Help us improve our website by participating in our site survey.

Are Online Loans Safe?

If you are in need of short-term cash, online loans may seem alluring with claims of getting cash fast, all from the comfort of your own home. Before you take the bait and apply for an online loan, keep in mind that these loans come with many risks and can end up being very expensive.

It is important to carefully consider all your options for obtaining short-term cash. Does your bank or credit union offer short-term loans? Would your employer consider giving you an advance on your next paycheck? If you decide that an online loan is the best option, be aware that many online lenders are unlicensed. These unlicensed lenders are making illegal loans, which are often much more costly, as maximum allowable rates are exceeded and additional fees are not disclosed.


Avoid falling for an unlicensed lender by following these tips:

Verify the lender is licensed to make loans in Colorado by searching the Licensed Supervised Lenders List

  • In order to become a licensed lender in Colorado, the lender must provide specific information to determine if the company complies with Colorado's lending laws.
  • Licensed lenders must follow Colorado payday lending laws, which set allowable loan rates and fee limitations.

Don't share your personal information without doing research on the company

  • Even if you fill out the online form but do not hit submit, your information may have already been captured by using keystroke logging.
  • Some companies are actually lead-generators and not lenders, meaning your personal information may be sold to several third-parties lenders.
  • Check the website for a privacy policy. Does it disclose how your information will be shared or protected?

Protect your banking information

  • Setting up automatic payments with an online lender may seem convenient, but you could be allowing an unlicensed company access to your bank account, making multiple unauthorized withdrawals.

Find out if the online lender has a physical location

  • Lenders that do not disclose a physical location are often unlicensed and could even be operating outside of the country.
  • If the website does not have a “Contact Us” page, try searching the website’s privacy policy or terms & conditions, often found at the bottom of the homepage.

Read and understand the loan agreement

  • Does the loan specify that Colorado law applies? A company must be licensed by the State of Colorado in order make loans to Colorado consumers.

If you believe you have been a victim of an unlicensed online lender, please file a complaint with our office.