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Some companies promise you a loan or credit card regardless of your credit history. But they want you to pay a “processing” or other fee first. Those are scams. Learn the telltale signs.

What Is an Advance-Fee Loan Scam?

Do you need to borrow money to make auto repairs, consolidate credit card debt, or pay your mortgage? In an advance-fee loan scam, scammers promise they’ll get you a loan, credit card, or access to credit. Or they say they’ll put you in touch with a lender who can almost certainly get you those things. No matter your credit history. But first, they say, you must pay up front. The scammer might say the money is a fee for “processing,” “insurance,” an “application,” or something else. But it’s a lie. There is no loan and there is no lender. And if you pay, the scammer and your money will disappear.

Advance-fee loan scams target people who have bad credit or trouble getting a loan for other reasons. The scammers post ads, often online, or call with these so-called deals. Many buy lists of the names of people who have searched or applied online for payday or other loans.

If you're considering a possible lender, know that

  • Legitimate lenders will not promise you a loan or other credit without knowing your credit history, but demand you pay them first.
  • Real lenders can require an application or appraisal fee before they consider your loan application.
  • But nobody legit will tell you that paying a fee guarantees that you’ll get a loan.

Warning Signs of an Advance-Fee Loan Scam

Here are some signs of a possible advance-fee loan scam:

Scammers place ads that say you can get credit regardless of your credit historyThey may say things like, “Bad credit? No problem,” “No hassle — guaranteed,” or, “We don’t care about your past. You deserve a loan!”

Banks and other legitimate lenders won’t promise or guarantee you a loan or credit before you apply. They’ll check your credit report, confirm the information in your application, and decide if they think you’ll repay the loan before giving you a firm offer of credit.

Scammers don’t disclose fees before you apply for a loan. Scam lenders might say you’ve been approved for a loan. But then they say you have to pay them before you can get the money. That’s a scam. Any up-front fee that the lender wants to collect before granting the loan is a cue to walk away, especially if you’re told it’s for “insurance,” “processing,” or just “paperwork.”

Scammers call, offering loans or other credit. But it’s illegal for telemarketers to promise you a loan or other credit and ask you to pay for it up front and before they deliver. (The Telemarketing Sales Rule says so.)

Protect Yourself

Not sure if the lender you’re talking with is legitimate? Use these steps to help protect yourself against scammers.

  • Search online. Type the company’s name into a search engine with words like “review,” “complaint,” or “scam.” Also, try searching for the company's phone number to see if other people have reported scam calls from that number.
  • Don’t pay for a promise. Whether someone asks you to pay in advance for a credit card, loan offer, debt relief, mortgage assistance, or a job, walk away. No one legitimate will ever ask you to pay for a promise. If they do, it’s a good bet it’s a scam.
  • Get help dealing with debt. You might have more options than you think. Nonprofit organizations in every state offer credit counseling services that often are free or low cost. Learn more about possible options for coping with debt.

What To Do if You Paid a Scammer

Scammers often ask you to pay in ways that make it tough to get your money back. For example, they might ask you to pay by using cryptocurrency, by wiring money through a company like MoneyGram or Western Union, or by putting money on a gift card and then giving them the numbers on the back. No matter how you paid a scammer, the sooner you act, the better. Learn what to do if you paid a scammer.

Report Advance-Fee Loan Scams

If you’ve lost money to an advance-fee loan scam, or have information about the company or scammer who called you, report it at When you report these wrongdoers, you help law enforcement stop them and alert others in your community to the scam.