Online lenders and cash advance apps, A to Z

Some websites collect your loan request, then sell it on to lenders rather than giving you the loan themselves. That kind of site is called a lead generator. The CFPB says lots of loan sites operate like this, handing your application off to a whole network of lenders. When you see language like "matching you with lenders," that is usually a sign the site is a lead generator.

Sites like these gather your Social Security number and checking account details and then sell the request on. We suggest caution with any site promising to find you the lowest-cost loan, since a lead generator may not actually do that.

The CFPB has also said a lead generator can break federal law if it pushes you toward one lender simply because that lender pays it a bigger fee.

Companies that never lend a dollar can end up holding your personal details. In one case, the FTC alleged that ITMedia, which generated loan leads, sold 84 percent of loan applications to businesses that were not lenders at all. To settle, ITMedia agreed to a $1.5 million civil penalty.

Back in a 2017 case, the FTC said a different lead generator, Blue Global Media, sold very few of its loan applications to actual lenders. If you already shared your details with one of these sites, call us and we will map out your next step together.

With an installment loan, you pay back a borrowed sum through fixed payments spread over a set period. Per the CFPB, these loans run anywhere from a few hundred dollars up to several thousand or beyond. Since plenty of online lenders offer them, the repayment schedule and total cost deserve just as much attention as the size of the loan.

Your protections may be stronger if the lender has to be licensed where you live, according to the CFPB. Payday lending is not legal in every state, and some states permit it only for licensed lenders.

1. Look the lender up through NMLS Consumer Access, which costs nothing and shows whether it holds a license in your state.
2. Check with your state regulator as well, since NMLS does not list every kind of license in all states.

Certain online lenders connect themselves to a tribe and put tribal law into the loan agreement. A federal appeals court, in CFPB v. CashCall, concluded this choice existed only to get around state interest rate caps and state licensing requirements, which meant state law governed. Although the loans held up under tribal law, they failed under the borrowers' state laws, either because the rates exceeded the limits or the lender lacked a state license.

That court also described what it called a "rent-a-bank" arrangement, in which a lender uses a bank's exemption from state rate caps. Regulators once set a rule on when a bank, rather than its partner company, counts as the real lender, and Congress voted it down in 2021, so ask who actually made your loan. Not sure who really made your loan or which rules protect you? Call us today. A specialist will help you sort it out before you sign anything or make another payment.

Active-duty members of all branches fall under the Military Lending Act, and so do their spouses and, in some cases, their dependents. If you're covered, a loan's total yearly cost, fees and interest together, can't top 36%. Lenders call this the MAPR. The federal rule applies the same 36 percent ceiling.

Coverage extends to payday loans, overdraft lines of credit, and most installment loans. Lenders also may not make you accept arbitration, where a dispute gets settled privately rather than in a courtroom. Some lenders whose rates exceed the cap will simply turn you down.

Consider Sam, a made-up example rather than a real person: he is an active-duty sailor shopping among online lenders. One site says it is "matching you with lenders" and wants his bank account number. That phrase usually means the site isn't a lender at all, just a middleman selling his details. Before he types in his account number, Sam can look the company up for free on NMLS Consumer Access, and whoever lends to him can't charge more than 36% a year, fees included.

A big complaint total does not necessarily mean one company treats people worse than another. As the CFPB notes, larger companies may rack up more complaints just because they serve more customers. Complaint counts need context. If you're unsure what you've found or who has your application, call now to talk through your options with a specialist.