An increasing number of consumers are relying on payday loans to see them through tough financial times. Taking out one of these loans at the brick and mortar location of a payday lender is fraught with pitfalls, but those risks become even greater when the consumer chooses an online payday loan.

These online cash advances can seem like the perfect answer. The funds are made available almost immediately and no credit check is required. Unfortunately, the terms of most online payday loans are rarely straightforward.

Online lenders are great at making promises, but they usually don’t share a lot of concrete information. For instance, many of these sites do not post a privacy policy, nor have they enacted sufficient security measures to safeguard the consumer’s personal information. This means that highly sensitive personal information about the consumer, like their Social Security Number, address, bank account information and employment records, are all being transmitted over the Internet without proper encoding. The consumer is thereby allowing some of their most sensitive data to be leaked to a lender who may be engaged in shady business practices and also any third parties with whom the lender chooses to share the information.

It can also be difficult to deduce who the ultimate payday loan lender is. Many of these websites do not provide a physical address or a phone number. Many do not make it clear whether or not they are licensed to operate in certain states, nor do they properly disclose the annual percentage rates on the loans. In many cases, the percentage rate is commonly in the range of 625% to 780%. However, this fact is not made known to the consumer until after they have applied. By then, the payday lender has the consumer’s bank account information. This makes it easy for them to deposit the funds from the loan, but it also grants them access to remove money from the account as well. Some of these lenders will automatically renew the loan every payday, and make it virtually impossible for the consumer to stop the process.

Online payday loans often skirt state and federal laws and are known to take advantage of people who are struggling financially. If a payday loan is necessary, look for a lender with a real physical location that is more likely to be accessible for questions and complaints and less likely to disappear overnight.