How to spot and avoid loan scams
The biggest red flag is any lender or “loan finder” that guarantees approval or asks you to pay a fee before you get the loan, especially by gift card, wire transfer, payment app or crypto. Legitimate lenders disclose costs in writing, don't pressure you to sign immediately and let you take documents home. Check mortgage lenders and brokers in the NMLS Consumer Access database and report scams to the FTC at ReportFraud.ftc.gov.
Red flags
- "Guaranteed approval" or "no credit check, any credit" promises for large loans.
- An upfront fee for "insurance", "processing" or "first payment" before funds arrive.
- Requests for payment by gift card, wire, crypto or payment app.
- Pressure to sign today, blank spaces in documents, or refusal to give you copies.
- Emails that change wiring instructions before a home closing. Always call your settlement agent at a number you already know before wiring money.
- "Mortgage relief" companies that charge before doing any work or tell you to stop paying your servicer.
Car-financing tricks
- "Yo-yo" financing: you drive off, then the dealer calls to say the financing "fell through" and you need a new, worse deal. Read the contract for conditions.
- Add-ons packed into the payment without your clear agreement. The FTC says you can decline optional add-ons.
Verify before you share information
Mortgage lenders, brokers and loan originators must be licensed; look them up in NMLS Consumer Access (nmlsconsumeraccess.org). Express Approvals will never ask for your Social Security number, bank login or an upfront fee.
Where to report
- Federal Trade Commission: ReportFraud.ftc.gov
- Consumer Financial Protection Bureau: consumerfinance.gov/complaint
- Your state attorney general and state financial regulator
Frequently asked questions
Is 'guaranteed approval' legitimate?
Treat it as a red flag. Legitimate lenders review your application before deciding, and no comparison site can guarantee approval.
Should I ever pay a fee before getting a loan?
Be very cautious. Paying an upfront fee to 'secure' a personal loan is a hallmark of advance-fee scams. Mortgage application or appraisal fees are disclosed on a Loan Estimate and paid to a verified, licensed lender.
How do I check if a mortgage lender is licensed?
Search for the company or loan originator in the NMLS Consumer Access database.
Where do I report a loan scam?
Report it to the FTC at ReportFraud.ftc.gov and to the CFPB at consumerfinance.gov/complaint.
Sources
- FTC: ReportFraud.ftc.gov (accessed October 29, 2026)
- CFPB: Submit a complaint (accessed October 29, 2026)
- FTC: Did you ask for all those add-ons? (accessed October 29, 2026)
- FTC: Car dealer ads and promotions (accessed October 29, 2026)