Online Payday loans destroying my life help!

Payday loans– experts have been warning consumers about them for years. Not only do they charge exorbitant interest rates, but consumers frequently are sucked into a black hole of debt with endless payments. But now, there’s new player in town. Not only do you have to avoid the brick and mortar payday loan down the street, but the Better Business Bureau has also issued a consumer alert to any customer who is considering using an online payday lender.

Recently on our bankruptcy forum a user named Bonnie asked, “What are my options if I owe the payday lender $25,000, and there is no way I can ever repay the loan?” Bonnie is not alone. According to the Better Business Bureaus, complaints have been flooding their offices by the thousands from people who have received payday loans from sites such as,, and According to the BBB, All of these companies have an “F” rating.

Why do consumers use online payday services?

Unfortunately, getting a payday loan online can be easy. In fact, it can be as simple as providing a little personal information- SSA number, name, and bank account information. But many debtors do not understand the interest rates which are charged. Some horror stories have debtors getting socked for an effective annual interest rate of around 800 percent!

In fact, in states like West Virginia, where the state law caps the interest rate for payday loans at 18%, some online payday lenders are charging 600 to 800 percent APR, which is 45 times as high as the law allows.

How are they allowed to skirt the law? According to West Virginia Attorney General Darrel McGraw who has sued dozens of predatory online payday lenders, these companies have been able to avoid following the state’s consumer protection laws because they are located in states that do not limit the interest which can be charged for payday loans.

Buyer beware of online payday loans

Many consumers feel like an online payday loan may be the perfect solution, especially if they have exhausted other avenues and have been unable to get short-term loans, but online payday loans have long-term negative consequences. So what can you do to protect yourself from online payday loans? Understand what you are doing and avoid them.

Consumers who have been burned are here to warn others that these types of payday companies are not worth the aggravation and cost. Many of these stores are not regulated and may not have to follow state usury laws.

Options for online payday loans

Are there any online payday options available to consumers? According to the Better Business Bureau there are some online payday lenders who are reputable, but they are managed and run by familiar names with brick and mortar stores as well.

Bottom line:

Before you decide to give your personal information to someone online make sure it is a reputable business. Also, make sure you understand the interest rates that they will charge and how the loan will be repaid.

So what can Bonnie do? Declaring bankruptcy may be one option for Bonnie, but there can be serious consequences for such an important decision. Talk to a bankruptcy lawyer for more information.

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Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.