When you have a need and not much money a personal loan is a good way to get some funds. You can get one through a bank, a loan company, private investors or an online lender. Before you enter into an agreement, educate yourself about possible scams; personal loan scams were the fifth most common scam in America in 2000. Usually each person scammed loses 4. For this reason the Federal government has been working hard to teach its citizens about these scams.

When searching for a personal loan is sure to avoid a person or lending organization that asks for an advanced fee. Often these so-called lenders are perpetrating a scam that unfortunately is quite commonplace. Paying a loan fee up front is no guarantee that you will get the loan and is a quick way to lose your money. In many cases, the “lender” absconds with the advance fee and the money is not recovered. Victims are embarrassed that they fell for such a scheme and are reluctant to report it to the authorities; those that do report it are frustrated because they very rarely receive restitution. If you are, sadly, the victim of an advance loan fee scam, it is important to alert the authorities. In the long run, you may help keep someone else from losing money that they couldn’t otherwise afford to lose.

For those with poor credit scores who are in desperation to obtain a loan, there are a number of advanced fees personal lending scams that feed off of the overly trustful and uninformed. Believe it or not, the majority of victims in such scams are less than thirty years old! The scam works by the lender telling the loan applicant that regardless of their individual circumstances, the lender can guarantee approval so long as the lendee pays a nominal processing fee. Sometimes this fee can cost hundreds of dollars. Modern technologies have enabled these shady lenders to create websites and phone numbers to add to their apparent legitimacy, and they supplement this with official-looking letters and documents that further build trust in their practices.

It is hard to believe that there are people out there who will take advantage of those who are down and out. Imagine the heartbreak of a woman who turns to a lender to catch up on late rent payments only to find he’s absconded with the “fee” he charged for the personal loans she was to receive! In the end, she is evicted after all -the very thing she was trying to prevent! Whenever you are in need of borrowing money, be sure an online lender is reputable by checking with the better business bureau. You can do so by entering their business name exactly as they have it listed. If the lender is not an online lender, do some research to be sure he is a reputable lender as well. Do not allow yourself to fall victim to these predatory lenders!

If you have bad credit or no credit you may have to pay a higher interest rate, but you should never have to pay any up front fees to apply for a loan. If you are asked for a first month payment or a high-risk deposit up front, you are encountering a personal loan scam. Any lender must allow you to have access to the funds for minimum of seven days before they can collect a first payment. The Federal Trade Commission regulates financial institutions. You can contact the Federal Trade Commission to check the legitimacy of any fees charged by a financial institution. If you are looking for financial advice, contact a reputable non-profit credit counseling service rather than a lender.