Bad Credit
How to Check If a Personal Loan Company Is Legitimate
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”
While there are plenty of honest personal loan companies, there are also personal loan scams to keep your eye out for. But don’t worry — there are several ways to double-check if a loan company can be trusted.
Here’s how to tell if a loan company is legitimate, plus what to do if you’ve been scammed:
How to check if a loan company is legitimate
If you’re looking to take out a personal loan, here are a few ways to vet a lender before giving them your personal information:
- Look for online reviews: Online reviews can be a great way to gauge what others’ experiences with the company have been like. If a company has either no reviews or only a tiny amount of glowing reviews that all seem to be written by the same person, it could be a major red flag.
- Make sure the company is registered in your state: Before a lender can do business in a state, they must first have licenses from state regulatory agencies. You can check with your individual state’s agency to see if the lender is able to work with you.
- Check with the Better Business Bureau: While the Better Business Bureau (BBB) isn’t a definitive source for checking if a loan company is legitimate, it can help you see if the company has a history of treating other customers fairly. Watch out for companies with zero reviews — these might be loan scams.
- Make sure the company’s website is secure: Look for the padlock symbol in the URL bar of your browser and check that it starts with “HTTPS” as opposed to “HTTP.” Both of these indicate that communications between your device and the site are encrypted and therefore secure.
- Check its contact details: If the company has a phone number, call and ask verifying questions. If there’s a physical address listed, look it up with Google Maps to see if the result is actually a business.
In addition to verifying the lender you’re interested in, it’s also a good idea to consider how much a new loan will cost you over time. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
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Are loan forgiveness companies real?
There are some companies and organizations that can help you manage your debt, such as the National Foundation for Credit Counseling.
However, none of these companies can grant you loan forgiveness, regardless of the type of loan you have.
The only type of loan forgiveness available is for federal student loans. Generally, you’ll have to work in a certain field and make payments for a specific amount of time to qualify.
Keep in mind: You can pursue student loan forgiveness on your own without the help of a company. And you don’t have to pay for it. If a company tries to charge you fees for loan forgiveness help, run the other way — it’s a scam.
How do loan scams work?
Loan scams can show up in a variety of ways, but the basic idea is the same: They trick you into paying money and then don’t come through with the loan funds.
Some common tactics of scammers include:
- Not requiring a credit check
- Demanding upfront payment (such as an application or credit check fee) before processing your application
- Asking you to send them money in a way that’s harder to trace and doesn’t involve bank accounts, such as with a prepaid gift card
- Pressuring you to make an instant decision
However, there are legitimate lenders who offer bad credit loans. While these loans generally come with higher interest rates, you won’t have to worry about being taken advantage of.
How to spot a personal loan scam
As you shop around for a personal loan, ask yourself the following questions to detect any potential scams:
Do they ask for money upfront? You should never have to pay money before you get your loan funds. A scammer might also require unusual payment methods, such as a prepaid credit card that can’t be tracked. Keep in mind that many legitimate personal loans come with an origination fee, which is normal. But if the lender is demanding other fees before you get your money, it’s likely a scam.
Are they using high-pressure sales tactics? Claiming that it’s a “limited-time offer” and that you need to “act now” are just a couple of ways a scammer might pressure you to make a fast, uninformed decision.
Do they check your credit? Personal loan lenders typically use a credit check to determine your creditworthiness. While there are some no-credit-check personal loans (like payday loans, pawn shop loans, and car title loans), other companies promising not to check your credit are likely a scam.
Did they approach you about the loan? Some lenders do advertise by mail with preapproved loan offers. But if a company approaches you out of the blue with an offer for a loan, it could be a scam.
Do they have a physical address? A legitimate company should be able to provide a physical address that you can verify. If you can’t find location information for the supposed company, it could be a front for a scam.
Do you feel comfortable with the company? Go with your gut. If something feels fishy to you, it probably is.
Learn More: Where to Get a Personal Loan
What to do if you have been scammed
Even after taking all of these precautions, it’s still possible to fall victim to personal loan fraud. If you’ve been scammed, follow these steps:
- Collect evidence: Document every piece of information you can about the loan, such as any agreements you signed, emails, letters, or phone calls. Also document your bank account statements, if applicable.
- File a police report with your local police department: You might need this report going forward to prove to businesses and organizations that you were targeted by a loan scam.
- File a report with appropriate agencies: After filing a police report, file a complaint with other relevant authorities, including the Federal Trade Commission, the Consumer Financial Protection Bureau, your State Attorney General, and the BBB. These organizations might be able to help you get your money back or at least prevent the scammers from harming other people.
- Check your credit report: If you provided sensitive information (such as your Social Security number), check your credit to make sure the scammers don’t also steal your identity. You can use a site like AnnualCreditReport.com to review your credit reports from each of the credit bureaus. You might also consider placing a freeze on your credit report just in case.
If the scammers got ahold of your credit card information, you might be protected by your card issuer. Under the Fair Credit Bill Act, you’re liable for only $50 of unauthorized credit card charges. But depending on your card issuer, you might not be liable for any of the charges at all.
Credible lets you compare legitimate loan companies
If you decide to get a personal loan, it’s essential to make sure that the loan companies you’re considering are legitimate. One way to do this is to compare lenders through a reputable personal loan marketplace like Credible.
With Credible, you can compare your prequalified rates in two minutes from multiple lenders that have been thoroughly evaluated and vetted. Credible wants to help you find the right for you and will only recommend lenders you can trust.
| Lender | Fixed rates | Loan amounts | Min. credit score |
|---|---|---|---|
 | 9.95% – 35.99% APR | $2,000 to $35,000** | 580 |
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state. **Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. | |||
 | 6.49% – 29.99% APR | $5,000 to $35,000 | 740 |
| |||
 | 5.99% – 29.99% APR | $5,000 to $35,000 | 640 |
| |||
 | 6.99% – 24.99% APR | $2,500 to $35,000 | 660 |
| |||
 | 7.99% – 29.99% APR | $10,000 to $35,000 | Not disclosed by lender |
| |||
 | 10.68% – 35.89% APR | $1,000 to $40,000 | 600 |
LendingClub personal loans review †Based on a majority of borrowers from LendingClub’s marketing partners who were issued loans between 1/1/19-12/13/19. The time it takes for your loan to be funded may vary. | |||
 | 15.49% – 35.99% APR | $2,000 to $25,000 | 585 |
| |||
 | 3.99% – 19.99% APR | $5,000 to $100,000 | 660 |
| |||
 | 6.99% – 19.99% APR1 | $3,500 to $40,0002 | 660 (TransUnion FICO®️ Score 9) |
1Rate reduction available for AutoPay. 2You may be required to have some of your funds sent directly to pay off outstanding unsecured debt. 3After making 12 or more consecutive monthly payments, you can defer one payment as long as you have made all your prior payments in full and on time. Marcus will waive any interest incurred during the deferral and extend your loan by one month (you will pay interest during this extra month). Your payments resume as usual after your deferral. Advance notice is required. See loan agreement for details. | |||
 | 18.00% – 35.99% APR | $1,500 to $20,000 | None |
| |||
 | 5.99% – 24.99% APR | $5,000 to $40,000 | 640 |
| |||
 | 6.49% – 17.99% APR | $600 to $20,000 (depending on loan term) | 670 |
| |||
 | 6.95% – 35.99% APR | $2,000 to $40,000 | 640 |
| |||
 | 5.99% – 18.83% APR | $5,000 to $100,000 | Does not disclose |
| |||
 | 7.99% – 35.97% APR | $1,000 to $50,000 | 580 |
| |||
 | 8.13% – 35.99% APR4 | $1,000 to $50,0005 | 580 (in most states) |
4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved. 5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. 6If you accept your loan by 5pm EST (not including weekends or holidays), loan funds will be sent to your designated bank account on the next business day, provided that such funds are not being used to directly pay off credit cards. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law. | |||
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
About the author
Indigo® Platinum Mastercard®
- Intro bonus: No current offer
- Annual fee: $0 – $99
- Regular APR: 24.90%
- Recommended credit score: 300-670 (Bad to Fair)
The Indigo Platinum Mastercard can help you build a better credit score (if you practice good credit habits) with monthly reporting to the three credit bureaus. Unlike many other options for building credit, this is an unsecured credit card, so it doesn’t require a cash deposit as collateral. But you may incur an annual fee, depending on your creditworthiness when you apply.
At a Glance
- Monthly payment reporting to the three credit bureaus for people with limited credit history or poor credit
- Annual fee of $0, $59, or $75 the first year, depending on your creditworthiness ($75 version charges a $99 annual fee after the first year)
- Unsecured credit card with no security deposit required
- Standard variable APR of 24.9%
Pros
Available to individuals with no credit history or low credit scores
Unsecured credit card
Annual fee could be as low as $0 depending on your creditworthiness
Monthly payments report to all three credit bureaus
Cons
No rewards
Annual fees vary depending on creditworthiness, and you won’t know your fee until you apply
High variable APR
$300 credit limit
Additional Card Details
The Indigo Platinum Mastercard is geared toward people with “less than perfect credit” or minimal credit histories. Like other credit-building card options, it doesn’t offer a lot of perks.
You will get a few benefits, like online account access and reporting to all three credit bureaus (Equifax, Experian, and TransUnion). You can also choose from multiple card designs for no extra charge.
Prequalification is another benefit of the Indigo Platinum Mastercard. Prequalifying is a great way to gauge your approval odds and the terms of your offer without filling out a full application and undergoing a credit check, which can temporarily hurt your credit score. If you do choose to apply after pre-qualifying, you’ll still be subject to credit approval with a hard credit inquiry.
Should You Get this Card?
Many credit cards available to people with bad credit scores are secured credit cards that require a cash deposit as collateral. The Indigo Platinum Mastercard offers an alternative to secured cards for building better credit, but has its own drawbacks.
For one, your credit limit is capped at $300. If you’re approved for a version of this card with an annual fee, it’ll be automatically applied, which means your starting limit could be as low as $225.
The annual fee itself is another drawback. The amount you’re charged will depend on your creditworthiness when you apply. If your approval comes with an annual fee, that $59 or $99 ($75 the first year) charge can quickly add up over time. Consider other cards with no annual fee (and even no annual fee secured credit cards) that may make better long-term options for building a healthier credit profile.
How to Use the Indigo Platinum Mastercard
Because the Indigo Platinum Mastercard doesn’t offer any rewards and your credit limit is just $300, you should use this credit card for the sole purpose of improving your credit score. Only make purchases you can afford to pay off when your statement is due, and pay your bill on time to avoid up to $40 in late fees and a penalty APR up to 29.9%.
Pro Tip
Building a great credit score, whether you’re starting from no credit history or repairing damaged credit, requires a foundation of good credit habits your credit card can help establish — such as timely payments, low credit utilization, and paying off your balances in full each month.
The Indigo Platinum Mastercard’s low credit limit means you’ll need to be extra careful with your spending to improve your credit score. Using more than 30% of your available credit can hurt your credit utilization rate — one of the most influential factors in your credit score. With a credit limit of $300, that means you should keep your charges below $90.
The goal of a card like Indigo Platinum Mastercard is to, over time, improve your credit score enough to qualify for a better credit card. Use this card to establish and maintain the healthy credit habits (like timely payments in full, low utilization, and consistently paying down balances) that will improve your credit long-term, and help you qualify for a card that’s better suited for your spending habits in the future.
Indigo Platinum Mastercard Compared to Other Cards
Indigo® Platinum Mastercard®
- Intro bonus:
No current offer
- Annual fee:
$0 – $99
- Regular APR:
24.90%
- Recommended credit:
300-670 (Bad to Fair)
- Learn more at our partner’s secure site
Citi® Secured Mastercard®
- Intro bonus:
No current offer
- Annual fee:
$0
- Regular APR:
22.49% (Variable)
- Recommended credit:
(No Credit History)
- Learn more at our partner’s secure site
Capital One QuicksilverOne Cash Rewards Credit Card
- Intro bonus:
No current offer
- Annual fee:
$39
- Regular APR:
26.99% (Variable)
- Recommended credit:
(No Credit History)
- Learn more at our partner’s secure site
Bottom Line
EDITORIAL INDEPENDENCE
As with all of our credit card reviews, our analysis is not influenced by any partnerships or advertising relationships.
If your credit score isn’t great and you want to start building the credit foundation to move in the right direction, the Indigo Platinum Mastercard can help by reporting your usage to the three credit bureaus — if you practice good habits that will reflect positively on your report. But you may also take on a pricey annual fee and risk high utilization due to the card’s low credit limit. Before applying, consider other cards for bad credit and secured credit cards with no annual fee that may better serve your credit-building goals.
Frequently Asked Questions
The Indigo Platinum Mastercard is a decent option for consumers with poor credit who don’t want to put down a security deposit on a secured credit card. Check your prequalification terms, and compare other options for people with fair credit or bad credit before applying.
The credit limit for the Indigo Platinum Mastercard is $300. If you get approved for a version with an annual fee, your annual fee will be deducted from your credit limit.
The Indigo Platinum Mastercard is an unsecured credit card, so you do not have to put down a cash deposit as collateral.
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