Warning Signs of Personal Loan Scams

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Interest in personal loans is rising this year, industry experts say. 

Unfortunately, potential scams are rising too.

Amid record-breaking unemployment rates and a staggering economy, consumers are seeking personal loans for two primary purposes: to consolidate credit card debt or simply to get by, says Brian Walsh, CFP and senior manager of financial planning at SoFi, a national personal finance and lending company. 

“This is a way to help get them through until they get back to normal,” says Walsh.

Scammers have taken notice. In the first four months of 2020, the Federal Trade Commission (FTC) reported more than 18,000 accounts and more than $13.4 million

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9 ways to spot personal loan scams

Consumers lost a total of $1.9 billion collectively to fraudulent practices in 2019, according to the Federal Trade Commission. Debt consolidation, medical bill payment and other services can offer attractive personal loan options and lure in unsuspecting consumers who then learn that the lender was nothing more than a fraud.



a group of people sitting at a table: Couple discussing finances with lawyer


© fizkes/Shutterstock
Couple discussing finances with lawyer

How can you determine whether a loan company is legitimate? Here are common signs of a potential loan scam.

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What are personal loan scams?

Loan scams are fraudulent businesses that prey on consumers who are looking for quick solutions to their financial problems, says Daniel Hill, a CFP and president of Hill Wealth Strategies. They’re typically found online, with no storefront

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