How to Spot a Predatory Lender Before You Sign

Predatory lenders are everywhere — and they're getting harder to spot. Here's what to watch for before you sign anything.

Red Flag #1: No License or Registration

Every legitimate lender must be licensed in the state where they operate. Before you do anything, look them up on the NMLS Consumer Access database (nmlsconsumeraccess.org). If they're not listed, walk away.

Red Flag #2: Upfront Fees Before Loan Approval

Legitimate lenders do not charge fees before approving your loan. If a lender asks for an "insurance fee," "processing fee," or any payment before you receive funds, it's a scam.

Red Flag #3: Guaranteed Approval

No legitimate lender guarantees approval. If they don't check your credit or income, they're either a scam or charging predatory rates to make up for the risk.

Red Flag #4: Pressure to Sign Quickly

"This offer expires in 24 hours" is a manipulation tactic. A real lender gives you time to read the contract and shop around.

Red Flag #5: No Physical Address

Check if the lender has a real business address. Search them on Google Maps. If the address doesn't exist or leads to a UPS store, that's a major warning sign.

What to Do Instead

Before working with any lender, read what real borrowers say about them. LenderBureau only publishes reviews backed by actual loan documentation — so you can trust what you read.