How to Check If a Loan Company Is Legitimate

Here’s how you can vet potential lenders before you apply for a loan.

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Worried your potential lender isn’t a real lender? We understand. Lenders ask for so much information about you and your business. In the hands of a scammer, that info could hurt your credit score and cost you money. And loan scams are only becoming more common, whether you’re dealing with business loans, personal loans, or even student loans.

Fortunately, you can do a little digging before you apply for a loan or accept a loan offer. That way, you’ll know you’re dealing with a legitimate lender and not a fraudster.

So before you submit your loan application, follow these steps to make sure you’re applying with a legitimate loan company.

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1. Check out the lender website

One of the first ways you can weed out loan scammers is by looking at a lender’s website (and other web presence).

Any reputable lender will have a website with its own domain name. Think [lender name].com rather than, say, [lender name] or something like that.

And when you look at the website URL in your browser, you should see a little padlock icon next to it. If you click on that padlock, your browser should tell you that your connection is secure, and you should even be able to view that site’s security certificate.


If that padlock isn’t there or the security certificate is expired, the site isn’t keeping your information properly protected. Best case, that means the lender accidentally let its certificate lapse or suffered a cyber attack. Worst case, it’s a scam. Either way, don’t submit any personal information through that website.

But let’s assume the domain name and padlock look great. Then you might want to poke around the website a bit to make sure things look good. Is the text on the website, for example, fairly well-written? If you see tons of grammatical and spelling errors, that may point to a scam. (But a few typos here and there aren’t a big deal.)

Finally, you can look for a blog. If the lender has blog posts dating back months and years, it’s more likely to be legitimate. (Not every lender has a blog, though. So if yours doesn’t, keep going through the following steps before writing them off.)

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2. Research the physical address

While you’re on a loan company’s website, go ahead and look for contact information―especially a physical address.

Once you’ve found one, go ahead and put that address into Google Maps (or your mapping program of choice). By doing that, you can make sure the address actually belongs to a business rather than some random house in a neighborhood. And if you’re lucky, you’ll even get a street view that shows you a building with the lender’s logo on it.

Now, if you just find a PO Box rather than a street address, that’s not necessarily a bad sign―but it probably means you should do some more research about the loan company.

3. Look for company registration

At this point, you should have more than enough information to look up the lender in various databases. So use the lender’s address to see what state the lender operates in, and then find the website for that state’s secretary of state office. So if, say, your loan company is located in Utah, look up the Utah secretary of state. (This should be an easy Google search.)

The secretary of state’s website should have somewhere you can look up businesses by name. If the business is legitimate, you should see an entry with lots of details like these:

  • Business ID number
  • Current status (such as active or inactive)
  • Formation date
  • Other states the lender does business in
  • And other details about the business

If you don’t find an entry for your lender, it may be a loan scammer.

But even if you do find an entry, remember that it only tells you that you’re dealing with a real company. Unfortunately, the real company could still be conducting some kind of loan scam―so you may want to keep going with our next steps.

4. Check its BBB profile

With the lender’s name and address, you can also look up its profile on the Better Business Bureau (BBB) website.

Now, the lender’s BBB page may say it’s not a BBB-accredited lender―and that's totally fine. As we explain in our guide to the Better Business Bureau, accreditation really just means you’re willing to pay the BBB for a rating.

Instead, you’re looking for things like current alerts about government action (since it’s not a great sign when the government sues a loan company) or convincing complaints from customers about fraudulent activity.

If you don’t see anything like that, that’s a very good sign.

5. Read company reviews

At this point, you may want to look at lender reviews from actual borrowers.

You can start with the lender’s Better Business Bureau profile. Profiles often have reviews (which are separate from complaints). But don’t worry if the reviews aren’t very positive―financial institutions tend to get slammed on the BBB website. Again, you’re mostly looking for signs of scam lenders.

We’ve also found that Trustpilot often has plenty of lender reviews. In fact, many of our favorite lenders have thousands of borrower reviews on Trustpilot. Some newer lenders may not have that many reviews―but unless you want to be a guinea pig, we recommend sticking to a lender that has at least a few dozen reviews.

And don’t forget to look for reviews from lending experts, like the ones you’ll find here at Our lender reviews go in-depth on lenders and point out potential problems. So if we’ve found anything even remotely scammy about a lender, we’ll be sure to tell you. 

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6. Do some online sleuthing

You’re almost ready to take out a loan at this point. But first, you may want to run a quick interest search on your lender. This can help you find lawsuits, scandals, scams, and other information you might want to know.

For example, try these keywords in Google:

  • [Lender] + scam
  • [Lender] + lawsuit
  • [Lender] + government action
  • [Lender] + FTC

Even just looking up the lender name in the “News” tab of Google can sometimes bring up relevant stories.

Hopefully you won’t find anything, though. And in that case, you’re ready to start your loan application―but don’t let your guard down just yet.

7. Watch out for red flags

Even if everything has looked good to this point, we urge you to look out for red flags throughout your loan application process. After all, it’s possible for you to get contacted by a scammer that’s impersonating a real, legitimate loan company.

So watch out for these warning signs:

  • Saying you can get a low interest rate with bad credit. Yes, you can find business loans for bad credit. But low-interest business loans generally require an excellent credit score.
  • Promising you a loan for your brand-new business. Reputable lenders have minimum revenue and time in business requirements.
  • Requiring upfront fees on your loan application. Legitimate financial institutions don’t charge upfront fees―and they definitely don’t ask for payment in gift cards.

With any luck, though, you won’t see any of these issues crop up. Instead, you’ll submit your loan application, get a loan offer, receive your money, and pay off your loan―all without a hitch.

Legitimate upfront fees

If you’re working with a mortgage lender, you may have to pay fees like an appraisal fee or inspection fee before you close on your loan. And many lenders do charge fees (such as origination fees) when you get your money―just not when you first apply.

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The takeaway

By properly vetting a lender, you can protect yourself from identity theft and keep your money safe.

So before you get your next loan―whether you need a business loan, student loan, mortgage loan, or something else―make sure you’re dealing with a real lender. Look for important details, make sure it’s a real business, read lender reviews, and watch out for red flags.

That way, you can avoid fraud and just get the funds you need.

Want to know about some of the best legitimate business lenders out there? Check out the pre-vetted lenders on our list of the best small-business loans.

Related reading

Don’t qualify for a business loan? Get a personal loan instead.

Legitimate loan company FAQ

If you get scammed by a loan company, you should do a few things.

First, collect any documentation you can and write down some notes about your situation. This will help you with any later investigations.

Next, report the loan scam. You can report them to several different places:

  • Your local police
  • FTC (Federal Trade Commission)
  • Consumer Financial Protection Bureau (CFPB)
  • Internet Crime Complaint Center (IC3)

Then, to protect yourself, you should also contact credit bureaus. Ask each credit bureau (Equifax, Experian, and TransUnion) to freeze your credit so no one can take out new credit without your knowledge. You should also get a copy of your credit report (again, get a credit report from each bureau) to check for suspicious activity.

Your loan company will probably ask for your bank account information (because they need to know where to send your money), but this shouldn’t be part of your initial loan application. Expect a legitimate financial institution to ask about your bank account after you have a loan offer.

Most loan companies won’t ask for money upfront―that’s usually a sign of scam lenders. (This is called an advance fee loan scam.)

That said, a mortgage lender may require you to pay for things like an appraisal or inspection. So paying money before you get your loan isn’t always a red flag.


At, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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