Remember
- Legitimate lenders do not make you pay a fee before you get a loan. The FTC calls that a sign of a scam.
- Guaranteed approval regardless of credit is a red flag.
- Check that a lender is registered in your state before sharing personal details.
In this article
Where to report
- Federal Trade Commission: ReportFraud.ftc.gov
- Consumer Financial Protection Bureau: consumerfinance.gov/complaint
- Your state attorney general or financial regulator
Report even if you did not lose money; it helps stop scammers.
Most personal loan scams follow one script, the advance-fee scam. You are "approved," then asked for an insurance, processing or paperwork fee. You pay it, and the lender disappears.
It works because the victim is usually in a hurry. A few minutes with the checklist below is the best defense.
The 7-question scam test
Tick any that are true about the offer
Ticked even one? Stop and verify the lender before you go any further.
How it usually plays out
The $250 "insurance fee"
Dev applies for a $3,000 loan through a site he found on social media. Within an hour, an agent calls: he is approved.
There is one catch: a $250 "loan insurance" fee, payable by gift card, before the money can be released.
Dev pays. The phone number stops working the next day.
Illustrative example. Names and numbers are made up to show how it works.
Compare offers from established lenders
SponsoredReal lender or personal loan scam?
Real lenders
- Show the APR, fees and total cost before you sign
- Take any origination fee out of the loan itself
- Check your credit and income
- Are licensed or registered where required
Scammers
- Ask for money up front
- Guarantee approval
- Pressure you to act fast
- Want payment by gift card, wire or app
Scammers sometimes copy the names of real lenders. Contact the company using details from its official website, not the ones in the message you received.
Find licensed lenders in your area
Enter your ZIP code to see lenders and loan options available where you live. Checking options does not commit you to anything.
If you have already paid
- Right nowStop all contact and do not send any more money.
- Within the hourCall your bank, card issuer or payment app to try to reverse the payment.
- TodayReport it at ReportFraud.ftc.gov and to the CFPB.
- If you shared your SSNPlace a fraud alert or freeze your credit.
- Next few monthsWatch your credit reports at AnnualCreditReport.com.
Frequently asked questions
Is it normal to pay a fee before getting a loan?
No. The FTC warns that paying for a loan before you receive it is a sign of an advance-fee scam. Real origination fees come out of the loan proceeds.
How do I check if a lender is legitimate?
Look it up with your state financial regulator, search for complaints in the CFPB database and confirm it has a physical address and secure website.
Can scammers pretend to be real lenders?
Yes. Scammers sometimes copy the names of real companies. Contact the lender using information from its official website.
Where do I report a loan scam?
Report it at ReportFraud.ftc.gov, file a complaint with the CFPB and notify your state attorney general.
Ready to compare personal loan offers?
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