When you get an email or visit a website with an offer of a personal loan with a low or zero interest rate and no credit check, watch out. It’s probably a scam. Legitimate lenders don't send random emails inviting people to borrow money at a very low interest rate or with no interest at all.
Many loan scammers will set up websites or provide articles and reviews that outline the loans they offer.
They will usually offer a quick and easy loan approval process, a very low interest rate, and a guaranteed right to cancel.
Bad credit isn't an issue. Scammers tell borrowers they can get a loan regardless of their credit history.
It might sound legitimate, but it probably isn't. The scammer is either out to get your money by charging you a fee upfront for the loan or wants to get your confidential information for identity theft.
Loan Scam Warning Signs
- Email messages that contain spelling, capitalization, punctuation, and/or grammatical mistakes.
- Borrowers are asked to transfer money before getting the loan.
- There is a tax or fee required to get the loan.
- The interest rate is far lower than that offered by any legitimate lender.
- You are offered a free period (like a year with no payments) before you have to begin repayment of the loan.
- The company says that they don't use credit checks and will lend out money regardless of any financial problems in the past.
- Borrowers are told that they need to make a decision quickly, or they will miss out.
Loan Scam Examples
Here are examples of scams shared by readers:
Texas Loan Company
Texas Loan Company – be careful. Scam had a lot of emails for credit cards loans. All fake just wants money from you.
Emmediate Credit Solutions
They contact people who are looking for an FHA loan, and tell them they can help "repair" their credit. But instead, they get your credit card and they don't ever do a thing but take your money.
Check Out the Lender
Start by researching the lender to see if they appear legitimate. Google “[company name] + scam” to see if there are reports of scams related to the lender.
Then, look at their online presence: does their website appear professional? Financial institutions have a particular glossy look that you might recognize from your own bank’s website. Are there typos or inconsistencies on the site? Are the links functional?
Finally, ask the lender questions to check their legitimacy. Key questions you should pose include inquiring about the name of the company, its business address, licensing information, and registration. If their customer service representatives ignore or avoid these questions, it is probably a scam.
Tips for Avoiding a Loan Scam
Never send your social security number, credit card, or bank account details via email or enter them into a website that you aren't sure is legitimate. The links contained in the email can also be fake, and it may not be obvious that you are being sent to a different website than that of the real company.
Most legitimate loans will not require an upfront payment.
It is illegal for companies in the United States to promise a loan and ask for payment before its delivery.
No legitimate lender will guarantee approval before you apply or before they have had your credit status checked.
More Information on Job Scams
Sadly, scams abound in hiring just as they do in the loan industry. When you are searching for a new job on internet sources like Craigslist, you need to make sure that the position you are applying for is legitimate. Not all companies will provide their name or location in their online job advertisements.
While this isn’t always cause for concern, it nonetheless should raise a red flag for you to be careful about double-checking the employer’s credibility before you send them personal information or agree to meet with them in person.
What's a scam and what's not? It can be difficult to tell the difference between scams and legitimate job openings, especially when it comes to work-at-home jobs. Some typical work-at-home scams and warning signs include:
- Asking you to cash a check and forward money to a third party.
- Offering you a chance to assemble kits or envelopes at home for a great deal of money.
- Requiring a fee to access leads, training, or information relating to the job.
- Requesting personal information, such as your bank account or social security number.
- Offering you the job far too quickly, before even conducting an interview.
What to Do if You Have Been Scammed
Even if you know the warning signs of scams, you might be fooled by a particularly clever fraud. If this happens to you – or if you spot a probable scam and want to spare others – there are things you can do.
To report a scam:
- File a report with the Internet Crime Complaint Center: The IC3 is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). File your complaint online through this site.
- File a report with the Federal Trade Commission: The FTC collects complaints about companies and their practices.
- Report the company to the Better Business Bureau: The BBB accepts complaints that relate to a company’s products or services. Note: they do not accept complaints that contain “abusive or foul language,” per their site.
- Learn more information about reporting a scam in our comprehensive guide.