Loan approved but pay a fee first? It is a scam
Advance-fee loan scams promise quick approval, no credit check, and money today, but first you have to pay "insurance" or a "processing fee", often with a prepaid card.
How this scam works
There is no loan. Once you pay one fee, another appears, and the scammer disappears when you stop paying.
Common versions of the message
- Guaranteed approval with no credit check
- An upfront insurance or processing fee
- A short approval window
What the message looks like
Text from +1 (555) 017-6625
Congratulations, your $15,000 personal loan is approved, no credit check! To release the funds today, pay the $350 insurance fee with a prepaid Visa card. Approval expires in 3 hours.
Fictional example based on common, publicly reported scam patterns.
The red flags
- 1
Too good to be true: “no credit check”
Real lenders check before approving
Real lenders check your credit before approving a loan.
- 2
Upfront fee: “pay the $350 insurance fee”
Real lenders take fees from the loan, not before
Legitimate lenders take fees from the loan amount, not as a payment beforehand.
- 3
Untraceable payment: “with a prepaid Visa card”
No real lender wants prepaid cards
No real lender asks for prepaid cards.
- 4
Rushed deadline: “Approval expires in 3 hours”
Pressure so you pay before checking
The deadline is pressure so you pay before checking.
What to do
- Do not pay any fee to get a loan.
- Check whether the lender is registered with your state's financial regulator.
- Report it at ReportFraud.ftc.gov.
If you already replied, clicked, or paid
- If you paid with a prepaid card, contact the card company with your receipt right away.
- If you shared bank or identity details, call your bank and consider a credit freeze.
- Do not pay any further fees.
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