How to Avoid Loan Scams: Red Flags of "Guaranteed Approval" Offers
When you need money fast, scammers know it. The most common trick is the advance-fee loan: a promise of guaranteed approval, followed by a demand for payment before you get the money.
What the FTC says
The FTC explains that in an advance-fee loan scam, scammers promise a loan or credit "no matter your credit history," then demand an upfront fee for "processing," "insurance," an "application" or something else. And then the money and the scammer disappear. It also notes that legitimate lenders won't promise or guarantee a loan before they check your credit and application, and that it's illegal for telemarketers to promise you a loan and ask you to pay for it upfront.
Source: Federal Trade Commission, "What To Know About Advance-Fee Loans" (accessed October 27, 2026). Report scams at ReportFraud.ftc.gov.
Red flags
- "Guaranteed approval," "bad credit? no problem," "no credit check"
- Any fee required before you receive the loan, especially for "insurance" or "processing"
- Requests to pay by gift card, wire transfer, payment app or cryptocurrency
- Unsolicited calls, texts or emails offering loans
- Pressure to act immediately
- A website with no physical presence, licensing information or clear terms
- Approval "without even looking at your credit," then a request for your bank login
How to verify a lender
- Check that the lender is registered in your state with your state attorney general or financial regulator.
- Search the company name plus "complaint," "review" or "scam."
- Look up complaints in the CFPB's public complaint database.
- Never share your online banking password.
- Get all terms in writing before you sign.
If you've been targeted
- Stop contact and don't send more money.
- Contact your bank or payment provider right away.
- Report it to the FTC at ReportFraud.ftc.gov and to your state attorney general.
- If your identity may have been stolen, visit IdentityTheft.gov.