Advance-Fee Loan Scams

Understanding advance-fee loan scams can help you protect yourself and make informed decisions. While anyone can encounter a scam, being aware of the risks puts you in control. Scammers often target individuals facing financial challenges, but with the right knowledge you can stay safe.

What Is an Advance-Fee Loan Scam?

An advance-fee loan scam is a scheme that targets individuals with poor credit by promising loans that never come through. Scammers might use enticing ads or make calls offering attractive loans to catch your interest. When searching for a loan, keep an eye out for these signs that could indicate you’re dealing with a scammer.

• Upfront fees: Trustworthy lenders don’t ask for application fees before reviewing your loan.
• Guaranteed loans: Legitimate lenders will want to check your credit history before offering a loan.
• Pressure tactics: Be cautious of lenders using urgency, like limited-time offers, to rush your decision.

Warning Signs

When searching for a loan, keep an eye out for these signs that could indicate you’re dealing with a scammer.

• Promise of a guaranteed loan or credit: No legitimate lender will offer guaranteed loan approval by paying a fee. Reputable lenders do not ask for payment before they approve your loan application.
• Promise of a loan without a credit check: A reputable lender will check your creditworthiness and income to ensure you can afford the loan. They will never promise a loan without checking your credit history.
• An insecure website or no website at all: An authentic lending company will have a website with “https” and not “http” in the URL. The ‘s’ in the web address indicates that the site is safe to visit. The website will also have a lock sign near the browser that shows that the website protects your information from outsiders.
• No valid place of business: A lender may be a scammer if they do not have a valid physical address on their website.
• The representative contacted you first: Unlike reputable lenders, scammers usually make cold calls and offer attractive deals to promise loans and lure away your hard-earned money.
• You are being pressured to act quickly: Personal loan scammers use high-pressure tactics to push you into making hasty financial decisions.

Protecting Yourself

Here are some proactive steps you can take to ensure a safe experience while looking for a loan:

• Check for registration: Click here to make sure the lender is registered in your state. This is a great way to confirm their legitimacy.
• Do your research: Look up the company’s name with terms like “reviews” or “feedback” to see what others have experienced.
• Ignore robocalls: If you receive a pre-recorded sales pitch, simply hang up and report it to reportfraud.ftc.gov.
• Don’t make advance payments: A trustworthy lender won’t ask for payment upfront for a loan. If they do, it’s best to walk away.
• Seek help for debt management: If you’re facing challenges with debt, consider reaching out to non-profit organizations that offer affordable credit counseling. One great option for financial counseling is our partner GreenPath Financial Wellness. The team at GreenPath will help you develop a plan to get you back on track and is free for Horizon members.

Looking for a Loan?

By staying informed and taking positive steps, you can navigate the loan process confidently and secure your financial future. And we’re here to help! Horizon is a trusted lender offering personal loans, auto loans, RV & boat loans, home loans and more. Start your journey by giving us call at 800.852.5316 or apply online today.