Is a 'loan pre-approved, pay a fee' offer a scam?
Yes. Legitimate lenders deduct fees from the loan — they never ask you to pay an upfront fee before releasing funds.
Last reviewed: 1 June 2026
Explanation
Advance-fee loan scams contact people — often those with poor credit or financial pressure — claiming they have been pre-approved for a loan. To receive the funds, the target must first pay a processing fee, insurance premium, or government tax. Once the fee is paid, the 'lender' disappears or invents further fees, and no loan ever arrives.
A genuine lender assesses your application and either approves or declines it. Any fees charged by reputable lenders are deducted from the loan proceeds or added to the repayment schedule — they are never collected upfront before the money is disbursed. Being 'pre-approved without a credit check' for a large loan is also not how legitimate lending works.
Common red flags
- Upfront fee required before the loan can be released
- Guaranteed approval regardless of credit history
- Lender cannot be verified through official financial authority registers
- Communication comes via text, WhatsApp, or social media rather than official channels
- Urgency to pay the fee before 'the offer expires'
- Fee is described as insurance, government tax, or processing charge
What to do now
- Do not pay any upfront fee to receive a loan
- Check the lender against your financial regulator's authorised-firms register
- Report the offer to your national fraud service
- If you already paid a fee, contact your bank immediately
- Block and delete contact from the fraudulent lender
Frequently asked questions
Do any legitimate loans have upfront fees?
Some mortgage products involve arrangement fees, but these are disclosed clearly and are typically added to the loan or deducted from proceeds — never paid in cash before the loan is issued to get it 'released'.
What if the company has a professional-looking website?
A polished website can be created very cheaply. Check the company name against your financial regulator's register — if it isn't listed, do not proceed.