How do I know if a personal loan lender is legitimate?

NMLS Consumer Access: The Nationwide Multistate Licensing System operates a free consumer portal at nmlsconsumeraccess.org. You can search for any lender by name and see their state licenses, license history, and any regulatory actions. Legitimate consumer lenders must be licensed in the states where they operate. If a lender does not appear in NMLS, do not borrow from them.

Red flags of a predatory or fraudulent lender: (1) Upfront fee required before receiving the loan - legitimate lenders never ask for payment before disbursing funds. (2) Guaranteed approval regardless of credit - real lenders underwrite. (3) No physical address or only a P.O. box. (4) High-pressure tactics, limited-time offers. (5) Asking you to send money via wire transfer or gift cards. (6) Website URL that does not match the company name. (7) Contacting you unsolicited by phone or email.

Advance fee loan scams: The most common personal loan fraud is the advance fee scam. The 'lender' approves you for a large loan, then asks you to pay an upfront insurance fee, processing fee, or government tax to release the funds. The funds never arrive and the upfront fee is gone. Legitimate lenders deduct fees from the loan amount - they never request upfront payment.

How to verify a known lender: Search the lender name plus 'CFPB complaint' to check their regulatory history. Check the Better Business Bureau (bbb.org) for complaints and ratings. Review Trustpilot, NerdWallet, and LendingTree reviews. Verify the URL is the actual lender's site (not a lookalike phishing page).

Report fraud: If you encounter a scam lender, report to the CFPB (consumerfinance.gov/complaint), FTC (reportfraud.ftc.gov), and your state attorney general.