Wherever they currently call home, military service members are sure to see advertisements and storefronts promoting payday advances and other types of short-term loans. Generally, payday loans are between $100 and $500. If service members are tight on cash, it may be tempting to get a short-term loan, but they should carefully consider the loan’s terms and conditions as well as other alternatives.
The interest rates for short-term loans are typically very high, so these types of loans can be hard to pay back immediately. Like other Ohioans, service members may struggle to pay off the balance while covering other expenses. If the loan is extended, consumers will likely be charged additional fees, resulting in higher amounts of money owed.
When considering a short-term loan:
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Shop around. Before doing business with a particular company, check for any complaints filed against it with the Ohio Attorney General’s Office and Better Business Bureau.
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Verify that a lender is properly registered or licensed by the Ohio Department of Commerce.
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Read and understand the terms and conditions of the loan. Check the payback dates and find out if you can make partial payments or if the loan must be paid off in one payment.
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Make sure you understand all costs, including interest rates. Be especially aware of any extension fees if you are unable to repay the loan within the original time period.
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If you don’t feel comfortable with the terms of a loan, walk away.
Also consider alternatives such as:
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Working with a nonprofit credit counseling agency
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Cutting back on expenses
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Going to a bank or credit union for a short-term loan
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Borrowing from friends or family members
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Contacting your creditors to create an alternative payment plan
If you suspect a scam or an unfair business practice, report it to the Ohio Attorney General’s Office at
www.OhioAttorneyGeneral.gov or 800-282-0515.