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Top 5 Signs Your Personal Loan is a Hoax

Posted February 25th, 2010
by Staff

matrixtextBanks have been offering personal loans for as long as there have been banks. It’s pretty much a staple product, right along with savings. Because people often need to borrow money, there are all sorts of personal loan products that have cropped up over the centuries, taking on a variety of forms. Mortgages, car loans and even payday loans all are cut from the same cloth.

Still, not everyone claiming to offer you a loan is legitimate. Here are 10 signs that the personal loan offer you’ve received might not be on the up and up:

  1. The personal loan offer has a return postmark of New York, yet claims to be from Nigeria. In addition to the famous “Nigerian Prince” that needs you to send him $30,000 so that he can deposit $20 billion into your bank account, there are also similar fake personal loan offers. Don’t fall for this one.
  2. The personal loan offer comes from your garbage man. There are rumors that those guys are all part of the mafia, anyways. Borrow their money, and you’re likely to wind up with a broken leg if you don’t pay it back. Stick to reputable financial institutions.
  3. The lender asks for a security deposit or a processing fee up front. The fact of the matter is that personal loan lenders include all of their interest and fees in the loan. There are some exceptions – such as the closing costs on a mortgage – but these are very few and far between. Don’t just randomly give people what little money you have before you do some investigation.
  4. The lender claims that he will give you a loan without any fees if you borrow twice as much and let him invest the part you don’t need. This is a newer hoax. In this one, the scam artist loans you a certain amount of money. They then create a loan for twice that amount – plus interest – and then tell you that the investments failed and you’re on the hook for the balance. Think Bernie Madoff kind of stuff here. This is, of course, illegal.
  5. You sign the papers and hand over your bank account number, but no money appears. That’s the biggest sign that you’re in trouble. You don’t actually get the loan money, and you’ve handed someone the ability to take money from your bank account all at once.

Photo via Patrick Hoesly



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