Three Warning Signs of a Personal Loan Scam

At times, the Holiday season can lead Consumers to consider alternatives for finding extra cash to help cover expenses. Be especially cautious of fraudsters as you apply for a new credit card, personal loan or line of credit as they could be posing as legitimate lenders. According to the U.S. Department of the Treasury’s 2024 Cyber Crime Advisory Report, cybercrime contributed to losses exceeding $12.5 billion in 2023.

Before you borrow, take a moment to protect yourself. Ask these key questions to make sure the offer in front of you is real and not a scam.

Are they asking for an upfront payment before I receive my loan or line of credit?

One of the biggest red flags of a personal loan scam is being asked to pay fees upfront. Scammers will often use language like a “processing fee,” “insurance,” or “verification charge,” but no legitimate lender will ask you to pay money before receiving your loan. Real lenders deduct any fees from the loan amount after the funds are disbursed—not before.

If someone insists you send money upfront, walk away.

Do they guarantee approval or skip the credit check?

If you need cash quickly, the financial pressure can make a promise of guaranteed approval sound appealing, especially if your credit isn’t perfect. But if something sounds too good to be true, it probably is. It is important to remember that getting a personal loan isn’t supposed to be quick and easy. Any legitimate lender will review your credit and financial history before offering a loan. This process helps them assess risk and determine appropriate terms.

If someone tells you you’re approved instantly with no credit check needed, they’re not giving you a free pass, they’re likely trying to lure you into a scam or a predatory loan with excessive interest rates, fees, and terms that can lead to a cycle of debt.

Are they pressuring me to act fast?

Just like a flashy holiday sale, scammers thrive on urgency. By pressuring consumers to “act now” or take advantage of offers that are “expiring soon,” they hope to scare you into acting without reading the fine print.

A legitimate lender, on the other hand, will encourage you to take your time, review the terms, and make an informed decision. If someone is rushing you, it’s usually because they don’t want you to notice something’s off.

Finding the Right Solution

Dealing with financial fraud can be a massive headache, leaving you with added stress during an already busy time. It’s always better to take your time and do the research ahead of time than to move fast and risk being scammed.

At WSFS, we offer a suite of financial solutions for you and your solution. Whether that means consolidating existing debt using a personal loan, creating a personal line of credit to pay off any high-interest debts or upcoming expenses, or serving as your trusted advisor in your financial decisions, schedule an appointment with one of our Associates to talk about your best strategy for your situation.

If You Have Been Scammed

If you suspect you’ve been targeted or have already fallen victim to a scam, responding immediately is key.

• File a complaint with the FTC at ReportFraud.ftc.gov and the FBI’s Internet Crime Center at www.IC3.gov.
• Contact your bank immediately to secure your account and protect your information.
• Place a fraud alert on your credit report with Equifax, Experian and TransUnion.

BY SHELLY KAVANAGH Shelly Kavanagh is Senior Vice President, Director of Retail Delivery for WSFS Bank…