one scammer to get a whiff of your financial troubles, (and I speak from first-hand experience,) and they’ll be crawling out of the woodwork. We offer a couple of suggestions:


a.     Don’t contact anyone who you didn’t contact first. Scammers have gotten very good at looking and sounding as if they are legitimate. Of course, they will fall over themselves to convince you that they just want to help, but to repeat…if you did not contact them, do not give them any information and hang up that call or throw away that direct mail piece or delete that e-mail.

b.     Let your cell phone help you. Do you recognize the number calling? If not, do not answer it. Does it say Chase Bank or Bank of America for instance? We do recommend answering those calls if you owe them money. If not, ignore that call.


We hope that these tips will help you to navigate some of the pitfalls that exist in the online lending world BEFORE they happen to you.