Tips to Avoid Online Loan Scams

Medical expenses, holiday costs, and even vacations can really tighten your budget. A personal loan can be a great option to help finance these purchases over time.

Applying for personal loans online is convenient and can save time. Unfortunately, scammers have also found ways to take advantage of this and use deceptive marketing to trick you into applying for a fake loan, which can result in identity theft and money loss. Other loans might make claims of “Guaranteed Approval” or “No Credit Check Required,” but come with severe penalties, large fees, and high interest rates.

We recommend these best practices to help ensure a safe, secure experience when applying for loans online:

  • Don’t give out your online or mobile banking username and password. A legitimate financial institution will never ask for this information. To protect your identity, this information should never be shared.
  • Don’t make payment up-front using a gift card, money order or wire transfer. Non-traditional forms of up-front payment are a sure sign of a fake loan. Some lenders may require a down payment, but never in the form of gift cards or wire transfer. Your financial institution can help you securely transfer funds to online lenders who require down payment.
  • If it’s too good to be true, it probably is. Information about your income and credit history prove your ability to pay back a loan and is used to secure a fair interest rate and affordable monthly payment. Online loans that don’t require this information likely come with harsh strings attached or even worse, could be fake. If you need help building your credit score, your credit union is a great resource for tools and information to improve your financial wellness.
  • Make a smart choice by researching online lenders. Before you choose to work with an online lender, look for reviews from trusted sources other than the lender’s website. These reviews will provide insight into the experiences that others have had with the company.
  • Bank with someone local that you can trust. While there are many legitimate online lenders, when possible we recommend banking with a local financial institution that keeps your best interest in mind.

Credit Unions are not-for-profits and exist to serve and invest in their members. This philosophy makes it possible for credit unions to offer competitive rates on their loans. Visit our website to see the great rates we offer or give us a call at 315.782.0155 to get pre-approved. We want to help you live your best financial life and keep you safe from fraud.