What is an advance-fee loan scam?

An advance-fee loan scam promises guaranteed loan approval in exchange for upfront payment of fees — labeled as insurance, processing, taxes, or administration costs. Once you pay, the lender disappears or demands more fees. Legitimate lenders never require payment before disbursing a loan. Real lenders deduct fees from loan proceeds at closing or roll them into the loan balance. If any lender asks you to wire money, send gift cards, or pay via cryptocurrency before receiving funds, it is a scam. These scams frequently target borrowers with poor credit or urgent financial needs — if the offer sounds too easy, it almost certainly is.