{"id":22706,"date":"2025-12-22T18:32:21","date_gmt":"2025-12-22T18:32:21","guid":{"rendered":"https:\/\/incredipros.com\/?p=22706"},"modified":"2025-12-22T18:32:23","modified_gmt":"2025-12-22T18:32:23","slug":"10-signs-of-personal-loan-scams-you-should-know","status":"publish","type":"post","link":"https:\/\/incredipros.com\/?p=22706","title":{"rendered":"10 Signs of Personal Loan Scams You Should Know"},"content":{"rendered":"
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\n Key takeaways<\/span>
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  • \n Technology is making it easier for scammers to defraud consumers out of billions of dollars with different schemes.\n <\/li>\n
  • \n Lenders that guarantee loan approvals for an upfront fee are likely personal loan scammers.\n <\/li>\n
  • \n Consumers with lower incomes and poor credit are more likely to be targeted by scammers.\n <\/li>\n
  • \n If you suspect a fraudulent lender has tricked you, stop communicating with the lender and freeze any related bank accounts, credit cards or debit cards.\n <\/li>\n<\/ul>\n<\/div>\n

    Consumers lost over $12.5 billion dollars to frauds and scams in 2024, according to the Federal Trade Commission. Fraudulent bank transfers, cryptocurrency scams and investment scams were among the most common culprits.<\/p>\n

    If you\u2019re searching for a personal loan, start by familiarizing yourself with the red flags and knowing how to vet potential lenders to avoid scams. Unfortunately, the onus is on you more so than in recent years, considering the budget cuts to the CFPB (Consumer Financial Protection Bureau).<\/p>\n

    10 red flags of loan scams to watch out for<\/h2>\n

    With financial scams increasing and less federal supervision of financial institutions by the CFPB, it\u2019s critical to do your due diligence and look for potential signs of fraud. Watch out for these ten red flags of potential personal loan scams.<\/p>\n

    1. The lender says approval is guaranteed<\/h3>\n

    Scam lenders may advertise guaranteed approval with no credit check or insist that bad credit is no problem, but guaranteed approval is a major red flag. Legitimate lenders can\u2019t approve loans until after a thorough review of your financial details. If a lender hasn\u2019t vetted your credit history<\/u> and income, it has no way of determining if you can repay the loan.<\/p>\n

    Guaranteed approval loan scams are typically geared toward consumers with poor credit histories or financial difficulties. Scammers know that borrowers with bad credit struggle to qualify for loans, but the promise of definite funding is often a ruse to steal sensitive personal information.<\/p>\n

    2. The lender charges upfront fees<\/h3>\n

    Legit loan companies don\u2019t charge upfront fees. Ever. Some try to justify upfront costs by calling them \u201cprocessing\u201d or \u201cinsurance\u201d fees. Others might pressure you to pay the first and last months\u2019 payments or a certain percentage of the total loan.<\/p>\n

    Reputable personal loan lenders subtract fees from your approved loan amount. Any fees the lender charges should be clearly stated in your loan contract. All of your fees should be the same on the paperwork you sign as they were at final approval. Watch for extra fees like funding, closing or administrative fees that weren\u2019t originally disclosed. If a lender pressures you to sign papers with more fees than you expect, you always have the right to cancel.<\/p>\n

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    \n What about origination fees?\n <\/p>\n

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    An origination fee is a common (and legitimate) cost associated with personal loans. This administrative fee may be as much as 12 percent of your loan amount and is deducted before your loan is disbursed. Shop around for lenders that don\u2019t charge for origination.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n

    3. The lender pressures you to apply now<\/h3>\n

    Scammers often use pressure and urgency to convince people to act immediately without enough information. Personal loan rates don\u2019t typically change overnight, and legitimate lenders don\u2019t pressure customers to take out any type of loan.<\/p>\n

    While lenders might run limited-time promotions to attract customers, they typically give people the time and information they need to weigh their options carefully. There certainly won\u2019t be consequences if you don\u2019t apply immediately, like higher interest rates or loss of eligibility for future loans.<\/p>\n

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    \n The best emergency loans of 2025
    \n <\/h3>\n

    <\/p>\n

    If you need access to quick cash to cover an unexpected expense, avoid the scams and explore Bankrate’s expert picks for the best lenders for emergency loans.<\/p>\n

    Learn more<\/p><\/div>\n<\/div>\n

    4. The lender contacts you with an offer<\/h3>\n

    In the current age of technology, it\u2019s not uncommon for a mobile or online personal loan search to lead to pop-up ads. While they may be annoying, they are typically harmless ads from different lenders to get your attention \u2014 the same as any mailer you\u2019d receive for a preapproved loan.<\/p>\n

    Receiving an unsolicited loan offer, <\/i>however, is a warning sign of a potential scam. Any offer should come as a direct result of you initiating contact through some type of online application. Legit loans are made by companies that seek your business through ads that encourage you to apply, and any offer you receive should only come after you submit an application.<\/p>\n

    5. The rate and terms look too good to be true<\/h3>\n

    Legitimate lenders always tailor personal loan terms to your credit score, income, employment history and other factors to determine how much you can realistically repay. While there are legitimate lenders that work with bad credit borrowers, the best personal loan rates<\/u>, the highest loan amounts and the longest terms are typically reserved for borrowers with excellent credit.<\/p>\n

    On the other hand, scam lenders may create \u201cclickbait rates\u201d to get unsuspecting borrowers to provide personal information. Alternatively, you might get a robocoll with a conversational voice leaving you a recording of how they just met with the loan committee and decided to offer you an absurdly high loan amount \u2014 often in the tens of thousands of dollars.<\/p>\n

    6. The lender has no contact information<\/h3>\n

    Scammers often avoid listing contact information, making it challenging to get your money back once the relationship turns sour. They often contact you from phone numbers that can\u2019t be called back or from emails that aren\u2019t branded with a company name. If they do provide contact information, they may ask you to contact them in unusual ways, such as messaging apps.<\/p>\n

    A personal loan lender on the up-and-up will have a website with contact information, will only send you emails with clearly branded company information and will typically provide an app or website help page with information for you to reach out with inquiries or concerns.<\/p>\n

    7. The lender has no physical address<\/h3>\n

    Some lenders may provide only a P.O. Box address or no address at all. A lack of a physical address is a significant red flag when evaluating a potential lender. However, don\u2019t necessarily trust a company just because they have a physical address \u2014 scammers can often create fake accounts that make it look like they are affiliated with a legitimate company.<\/p>\n

    These companies typically fall into the \u201cno contact information\u201d category and should be avoided. There are so many legitimate personal loan companies with clearly identifiable addresses that it doesn\u2019t make sense to do business with one that doesn\u2019t publish its corporate or business address. <\/p>\n

    8. The lender isn\u2019t registered in your state<\/h3>\n

    Chances are pretty good that a company claiming to be a lender without a physical address or contact information won\u2019t be registered to do business in your state. This is a violation of state law and a telltale sign of a scam. The same is true if a lender isn\u2019t transparent about state licenses.<\/p>\n

    Legitimate lenders disclose their licensing information or will readily offer it when asked. But if you can\u2019t find it, refer to your state attorney general\u2019s website<\/u>. Your state\u2019s bank regulator<\/u> should also have this information available.<\/p>\n

    9. The lender\u2019s website seems suspicious<\/h3>\n

    Criminals may create fake bank or lender websites that look similar to the real sites, hoping you give them your personal information without looking too closely. They also hack into lenders\u2019 personnel files or email servers and create spoof emails claiming to be employees of a lender.<\/p>\n

    Always make sure that any website that requests your personal or financial information is secure and properly encrypted. Call your lender if you\u2019re contacted by someone new during the loan process. Look for indicators such as \u201chttps\u201d (not just \u201chttp\u201d) in the site address and a padlock icon in your browser\u2019s search bar signaling a secure connection.<\/p>\n

    10. You get an email with a last-minute request<\/h3>\n

    Wire fraud has become a multi-billion-dollar problem for financial institutions. Be wary of any company asking you to wire or electronically send money via Zelle or Venmo. Funds lost due to fraud or theft aren\u2019t recoverable under FDIC insurance laws. Remember: If a deal sounds too good to be true, it probably is.<\/p>\n

    In addition, many personal loan companies use direct access programs like Plaid to directly deposit funds into your account. These programs have built-in security that only gives legitimate lenders \u201cread only\u201d access to your accounts.<\/p>\n

    Bank account fraudsters may take advantage of this to convince you to give them full access to your accounts. If you\u2019re unsure, always contact the lender\u2019s general customer service line and ask for a fraud prevention specialist or supervisor to confirm the request.<\/p>\n

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