MINNEAPOLIS (WCCO) — The Minnesota Commerce Department is urging unpaid federal workers to be careful with the risk in looking into short-term loans.

The major risks that can occur when borrowing from these lenders are that some are not licensed, interest rates and fees can exceed what the state law provides, and some of the lenders are operated overseas and may claim sovereign immunity, according to the department.

Commerce Commissioner Steve Kelly said that with the need to pay bills and make ends meet, federal workers should make sure considering short-term loans is the right choice, so they can avoid any mistakes that could add to their financial stress.

The Minnesota Commerce Department offered some tips to make sure when looking into a short-term loans — consider alternatives because short-term loans can be extremely costly, verify that the lender is licensed in Minnesota, make sure to read the fine print, borrow only as much as you are able to repay, contact local consumer credit counseling services.