{"id":122968,"date":"2017-10-27T14:17:02","date_gmt":"2017-10-27T21:17:02","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=122968"},"modified":"2026-04-09T17:08:07","modified_gmt":"2026-04-09T16:08:07","slug":"personal-loan-scams","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/personal-loans\/personal-loan-scams","title":{"rendered":"How to avoid a personal loan scam"},"content":{"rendered":"

Late repayments can cause you serious money problems. See our debt help<\/a> guides.<\/div><\/article><\/span><\/p>

You can get personal loans<\/a> from a lot of places these days. If you don\u2019t like your bank or credit union\u2019s terms or have bad credit when applying, an online lender might cater to your specific needs.<\/p>

But going online comes with a downside: It\u2019s harder to tell a scam from a legitimate offer. To help you avoid getting ripped off, we cover the signs of a personal loan scam and what you can do to avoid them.<\/p>

6 signs of a personal loan scam<\/h3>
  1. No credit check required.<\/strong> Most legitimate lenders will check your credit to determine if you\u2019re able to repay them: A high score means you repay your debts in full and on time. If a lender isn\u2019t interested in seeing your credit score<\/a>, this may be a red flag. A scammer typically doesn\u2019t care about your creditworthiness because they\u2019re simply after your personal information. It\u2019s always best practice to check your credit score<\/a> on a regular basis. Unexpected credit checks could also be an indicator of potential fraud.<\/li>
  2. You can\u2019t find a physical address.<\/strong> If a lender doesn\u2019t provide a physical address or contact information, this may be a sign that it\u2019s illegitimate. Scammers want to make it difficult for you to get in touch later, thus avoiding any legal action you might want to pursue against them.<\/li>
  3. Your offer expires soon \u2014 and you must act now.<\/strong> If you\u2019re faced with an \u201curgent offer,\u201d you\u2019ve likely found a scam. Legitimate lenders offer steady rates that depend on your credit. Pressure tactics are designed to drive you to act quickly, before you\u2019re able to spot a scam in progress.<\/li>
  4. The loan requires payment up front.<\/strong> Loans demanding \u201cprocessing,\u201d \u201cinsurance\u201d or any fees before approval are a scam. A lender asking for payment before it\u2019s processed your application is a scammer looking for a quick buck.<\/li>
  5. You\u2019re guaranteed approval.<\/strong> There\u2019s no such thing as a guaranteed loan. For approval, a lender will typically check your credit and verify your information. Scammers may lure you in with guaranteed approval to discourage you from shopping around or so they can collect fraudulent upfront fees. It\u2019s not unusual to come across \u201cpre-approved\u201d loans when you agree to a soft search, but a lender will want to carry out a full, \u201chard\u201d credit search before making a formal loan offer.<\/li>
  6. Asks for payment in the form of a gift card.<\/strong> Paying a lender with a gift card is the same as paying with cash \u2014 once the money has been used, it\u2019s nearly impossible to trace or get back. No legitimate lender will ask you pay with a gift card, and if your lender is pressuring you to do so, you should find a new loan.<\/li><\/ol>

    6 things to look for in a legit lender<\/h3>

    Use these tips before signing a contract to be sure you\u2019re dealing with an upstanding business.<\/p>