How to Spot a Loan Scam

HOW TO SPOT A LOAN SCAM
Becoming a victim of an personal loan scam will cause you problems monetarily and mentally. Every year, thousands of Americans fall prey. Below is some useful info that will help you avoid these types crimes.

Upfront / Advance Fees
The most common and also the most obvious aspect of a loan scam is the need to remit upfront fees in order to achieve your approval. Making a fee a requirement eliminates the purpose of a loan since most people applying for a personal loan have no money. So, requesting money from someone looking for money makes zero sense. Legitimate loan providers understand applicants are strapped for cash and are not going to impose any fees until you financing is obtained. If you ever are requested for money up-front by any type of unsecured loan lender, run the other direction! Advance fee loan scams can happen to even the smartest of people. Be careful!

Not Concerned With Credit Ratings At All
An additional means for identifying a potential scam is when a loan provider is not interested in your credit history at all. Scammers will advertise 'bad credit guaranteed approval'.

There is no such thing as a guaranteed approval. It is important to note that there are many loan companies, like ourselves, that are able to approve loans for people with no credit and even those with bad credit histories. However, we will still need to analyze your credit report during your application process.

Telephone Offers
You should always be skeptical when a loan offer is presented to you over the telephone. It has become very common for loan scams to originate via a phone solicitation. If you receive a phone call for a loan, write the number down and hang-up. Contact your local authorities and let me them know that you just received a call from 'x' number for an unsecured loan. A legitimate lender will never contact you over the phone with an unsecured loan offer. Search for the offending number in Google. You will likely see posts in forums from other consumers that have received the same call, or even worse already have fallen victim to the loan scam.

Name Variations of Legitimate Companies
If you ever come across any company that has a slightly different name than a established, well known financing institute, you are likely communicating with a scammer. For instance, you may cross paths with a loan source that has one letter difference than the known company, i.e. Well Fargo - SCAM, Wells Fargo - LEGITIMATE. Note the missing 's' in the scamming source. Companies that do this are successful at getting unsuspecting customers to buy into their illegitimate brand awareness.

Non-Licensed Companies
Before signing any sort of loan documents, it is important that you make certain that the loan provider is in fact licensed to do business/provide financing in your state. If credentials are unable to be provided, then walk away from the situation.

Related Reading:
ConsumerFrauding.org - Report a loan scam.
How to Avoid Loan Scams
What Should I Do If I am a Loan Scam Victim?

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