When it comes to online lending, the numbers could be stacked against you. With so many online companies promising quick cash that won’t break the bank, it’s hard to know who to trust with your money. Because of this, it’s helpful to understand the dangers of online lending.

Even though online lenders promise short-term credit, it often comes along with sky-high interest rates and underhanded practices. Online payday loans are easy to receive, yet they’ll often require very personal information like a social security number and account number — that you’re expected to share over the Internet.

The concept of an online payday loan is that a customer will receive a loan in his or her account, then repayment is withdrawn at the time of your next paycheck. It seems simple enough.

However, according to a study done by The Pew Charitable Trusts, a payday loan’s average annual percentage rate ranges between 300 percent to 700 percent. That’s equivalent to paying close to $25 for every $100 borrowed.

Besides interest rates and APRs, you should be wary of aggressive collection practices in terms of repayment. Many borrowers have reported being hassled by debt collectors when it comes time to repay a loan. The online lenders also can engage in other aggressive practices, such as directly accessing your bank account to withdraw payment, leading to overdraft fees. And they have the benefit of doing this with near anonymity.

You should pay attention to with whom the online lending service might be doing outside business. Pew said that 39% of online lending customers reported that their personal or financial information was sold to a third party without their knowledge. This essentially means more unsolicited phone calls trying to get you to agree to borrow again.

How to Protect Yourself from Online Lending Fraud

There are things that you can do to make sure you don’t turn into the next horror story of a predatory online lender.

Choose a local business that has a Best Practices concept in place. This usually means that the company complies with full disclosure in terms of revealing all rates and fees that other companies may hide. Also, they have set a high standard for themselves in ensuring your borrowing safety.

Once you’ve established that an online lending company is legitimate, don’t give any money up front. A business that requires you to transfer money to them before they have delivered on their end is often a scam. This is also illegal.

As a final step to ensure that you won’t be scammed out of your money, make sure that you chose a local lender that has a license. This guarantees that the company is certified as a direct payday lender. You can also check Better Business Bureau as a reference for what type of experience other customers have had with this company before committing.

Need more information on what type of online loan might be the best option for you? Check out these tips about how to save money, how to effectively borrow money, and more. Not all online lenders have to be the bad guys.