How to Avoid Loan Scams: Red Flags to Watch Out For
Financial stress can make us vulnerable, and scammers are experts at exploiting that fear. They create sophisticated schemes designed to steal your money and personal information, often targeting those who need help the most. Protecting yourself starts with knowledge. By learning the red flags, you can confidently identify fraudulent lenders and secure your finances. Major Red Flags of a Loan Scam Be extremely cautious if you encounter any of the following warning signs: 1. The Demand for an Upfront Fee This is the most common loan scam. A lender guarantees you a loan but insists you pay a fee first--calling it an "insurance fee," "processing charge," or even the first month's payment. They promise the loan money is on its way, but once you pay, they disappear, and the loan never arrives. The Rule: Legitimate lenders deduct fees from the loan amount or include them in your monthly payments. They never ask for money orders, wire transfers, or gift cards before...
