Spot a loan scam before it costs you.
Scammers target people who need money quickly. Learn how the most common loan scams work, how to check that a lender is real, and exactly what to do if you have already paid.
- Upfront fees are the tell. Real lenders do not require payment before you get the loan.
- Verify the license. Most lenders must be licensed in the states they serve.
- Report it fast. Quick action can sometimes stop or reverse a payment.
Written by the Lendli Editorial Team under our editorial policy. Last reviewed .
Think you have been scammed?
Act quickly. These steps limit the damage.
- Call your bank or card issuer
Ask them to stop or reverse the payment. - Report it to the FTC
ReportFraud.ftc.gov - If you shared personal data
Use IdentityTheft.gov for a recovery plan. - Freeze your credit
Free at Equifax, Experian and TransUnion. - Tell your state attorney general
And the state financial regulator.
Gift card payments: contact the card company right away; some can freeze the funds.
How advance-fee loan scams work
The most common loan scam promises easy approval, then asks for a payment before the money is released, calling it insurance, a processing fee, taxes or a "good faith" deposit.
Once you pay, another fee appears. The loan never arrives. Payment is usually requested by gift card, wire transfer, payment app or cryptocurrency, because those are hard to reverse.
Other scams to know
Advance-fee scams are the most common, but not the only ones.
Lender impersonation
Scammers copy the name and logo of a real lender and send you to a look-alike website or phone number.
Debt relief scams
Companies that charge before settling any debt, or tell you to stop paying creditors.
Fake check overpayment
You receive a check for too much and are asked to send back the difference before the check bounces.
Phishing for data
Fake applications collect your Social Security number and bank login to steal your identity.
Loan flipping
Pressure to refinance again and again, adding fees each time without real benefit.
Student loan relief
Offers to cancel or reduce federal student loans for a fee; the free options are available through your servicer.
How to check that a lender is real
A few minutes of checking can save you a lot of money.
- Look the lender up on NMLS Consumer Access (nmlsconsumeraccess.org) or your state financial regulator's website
- Type the lender's web address yourself instead of clicking a link in a text or email
- Find a physical address and call the number listed on the official site
- Search the company name with words like "scam" or "complaint"
- Check the CFPB complaint database for patterns
A real lender will
- Review your credit and income
- Show the APR and total cost in writing before you sign
- Deduct any fees from the loan or add them to it
- Give you time to read the agreement
Red flags checklist
One of these is a reason to pause. Two or more is a reason to walk away.
Payment before funding
Any request to pay before you receive the loan, especially by gift card or wire.
Guaranteed approval
Promises that your credit history does not matter at all.
Pressure and secrecy
Deadlines measured in minutes, or instructions not to tell your bank.
Unsolicited offers
A loan offer you never asked for, by phone, text or social media.
No physical address
Only a phone number or messaging app, and no state license you can find.
Asks for logins
Requests for your online banking username and password.
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