The advance-fee loan

In an advance-fee loan scam, someone promises you quick access to money if you pay an upfront fee first — but the loan never arrives and your fee is gone.

Documented by the FTC & FBI IC3 · reviewed 2026-07-11T18:14:57.874Z

How it works

You're contacted (by phone, email, or text) with an offer for a loan with unusually easy terms, low interest, or guaranteed approval. The person creates urgency by saying the offer is time-limited or that you're a specially selected candidate. They ask you to pay a processing fee, insurance fee, or tax upfront to 'unlock' your loan.

What it can look like

You receive a call from someone claiming to work for a lending company. They say you've been pre-approved for a $5,000 loan with no credit check required, but you must pay $300 today to cover 'processing costs.' You send the money, and then the caller becomes unreachable.

How it unfolds

Scams like this follow a pattern. Knowing the arc helps you notice where you are — and step away before the ask.

You receive contact (email, phone, text, or letter) offering a loan or line of credit. The sender claims to be from a lender and says you pre-qualify, even though you never applied.

They build trust by sounding official, using real-looking logos or documents, and explaining why the interest rate is so good—you have 'special eligibility' or there's a limited-time offer. They may ask for basic information to 'verify' you.

Before releasing funds, they tell you there's a required upfront fee: for processing, taxes, insurance, or account setup. They pressure you to pay quickly—by wire transfer, gift card, prepaid card, or cryptocurrency—to 'lock in' the loan.

You send the fee and are told the loan is 'almost ready' but a new problem emerges—another fee, a background check cost, or a deposit requirement. Or the promised funds simply never arrive and contact stops.

STOP HERE: If you recognize this pattern before or after paying a fee, do not send more money, do not respond to follow-up requests, and do not ignore it hoping it resolves.

Red flags

You're promised a loan with no credit check or guaranteed approval
The lender insists on an upfront fee before any money reaches you
Pressure to pay quickly or lose the 'special offer'
Communication shifts to untraceable payment methods (gift cards, wire transfers, cryptocurrency)
The lender avoids answering questions about where the loan funds come from

What to do

Never pay an upfront fee for a loan — legitimate lenders deduct fees from the loan amount itself
Hang up or stop contact immediately if someone demands advance payment; block their number or email
Report the scam at reportfraud.ftc.gov so authorities can warn others

If it already happened

Acting quickly can limit the damage. You are not alone, and it is not your fault.

Stop all contact immediately. Do not send any more money or respond to messages, even if they apologize or claim there was a mistake.
Contact your bank or card issuer right away. If you paid by wire transfer, bank transfer, gift card, or prepaid card, report it as fraud immediately—the sooner you report, the better your chance of a refund.
Change your passwords for email and any online banking or financial accounts, especially if you shared login details or personal information with the lender.
Report the scam to the Federal Trade Commission at reportfraud.ftc.gov. Include all contact details, messages, and payment records so the FTC can track patterns and protect others.

Sources

Guidance on this page draws on public, authoritative consumer-protection resources (verified live 2026-07-10). Documented by the FTC & FBI IC3 · reviewed 2026-07-11T18:14:57.874Z.

Spotted this or lost money? Report it at reportfraud.ftc.gov. This is general educational information, not legal or financial advice — and ScamVet never asks for your identity or account details.

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