Personal loan scams: 9 warning signs and what to do

The pattern behind most loan scams

The scammer needs you to pay before you receive anything. The story changes (processing, insurance, a deposit, a "refundable" fee), but the order never does: money out first, loan never.

Nine warning signs

1. They guarantee approval before looking at your credit or income.
2. They ask for a fee, deposit or insurance payment before funding.
3. They ask you to pay with gift cards, wire transfers, payment apps or crypto.
4. They contacted you first by text or call with a "pre-approved" offer you never requested.
5. They push you to act today and not to tell anyone.
6. The website has no physical address, license information or working phone number.
7. The email comes from a free webmail address while claiming to be a bank.
8. The contract changes after you say yes, or a new fee appears.
9. They ask for your bank login, not just account and routing numbers for deposit.

The FTC says legitimate lenders do not promise a loan before reviewing your credit and then demand payment first, and real lenders may require disclosed application or appraisal fees but nobody legitimate says a fee guarantees you will get a loan.

How to verify a lender in five minutes

1. Search the exact company name plus "complaints".
2. Check your state's lender license database. In North Carolina that is the Commissioner of Banks; in South Carolina it is the Office of the Commissioner of Consumer Finance. Other states have similar regulators.
3. Look the company up in the CFPB complaint database.
4. Call the number printed on its state license, not the one in the ad.
5. Ask for the APR and finance charge in writing.

If you already paid

Contact your payment provider immediately and ask to reverse or dispute the charge. Report it at ReportFraud.ftc.gov and to your state attorney general. Watch your accounts for misuse if you shared bank details.

Scam scripts, word for word

Scammers reuse the same few lines. Knowing them in advance makes them easy to spot.

Where scammers find you

Social media ads, text messages from unknown numbers, search ads that look like lenders, emails with attachments and messages that pretend to be from a bank or your own lender. Anyone who contacts you first about a loan you did not request deserves extra suspicion. A legitimate lender will not text a link and demand immediate payment.

Five checks before you share anything

1. Look up the lender's name with your state regulator's license search.
2. Search the company name with "complaint" and "scam".
3. Confirm the website address and phone number independently.
4. Check that the site has a physical address you can find on a map.
5. Ask for the APR and finance charge in writing before you sign.

If you have already paid or shared information

Stop sending money, even if they say a final payment will release the loan. Contact your bank or card issuer about the transaction as quickly as you can, because speed affects what can be recovered. If you shared a Social Security number or an account login, place a fraud alert or credit freeze, change passwords and watch your accounts. Report the scam at ReportFraud.ftc.gov and to your state attorney general. The FTC's guide to advance-fee loans explains the pattern in more detail.

What to do in the first hour after you suspect a scam

1. Stop all contact and do not send more money.
2. Screenshot messages, numbers and payment confirmations.
3. Call your bank or card issuer and ask them to review the transaction.
4. Change passwords for any account you shared, and turn on two-step sign-in.
5. Consider a free fraud alert or credit freeze with the credit bureaus.
6. Report at ReportFraud.ftc.gov and to your state attorney general.