Advance-Fee Loan Scam
A 'lender' guarantees a loan regardless of your credit but requires an upfront fee to 'release' the funds — you pay, and no loan ever arrives.
Think a message like this reached you? You can check it right now.
What this scam is
You are offered a guaranteed loan or line of credit, no credit check needed, but must first pay a fee — 'insurance,' 'processing,' 'first payment,' or 'collateral' — usually by gift card or wire. Legitimate lenders do not guarantee approval or require fees paid this way before funding, and they do not ask for upfront payment by gift card. Once you pay, the lender vanishes or demands more. The advance fee is the scam.
What it usually looks like
- A guaranteed loan with no credit check.
- An upfront fee to 'release' or 'insure' the loan.
- Payment by gift card or wire.
- Pressure and a lender you cannot verify.
Common warning signs
- Guaranteed approval regardless of credit.
- Any upfront fee to receive a loan.
- Gift-card or wire payment demands.
- An unlicensed or unverifiable lender.
Example wording scammers use
“You're approved for a $10,000 loan! Pay the $400 insurance fee to release the funds.”
“No credit check needed — just send the first payment upfront to activate your loan.”
These are illustrative examples written by ScamSplain, not real messages.
What the scammers want
- An upfront fee for a loan that won't come.
- Untraceable payments.
- Your personal and bank details.
What to do
- Never pay a fee to receive a loan.
- Verify lenders' licensing with your state regulator.
- Distrust guaranteed approval and no-credit-check offers.
- Report the lender.
What to do if you already responded
- Contact the gift-card/wire provider immediately.
- Watch for identity misuse if you shared details.
- Report at reportfraud.ftc.gov.