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Typically, domestic wire transfers are available within a business day, while international wire transfers can take up to five days. In other words, whether sending money to relatives or completing a business transaction, wire transfers can quickly move money from one bank account to another, but they usually don’t go through instantly.

Below, you’ll learn the steps for making a wire transfer, how timing can vary, and alternative methods for sending money.

Factors That Affect How Long a Wire Transfer Takes

How long it takes to wire money depends on a few factors. Wire transfers exchange funds between two parties, and the timing, where the sender and recipient are located, and how funds are transferred can all influence its duration.

•  Timing: While bank holders may have 24/7 access to ATM withdrawals, the same isn’t true for wire transfers. Banks and financial institutions may set cutoff times in the day for processing wire transfers. If a wire transfer is initiated after the cutoff time of the sender’s or recipient’s bank, it will be processed the following day. For this reason, it won’t be available in the recipient’s bank account the same day.

  Also, wire transfers may be completed in batches rather than in real time. So even if you submit a wire transfer at 11am, the next batch might not be processed until, say, 3pm. This could delay the arrival of funds to the recipient’s bank.

•  Geographic location: Whether you’re sending the money within the U.S. or abroad matters. The Expedited Funds Availability Act requires that wire transfers made within the U.S. are available to recipients within one business day. But in terms of how long it takes for a wire transfer to go through internationally, that usually takes between one and five business days. Such factors as the number of intermediaries, time zone differences, and regulations in the recipient’s country can impact timing.

•  Transfer method: There are several ways to wire funds. You can wire money for immediate transfer domestically with the Federal Reserve Wire Network (Fedwire). Another option is the Clearing House Interbank Payments System (CHIPS), which processes transactions in batches, making it cheaper but slower than Fedwire. Though CHIPS can process international transfers, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is often used for making electronic payments abroad. SWIFT transfers undergo anti-fraud and anti-money laundering review processes, adding time to when the funds are available to the recipient.

Recommended: How to Transfer Money From One Bank to Another

What Do You Need to Complete a Wire Transfer?

To send funds with a wire transfer, you’ll typically need to provide personal and banking information for yourself and the recipient. These requirements can vary depending on whether you’re transferring funds with a bank or non-bank provider, but may include:

•  Your driver’s license, or another valid government-issued photo ID

•  Your bank account and routing number, if using a provider other than your bank

•  The amount of money being transferred

•  Possibly the purpose of the transfer, especially for international wire transfers

•  Recipient’s personal information, including their full name, address, and contact information

•  Their banking information, including the recipient’s bank account and ABA or routing number, and their bank address and phone number, especially when transferring abroad

•  If transferring money outside the U.S., the SWIFT Code or Business Identifier Codes (BIC) and the National ID or IBAN number

Keep in mind that wire transfers are usually irreversible once they’ve cleared, unless a mistake is made by the sending or receiving bank. Double-checking to confirm the details before sending can avoid delays and help ensure the funds are received.

Steps to Making a Wire Transfer

Once you have the required personal and banking information, follow these steps to make a wire transfer.

1.   Verify funding availability: Check your bank account to make sure you have enough money for the wire transfer. Funds must be available at the time of authorization to complete the wire transfer.

2.   Choose a provider: Senders can opt to wire money with a bank or non-bank transfer service (such as Western Union). The cost of a wire transfer varies by provider, so be sure to compare fees before making a decision.

3.   Fill out the forms carefully: To send a wire transfer, you’ll need to provide certain personal and banking information to the provider. Forms may be available online or completed in person. Be sure to double-check the account numbers, spelling of names, and other details before submitting.

4.   Factor in fees: Providers can set their own rates for wiring money, with international transfers typically costing more than domestic transfers. Confirm these bank fees upfront and verify your account has sufficient funds to cover them. For outgoing domestic wire transfers, fees are often between $0 and $40, while international wire transfers can be between $0 and $50, depending on your account and other factors.

  Keep in mind that the recipient’s bank may charge fees on top of what was paid to wire the money. Depending on the nature of your transaction, the recipient could ask you to cover those fees.

5.   Get a receipt: It’s a good idea to keep a record of the transaction. Since wire transfers aren’t always immediate, having the confirmation or tracking number handy is useful for monitoring the payment.

Can You Speed Up a Wire Transfer?

Wire transfers are often used when money needs to be moved quickly. When time is of the essence, it may be possible to expedite the wire transfer. This option depends on the financial institution or provider used. It may be easier to speed up a wire transfer if the transaction is between two accounts held at the same bank. In some cases, a fee may be charged to move the money more quickly.

Being mindful of a provider’s cutoff time for sending and receiving wire transfers can help expedite a wire transfer. The cutoff time may occur before closing hours, and any request received after this time won’t occur until the following business day.

Can You Slow Down a Wire Transfer?

If you’ve made an error and want to pause or recall a wire transfer, it’s important to contact your provider immediately. You could have a window of opportunity to recall or pause the transfer for corrections if a cancellation notice is received before it’s credited to the recipient’s account. Typically, it’s a very small window of time, so act as soon as possible.

Do Wire Transfers Go Through on Holidays?

Wire transfers are typically only processed on business days and prior to a bank’s cutoff hours. If you wire money on a bank holiday or weekend, it likely will be delayed until the next business day.

When sending funds internationally, factoring in holidays and weekends merits additional consideration. For instance, a number of countries in the Middle East observe the weekend on Friday and Saturday, not Sunday.

Alternatives to Wire Transfers

Wire transfers aren’t the only option available for moving money between bank accounts.

Here are a couple alternative ways to send money to someone.

•  Automated Clearing House (ACH) transfer: ACH payments allow businesses and individuals to transfer funds between financial institutions, such as banks, through an electronic network. This type of bank-to-bank payment requires an initial setup and takes more time to send funds than wire transfers. Usually, transfers take one to three days, but expedited service may be available. However, ACH fees are typically lower than wire transfer fees, and some banks don’t charge customers for them at all, factoring such costs into their overall fee structure. Check with your financial institution about whether you’ll be assessed a fee.

•  Peer-to-peer (P2P) payment: A growing number of apps, such as Apple Pay and PayPal, can facilitate electronic payments between two users. P2P apps can link to a bank account, debit card, or credit card to transfer money quickly. However, transferring the funds from the app to a bank account can take several days or incur a fee for immediate transfer. Also, P2P apps may set limits on transfer amounts and whether you can send money abroad.

Recommended: ACH vs EFT: What Is the Difference?

The Takeaway

Wire transfers do not typically go through immediately. The speed will depend on several factors, including when you initiate the transfer, where it’s being sent, and the transfer method. Domestic transfers are usually completed within one day, while international ones can take between one and five days. In some cases, it may be possible to expedite a wire transfer.

There are multiple ways to transfer and receive money. SoFi currently offers incoming and limited outgoing domestic wire transfers, and our bank accounts have plenty of other features that make managing and sending money easy.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

Are wire transfers immediate?

Wire transfers are typically completed within a day for domestic transactions and within one to five days for international ones, though there may be options available to expedite the transfer. Factors that can impact timing include the cutoff hours of financial institutions and whether it’s a business day or a weekend or holiday. In addition, transferring funds between two accounts at the same bank can often move more quickly than transactions between two different banks.

What happens if a wire transfer gets delayed beyond your control?

If a wire transfer is delayed, it can be wise to notify your bank or provider immediately to investigate the claim. They should be able to advise you on what the issue is and what (if anything) can be done to move the payment ahead quickly. You will likely want to let the intended recipient know as well. Keeping the receipt and having the reference number on hand can help you track the transfer.

Do international wire transfers take longer than domestic?

International wire transfers typically take longer than domestic wire transfers. Plan for up to five business days before the funds are available to the recipient. Domestic wire transfers are usually completed within one business day.

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Photo credit: iStock/mladenbalinovac

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Loan sharks get their name from the predatory sharks of the sea, only they set their sights on borrowers in desperate need of money instead of schools of fish. Loan sharks often use threats of violence (and, in some cases, actual violence) to intimidate borrowers into paying back their loans — often at criminally high interest rates.

Loan sharks are illegitimate lenders, and even if you’re in serious and immediate need of cash, there are other options available to you.

Loan Shark Definition

A loan shark is a person who loans money at unlawfully high interest rates and may use intimidation, primarily threats of violence, to ensure borrowers repay their debts. In some cases, a loan shark may be connected to a criminal organization or might at least imply this to intimidate borrowers.

People who borrow from loan sharks often believe they have no other options, and in fact, loan sharks might work hard to create that illusion. By lending without conducting background checks and reviewing credit reports, loan sharks also make it easier for borrowers to get money from them rather than through traditional channels.

Recommended: Guide to Financial Hardship Loans

Are Loan Sharks Illegal?

Loan sharks who use threats of violence or charge unlawfully high interest rates are breaking the law and can face criminal charges.

Though it varies by state, there are laws limiting how much interest a lender can charge on various types of loans. The maximum interest rate is called the usury interest rate — and loan sharks, by definition, charge rates higher than this.

Lenders should be licensed and, when legitimate, offer financial disclosures and have underwriting standards. Illegitimate lenders like loan sharks operate outside these requirements.

How Does a Loan Shark Work?

Loan sharks have access to a large amount of capital to offer loans to borrowers who feel like they have no other options. Rather than running credit checks and calculating a fair interest rate within legal limits based on a person’s financial history and credit score, loan sharks offer money with the threat of violence to the borrower — and their family — as an assurance that the debt will be repaid.

While we often think of loan sharks as being seedy individuals in low-lit, smoke-filled back rooms (thanks, Hollywood), in reality, a loan shark could be any individual who uses threats and intimidation to collect a debt. What’s more, any predatory lenders who charge interest rates above the legal limit are also considered loan sharks.

What Can I Do About a Loan Shark Debt?

If you have loan shark debt, the lender has no legal right to your money. They did not follow the law in lending to you, so they cannot use the law (i.e., take you to court) to ensure you pay them back.

However, they may threaten violence if you don’t pay up. And in some cases, they could follow through on that violence.

If you are concerned about your and your family’s safety, you can contact the police. Loan sharks can face both civil action complaints and criminal prosecution.

Loan Sharks vs. Predatory Lenders

A loan shark is a type of predatory lender, but not every predatory lender is a loan shark. It’s the old “all squares are rectangles, but not all rectangles are squares” lesson.

Predatory lending broadly refers to any type of lending practice that misleads consumers to take out loans they can’t afford, often through questionable and aggressive advertising and sales tactics. Those loans are often high in fees and interest.

Unlike loan sharks, some predatory lenders — including actual financial institutions — technically operate within the law. Instead of charging unlawful interest rates, they may pile on fees, build balloon payments into a loan, convince you to purchase unnecessary products or services, or pressure less educated consumers to refinance their homes, even when it’s not in their best interest.

These lenders often intentionally target underbanked demographics and communities where there’s less access to alternative credit access. They can do this with targeted mailers, TV ads, phone calls — you name it. Those with low credit scores may think these loans are their only option.

Common examples of predatory loans include:

•  Payday loans

•  Auto title loans

•  Subprime personal loans

And, of course, loans from loan sharks.

Loan Shark Alternatives

No matter how dire your financial situation is, taking money from a loan shark is generally considered a bad idea. Loan sharks typically operate outside of the law and often use threats of violence to ensure borrowers pay back their loans with very high interest.

If you’re in need of money, consider your alternatives. Here are some to keep in mind:

Friends and Family

Borrowing money from friends and family is never easy, but if it means avoiding a loan shark, it may be worth asking your loved ones for help. Be prepared for them to say no, and always thank them for listening.

Personal Loan

If you can’t borrow the money from a loved one — or aren’t comfortable asking — a personal loan may be your next-best option. Depending on the lender, you can get personal loans for as little as $500 or $1,000 or as much as $100,000 or more.

Personal loan rates and terms vary. You may be more likely to get approved for a better loan if you have a strong credit score. However, if you have poor credit (more common for borrowers seeking out loan sharks), you might be stuck with personal loan lenders who charge high fees and average annual percentage rates, or APRs, for smaller loan amounts.

The average personal loan interest rate varies by credit score, but other factors, such as debt-to-income ratio and your employment status, can impact the APR you’re offered.

Recommended: Is There a Minimum Credit Score for Getting a Personal Loan?

Credit Card

If you have access to a credit card with a high enough credit limit — and the person or company you owe accepts credit card payments — it’s better to pay with plastic than a predatory loan.

Sure, credit card APRs can be high, and you might risk slipping deeper into credit card debt. But credit card issuers are bound by strict state usury interest rates that, theoretically, should be lower than the illegal limit set by a loan shark.

Payday Loan

Payday loans are a common last resort for people in a bind and one you may want to think twice about. While these loans often don’t require credit checks and can get you cash fast, they often come with high interest rates and other potential fees that can make them exorbitantly expensive. In fact, payday lenders often earn exceptions from state governments that allow them to charge extremely high annual interest rates (sometimes up to 400%) without breaking the law. (In that way, they’re technically different from loan sharks.)

The Takeaway

Loan sharks take advantage of borrowers who feel they’re at the end of their rope, offering loans with unlawfully high interest rates and often using threats of violence to ensure borrowers pay up. Borrowers looking for a way out may feel like they have nowhere else to turn, but there are options such as personal loans, loans from loved ones, and even credit cards.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

What is a loan shark?

A loan shark is someone who lends money to desperate borrowers at exorbitantly high interest rates, well above the legal limits. Loan sharks don’t run credit checks, which can make them appealing to borrowers with bad credit. In some cases, loan sharks may threaten — or occasionally use — violence to make sure borrowers repay their debts.

Why are loan sharks so bad?

Loan sharks are considered bad because they offer loans at unlawfully high interest rates — sometimes more than 400% — to borrowers who feel like they have no other option. They may also use threats of violence when collecting debt.

What are alternatives to loan sharks?

No matter how much money you need, there are alternatives to loan sharks that are worth exploring. Some options include asking family and friends for help, taking out a personal loan, paying with a credit card, or even taking out a payday loan, though the latter option has its own share of drawbacks.

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Photo credit: iStock/Hammarby Studios

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This article is not intended to be legal advice. Please consult an attorney for advice.

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While personal loans can provide much-needed financial assistance, it’s important to be aware of potential scams that lead to financial loss and identity theft.

Unscrupulous lenders can hook you in by offering a loan with seemingly good terms when, in fact, you could be charged exorbitantly high interest rates and hidden fees. Scam artists, on the other hand, might take upfront fees and/or your personal information and then disappear without ever giving you a loan.

You can protect yourself, however, by understanding common personal loan scams and knowing how to identify legitimate lenders. Here’s what you need to know.

What Are Examples of Personal Loan Scams?

There are a few types of personal loan frauds that crop up with some regularity. These include debt consolidation scams, no-credit-check-loan scams, and loan fees scams. Here’s a closer look.

Debt Consolidation Scams

Debt consolidation is a legitimate way to pay off debt. It entails taking out a new loan (ideally with better rates or terms) and using it to pay off other existing loans or credit cards. There are many legitimate debt consolidation companies that can help individuals pay down their debt. And then there are scammers.

Scammers may offer debt consolidation loans that promise to lower your monthly payments and interest rates. However, they often charge high upfront fees and fail to provide the promised services, leaving you in a worse financial situation.

No-Credit-Check Loan Scams

No-credit-check loan scams target borrowers with a poor or limited credit history. There are legitimate lenders that consider factors other than your credit score, but they are likely to do at least a soft pull on your credit score (which will not affect it).

Scammers, on the other hand, often promise funds without any kind of credit check. They may ask for fees and personal information upfront and then disappear. Or, they might provide a loan but charge exorbitant interest rates.

Loan Fee Scams

Scammers may request upfront fees for processing or guaranteeing a loan. Generally, you should never pay anything upfront — it’s highly likely that your money will disappear, and you will not receive a loan. Legitimate lenders typically deduct any fees from the loan amount.

How Do I Know If I’m Being Scammed for a Loan?

Identifying loan scams requires vigilance and attention to detail. Here are 12 warning signs to look out for.

1. Phone Offers

If you receive a phone call offering you a guaranteed personal loan or unusually low interest rate, it’s most likely a scam. Reputable lenders do not cold-call potential customers. It is illegal, in fact, to make loan offers over the phone. You ‘ll want to look for lenders that advertise through traditional online and mass media.

2. Upfront Fees

While some upfront fees are charged by legitimate lenders, such as origination fees, these fees are usually deducted from the loan amount before the borrower receives the funds and only after the loan is approved. Be wary of any lender that asks for payments before providing the loan funds.

3. Wire Transfers

Scammers will often request loan payments via wire transfer. Legitimate lenders, on the other hand, typically accept payments through recognized and secure channels, such as automatic debit, online payments, or mailing a check to the lender. If you wire funds, there is no way to recover them.

4. Credit History

Be wary of lenders who claim to offer loans without checking your credit history. Trustworthy lenders typically base their loan terms on your ability to repay the loan. This involves looking at your credit, sometimes getting reports from all three major consumer credit bureaus (Equifax®, TransUnion®, and Experian®).

5. Copycat Name

Online loan scammers may use a business name or website that seems genuine. They may copy a well-known logo and website to trick you. Be sure to verify the lender’s identity by conducting thorough research online, including a lender search by name with both the Better Business Bureau (BBB) and the Consumer Finance Protection Bureau (CFPB).

6. Personal Information

Scammers will often try to get your bank account details, passwords, Social Security number, and other personal information in order to drain your checking account and/or run up charges on your credit card.

If they have enough of your personal information, they may even be able to take out loans or obtain credit cards in your name. Always check if a lender is legitimate before giving them any of your personal information.

Recommended: How to Report Identity Theft

7. State Registration

A lender or loan broker must register in the states where they do business. One way to vet a lender is to go to their website and make sure it lists the states where the company can legally conduct business. If you don’t see a list of registered states, it’s a sign the company is fraudulent.

If they do list states, it’s a good idea to verify the information with your state regulator or attorney general.

8. Reviews

It can be helpful to research the lender online and read reviews from previous customers. Genuine lenders will have positive reviews and a good reputation. You can also check the BBB’s website to see if there are complaints connected with its business profile. The BBB also has a Scam Tracker that is worth checking as well.

9. Customer Service

Reputable lenders that offer personal loans generally have phone numbers you can call and speak with a live person, rather than a chatbot. It’s a good idea to call the lender’s published customer service number, ask questions, and gauge their responsiveness and professionalism. Legitimate lenders prioritize customer service.

10. Hidden Fees

Some legitimate lenders do not disclose their fees on their website; however, they are required to be transparent about fees and terms when they give you a loan offer. Be sure to carefully review loan documents for hidden fees or terms that differ from what was initially discussed.

11. Prepaid Credit Card

Scammers often request payment via prepaid credit cards. Legitimate lenders typically accept payments through secure methods, such as bank transfers or online payment platforms.

12. No Physical Address

Trustworthy lenders have physical office addresses. Be cautious if the lender only provides a PO Box or has no physical presence. If they provide an address, it’s a good idea to look it up on Google Maps or other mapping software. If their address is suspect, their services most likely will be too.

What to Do If You Are Scammed

If you believe you have fallen victim to a personal loan scam, you’ll want to take the following steps.

1. Gather Documents

Compile all relevant documents, including loan agreements, payment receipts, and communication with the scammer.

2. Contact Authorities

It’s a good idea to contact your local law enforcement — by filling out a police report, you’ll have an official record.

It’s also wise to contact agencies specializing in oversight, including your state attorney general’s office, the Federal Bureau of Investigation (FBI), the Federal Trade Commission (FTC), and the BBB. When they have your information, these agencies can better serve and protect other consumers.

3. Contact Your Bank and Creditors

You’ll want to notify your bank and credit card company about the scam. They can advise you on necessary steps to protect your accounts and finances.

4. Set Up Fraud Alerts

You may want to contact one of the three credit bureaus, Experian, TransUnion, and Equifax, and ask them to place a fraud alert on your credit report. This notifies lenders that you’ve been a victim of fraud so they can take extra measures to verify your identity when they get an application for credit in your name. You only need to contact one bureau — that bureau will contact the other two automatically.

Signs of a Legitimate Loan Company

You can be assured that a company is a legitimate lender by doing your due diligence. Here are key things to look for.

Valid Contact Information

Legitimate lenders have valid contact information, including a physical address and a working phone number.

Registered

You’ll want to make sure the lender is registered and authorized to operate in your state. You can check with your state’s regulator or attorney general.

Better Business Bureau

It’s wise to verify the lender’s rating and accreditation with the BBB. A good rating and positive customer reviews indicate legitimacy.

Good Reviews

Be sure to read verified reviews from previous customers to get a sense of their experiences. Legitimate lenders will have positive reviews and a good reputation.

Get a Legitimate Personal Loan

To secure a legitimate personal loan, follow these guidelines:

•  Research potential lenders thoroughly.

•  Compare loan offers and interest rates from multiple reputable lenders.

•  Read loan agreements carefully, ensuring you understand all terms and fees.

•  Ask questions and seek clarification before signing any contracts.

•  Protect your personal information and be cautious about sharing it with a lender you’re unsure about.

Recommended: Personal Loan Calculator

The Takeaway

You can protect yourself from personal loan scams by familiarizing yourself with common tactics and knowing how to identify legitimate lenders. Remember to thoroughly research lenders, review loan terms carefully, and never provide personal or financial information without verifying the lender’s legitimacy.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

What are some examples of personal loan scams?

There are several examples of personal loan scams to be aware of: Advance fee scams, which involve asking for upfront fees before the scammer disappears; guaranteed approval scams, which steal upfront fees and personal information; identity theft scams, in which scammers pose as legitimate lenders and steal sensitive personal details; and phishing scams, which make use of fraudulent emails or text messages.

How do I know if I’m being scammed for a loan?

Some signs that you may be being scammed for a loan include upfront fees (legitimate lenders deduct fees from the loan amount); unsolicited phone calls or emails offering guaranteed loans or unusually low-interest rates; requests for loan payments via wire transfer or prepaid debit cards; and “no credit check” loans. Also check for negative reviews online.

What do I do if I get scammed?

As soon as you suspect that you have been scammed, consider these steps: Gather all relevant documents, including loan agreements, payment receipts, and communication with the scammer; then report the scam to your local law enforcement agency and provide them with all the information you have gathered, as well as informing your bank and credit card company. Also be sure to monitor accounts and set up fraud alerts to protect your identity and credit.

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Photo credit: iStock/Moyo Studio

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Rental scams are an all too common occurrence, costing would-be renters an estimated $12.5 billion in 2024 alone. In today’s competitive rental market, prospective tenants can be eager to sign a lease and may ignore warning signs. While scams take many different forms, any of them aim to deprive innocent victims of their money.^[1]

If you’re in the market for a new place to live, learn how to spot the signs of a rental scam.

Common Types of Rental Scams

Rental fraud can be hard to spot as common scams may use sophisticated approaches to target their victims. The people behind the scam count on renters not catching on until it’s too late and their money is gone. They also leverage the fact that the housing market can be highly competitive and many people rely on technology (such as video tours) to review options vs. turning up in person.

Here are some of the most common rental scams making the rounds. It’s worth knowing that while these scams occur on year-round leases, many are also perpetrated on short-term rentals, such as those for vacation homes or off-campus student housing.

The “Phantom” Rental: Fake Listings

Phantom rentals involve a property that doesn’t actually exist. Fake listings can look like the real thing, complete with photos and detailed descriptions of the property. As convincing as these listings may look, the property is actually made up.

This type of scam works by encouraging people to rent the property without seeing it in person. Scammers may offer excuses as to why they can’t show it to you (say, business travel or a family medical emergency), or pressure you to pay the deposit and first month’s rent to get the keys. Once you hand over the money, the scammer disappears.^[2]

The “Hijacked” Ad: Real Listings, Fake Contact

Some scammers commit rental fraud using real listings for homes, apartments, or other properties.

They’ll find a property that looks promising, copy the photos and descriptions, and use them to create a new listing. You contact the number in the listing expecting to talk to a legitimate rental agent, but you’re really talking to the scammer. Based on images and videos, you pay a deposit in good faith to the scammer, who pockets your money.^[2]

The “Bait and Switch”: Property Isn’t as Advertised

Bait and switch is a deceptive marketing tactic in which one thing is advertised but something entirely different is delivered.^[3]

With these types of rental scams, you may be wowed by photos of the property or a detailed description. You go to check it out, or even sign a lease sight unseen, only to find out that what you’re paying for and what you expected to get are two different things. The actual property doesn’t match with what you believed you were renting.

The “Payment Redirect”: Impersonating a Landlord

Some scammers will go as far as pretending to be the property’s owner to deceive people into signing fraudulent rental agreements. They may even be able to clone the landlord’s email address or payment portal to cheat people out of their money.

The most persuasive scammers convince their victims to send payment for a deposit or rent to them, without verifying that they are who they say they are. Payment redirect scams may involve multiple people working together to facilitate fraud.^[4]

How to Spot a Potential Rental Scam (Red Flags)

Some rental scams may be more obvious than others. If you want to know how to avoid rental scams, you first need to know how to recognize them. Here are some of the biggest red flags to watch out for.

The Listing Is “Too Good to Be True”

You may have a checklist of must-have and nice-to-have features that you’re looking for in a rental. If you find a listing that seems to have it all, including lower than expected rent and deposit requirements, that could hint at a scam, especially in today’s tight rental market.

Here’s a simple way to evaluate a seemingly perfect property: Compare it to similar rentals in the same market. Rental listings for a specific area often have similarities in terms of their size, features, and price. You might think you’ve hit the jackpot if you find the one outlier that surpasses the competition in every way but you may be walking into a scam.

Recommended: Cost of Living by State

Communication and Pressure Tactics

Scammers may want to close a deal with you quickly so that you don’t have a chance to spot their rental fraud. That’s where high-pressure tactics come in.

For example, the person posing as a landlord or rental agent may bombard you with calls, emails, or texts telling you that you need to jump on the property before they hand it over to someone else. Or, they may offer you a special “discount” to motivate you to hand over a deposit and first month’s rent.

If a rental situation makes you feel uncomfortable, don’t be afraid to walk away. You could be saving yourself the headache of cleaning up the mess from a scam.

Suspicious Payment Requests

Typically when you rent a place, the property owner or rental manager will ask you to pay by check, credit card, or debit card. Scammers, however, may ask for more unusual forms of payment, including:

They may also pressure you into paying upfront before you sign a lease or even see the property. Or scammers may tell you there are added fees you’ll need to pay on top of your deposit.

Lack of a Proper Screening Process

Legitimate rental agreements usually require some prescreening before you can be approved. For example, you may need to undergo a credit check or a criminal background check. You might also need to provide references from previous landlords or people you know professionally.

Lack of screening is often a giveaway that a rental opportunity is a scam. Any reputable property owner or rental agent will want to know a little bit about the person they plan to rent to.

Recommended: How Much Money Should I Spend on Rent?

Proactive Steps to Avoid Getting Scammed

Knowing how to avoid rental scams is a good thing if you don’t plan to buy a property any time soon. Here’s how to check if a rental property is legit as you look for a place to call home.

Do Your Homework: Verify Everything

A little due diligence can go a long way in avoiding rental scams. Before you hand over money or sign a lease, take time to confirm that everything is as it should be.

Asking questions can help you root out a potential scam. If the person you plan to rent from is hesitant to answer your questions, ignores them, or gets angry with you, that could signal that you’re dealing with a scammer.

The In-Person or Live Video Tour

Seeing a rental in person can clue you in to a scam if the property doesn’t match the photos or description listed online. It’s also a chance to decide if the place fits your needs, and get a feel for the neighborhood.

Ask for a live video tour if a property owner or rental agent is reluctant to let you visit or your schedule doesn’t allow you time to visit. If that request is also turned down, then you may be dealing with a scammer.

Research the Landlord and Property Ownership

If you’re worried about imposter scams, do your research on the property and its owner or owners. For instance, you should know whether you’re dealing with an individual owner, or a rental property company. Here are some other tips for researching ownership.

If people in the neighborhood seem willing to chat, ask them what they know about the property and its owner(s). People who live in the area may be the best source of information about what a rental is like and whether it’s legitimate.

The Lease Agreement and Secure Payments

At this stage, you may be ready to sign a lease and pay your deposit if everything else checks out. Before you do, take care of these steps.

Be prepared to walk away from any rental situation that doesn’t feel right.

What to Do If You Suspect or Become a Victim of a Rental Scam

You can do all the right things and still run into a rental scam; sometimes, scammers are just that good. If you think you’ve been scammed or suspect that a scam is afoot, here’s what you can do next.

Immediate Actions to Take

Protecting yourself quickly matters if you believe you’re a victim of rental fraud. Here are some important first steps to take.

The goal is to try to minimize the damage as much as possible. If you gave the scammer your Social Security number, you may also want to freeze your credit reports. Freezing your credit prevents anyone from opening new loans or credit cards in your name.^[6]

Reporting the Scam

Reporting rental scams can protect you financially and potentially help others avoid becoming victims. You can report rental fraud or gain important information from these agencies:

Document each report you make. If there’s any chance of a scammer using your personal information to commit additional fraud, your evidence can help you to defend yourself against collection claims or lawsuits related to identity theft.

Monitor Your Accounts

It’s always a good idea to track your financial accounts for suspicious activity but especially so if you’ve encountered a rental scammer. You can set up alerts for your checking accounts, savings accounts, and credit cards to notify you of new transactions, including purchases, transfers, or withdrawals.

You could also take the additional step of closing your existing bank accounts and opening new ones. You financial institution can likely help you achieve a secure banking experience if you’re in the challenging situation of enduring a rental scam.

The Takeaway

In today’s often highly competitive rental market, scammers may try to take advantage of people with fake listings, impersonation of landlords, and other fraudulent activities. It’s important to protect yourself by being aware of these ploys and proceeding carefully to verify listings and lease opportunities and use secure payment methods when drawing upon your checking account.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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FAQ

What is the single biggest red flag for a rental scam?

If a rental listing seems too good to be true, that’s often an indication that you’re dealing with a scam. If a property seems unbelievably affordable, that’s often a clue that it’s not legit. Another common sign of a scam is being subjected to high-pressure sales tactics, such as signing a lease and sending payment ASAP, before you’ve done your due diligence.

Are listings on major sites like Zillow or Apartments.com automatically safe?

While major rental listing sites typically have state-of-the-art security features, there are indeed plenty of scammers out there trying to post fake listings, hoping to trick people into paying deposits or other fees. For this reason, it’s always wise to be alert to red flags and learn how to check if a rental property is legit.

Is it normal to pay a rental application fee?

Rental companies and property owners may collect a rental application fee to cover the cost of a credit check or background check. If you’re asked for a fee, get an explanation (preferably in writing) of what it’s for. Beware of fees that seem unusually large or that the rental agent demands you pay, especially via a person-to-person payment app.

What should I do if I live out of state and can’t see the apartment in person?

If you can’t get to a rental in person for a tour, you could ask for a live video tour of the property. Alternatively, you may ask someone you know and trust who lives in the area to visit the property on your behalf. You’ll need to get the property owner or rental agent’s consent for that first.

How can I quickly verify the person I’m talking to is the real owner?

The best way to quickly verify someone’s identity is to meet them in person to discuss a rental property and ask for a government-issued photo ID. Take down their information then compare that to property tax records which can be found online for the property in question.

Article Sources

1. Federal Trade Commission (FTC). Protect yourself (and your money) from scammers this Financial Literacy Month.
2. Federal Trade Commission (FTC). Rental Listing Scams.
3. Cornell Law School. Bait and switch.
4. Office of Inspector General. OIG Fraud Bulletin.
5. Federal Trade Commission (FTC). If You Were Scammed.
6. Consumer Financial Protection Bureau. What does it mean to put a security freeze on my credit report?.

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About the author

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Millennials and Gen Z have faced some financial hurdles as they’ve entered adulthood, but many are saving for retirement nonetheless — and recognize the importance of doing so. In addition, time is on the side of these younger adults, when it comes to reaching their retirement goals.

That said, retirement planning for these younger adults has been hampered by significant challenges, including employment shifts relating to the pandemic, historically high student debt, the rise of the gig economy, concerns about Social Security, and the prospect of living longer lives. Fortunately, there are a number of strategies Gen Z and Millennials can employ now to make the most of the years ahead, so they can retire with peace of mind.

Who Are Millennials and Gen Z?

Millennials, also known as Gen Y, are the largest generation since the Baby Boomers, and number about 80 million. This cohort was born between 1981 and 1996, and are now between the ages of 29 and 44.

Gen Z refers to those born from about 1997 to 2012; they are roughly between ages 13 and 28. While Gen Z is smaller — about 71 million — they are the first generation to be raised as digital and social media natives. As such they’ve exerted a notable influence on businesses and brands worldwide.

What Might Retirement Look Like for Younger Adults?

When it comes to saving for retirement at different ages, Millennials and Gen Z have faced various financial challenges as they’ve started college and entered their prime working years. Many came of age during a period of escalating student loan debt, greater job uncertainty, concerns about Social Security’s solvency, and more.

When it comes to Millennials and retirement in particular, this group has seen a steeper cost of living since 2020^[1], which has prevented many from taking steps toward marriage and home ownership.

Nonetheless, a 2024 study by the Transamerica Center for Retirement studies has found that 71% of Gen Z and 84% of Millennials are saving for retirement in a company-sponsored plan or an outside account^[2] such as a traditional IRA.

But over half of respondents in each group also admitted they don’t have enough income to save for a secure retirement, and the amount of debt they carry is interfering with their ability to save.

Luckily, most members of the Millennial and Gen Z generations have years to adopt new habits and strategies in order to secure the future.

5 Retirement Challenges Millennials and Gen Z Face

In order to take the reins of their retirement, younger adults would do well to understand how various economic and world events have impacted their financial lives thus far.

1. Student Loan Debt

Student debt continues to be a burden for many. Thanks to higher interest rates and the rising cost of higher education, tens of millions of Millennials and Gen Z have accrued steep student loan debts.

When looking at student loan debt by generation, Millennials represent nearly 40% of all student loan borrowers, and some 18.5 million have outstanding balances. The average amount they owed as of 2024 was $40,438.^[3]

Gen Z represents the second-largest group of borrowers, at 28.2%. Of these, 13.1 million have outstanding debt. Members of Gen Z have the lowest balance on average: about $23,000 as of 2024. But with millions of this cohort still in college, their loan balances are growing faster than any other group: 6.72% compounded annually.^[3]

For many younger adults, planning for a secure future will require a debt-management strategy as well.

2. The Gig Economy

In addition to contending with student loan payments, Millennials and Gen Z have been impacted by a shift from traditional employment models to a more flexible, less structured gig economy. The growth of digital platforms in the last 15 years has accelerated this change, allowing companies to hire freelance workers for shorter-term services in companies like Uber, Fiverr, Postmates, TaskRabbit, Airbnb and many others.

The expansion of the gig economy, however, has made it harder for some younger adults to earn and save in retirement plans such as an employer-sponsored 401(k). More than 54% of Millennials have less than $10,000 saved for retirement, according to a 2023 survey by GoBankingRates.^[4]

That said, there are many retirement plan options for the self-employed, and gig workers can save as much or more in a SEP-IRA, for example, as in a 401(k).

3. Decline of Pensions and Rise of 401(k) Plans

The lack of retirement savings may be exacerbated by a broader trend in retirement planning in the last 25 years: the disappearance of pensions and the rise of worker-funded plans such as 401(k) and 403(b) plans.

In 2000, about 50% of private-sector workers had access to a pension plan^[5], a benefit that provides retirement income for life, and sometimes health benefits as well. In 2024, however, only 19% of private-sector employees had a pension. (Government workers generally still get a pension.)

Defined-contribution plans, like 401(k) plans, have largely replaced pensions for most workers today. While these employer-sponsored plans are typically tax deferred, and offer a potential tax break when you contribute to them, they don’t offer the security of lifetime pension income.

Again, this reality will impact Gen Z and Millennials’ retirement, and it adds to the necessity of planning ahead for a steady income.

4. Social Security Funding

In addition to the above, Millennials and Gen Z have been facing growing concerns about the viability of the Social Security system, and questions about whether future retirees will get their full benefits.

The Social Security system is funded by employer and employee contributions, which are withheld from workers’ paychecks. However, there are demographic changes that are partly impacting the solvency of Social Security. People are living longer, and these additional outflows have been putting a strain on the Social Security Trust Funds (the main pool of assets).^[6]

In addition, the government itself has borrowed from the Trust Funds by issuing debt securities to itself, which act as intergovernmental IOUs, in effect.

While many policymakers believe that Congress will support the changes necessary to fix the system (e.g., increasing payroll taxes or repaying the borrowed funds), these issues have yet to be resolved. And the message from the Social Security Administration to current workers is not fully reassuring: Benefits will exist, but as of 2035 they might be only 78% of what a worker would have gotten before.

Therefore, Millennials and Gen Z may be in the position of having to cover more of their retirement income with savings.

5. Longevity

The other big factor that will impact Gen Z and Millennials’ retirement is longevity. Thanks to advances in health care and technology, millions of people are already living longer, healthier lives.

In 2022, the number of Americans ages 65 and older was 58 million. By 2025, the number of people 65 and up is projected to reach 82 million by 2050, according to the Population Reference Bureau.

While no one can predict one’s actual lifespan, Millennials and Gen Z will have to factor in the need to save more, to cover potentially much longer lives. This is especially important for women, who live about five years longer than men on average. The average lifespan at birth is 74.8 years for men, 80.2 years for women, according to the Centers for Disease Control.

Another factor that Millennials and Gen Z may face in the coming years is the cost of caregiving for older loved ones. Some 37% of workers today are caring for, or have cared for a relative or friend (separate from parenting roles), according to the Transamerica study.

Taken as a whole, longevity factors are likely to have a bigger impact on these younger adults than on previous generations.

Tips to Help Build a Secure Retirement

Fortunately, Millennials and Gen Z represent the youngest adults — with many years ahead to work, save, and strategize about their retirement years. These tips will help.

Investing Strategies

When it comes to retirement planning, having a solid investment strategy can help by adding potential increases to one’s savings.

Obviously there are countless types of investments to consider. For those who are interested in active investing, learning about stock market basics is key.

Next, it’s important to think about how your asset allocation can change by age. The younger you are, the more time you have to take on risk — and potential growth — while still having enough runway to recover in the event of a downturn.

That said, DIY investing is not for everyone, and in that case younger investors have other options that are less hands-on.

Most target funds, sometimes called lifecycle funds, have names that include a date: e.g. ABC Retirement Fund 2045.

The fund’s portfolio starts out with a more aggressive asset allocation, or mix of assets, and adjusts over the years to become more conservative. By starting out with a more aggressive, equity-based allocation and gradually becoming focused on less risky investments over time, the fund’s portfolio may be able to deliver returns while minimizing risk.

While robo accounts are also designed to be hands-off, the mix of assets (a.k.a. the asset allocation) doesn’t adjust over time as it does with a target-date fund. That said, robo advisors can be cheaper because these portfolios are constructed with low-cost exchange-traded funds (ETFs).

Reducing Debt

The true challenge facing many younger adults today is that so many have the need to balance debt repayment with saving. While there are no easy answers when juggling competing financial priorities, the reality is that having a clear-cut debt repayment plan can only help support retirement savings.

Fortunately, there are a number of smart get-out-debt strategies to consider.

Maximizing Savings

Perhaps the most important step younger adults can take toward a secure retirement is saving money in an actual retirement plan. While it’s true that putting money in a savings account may seem simpler, these offer very little growth and no tax advantages.

By contrast, saving and investing with a traditional or Roth IRA account, or a workplace account like a 401(k) plan, can help your savings increase over time. And depending on the type of account you choose, you can reap tax benefits.

The rules governing IRAs are quite specific, so be sure to learn the terms. For example, the total you can contribute (deposit) in an IRA is $7,000 for tax year 2025, or $8,000 if you’re 50 and older.

Unlike IRA accounts, however, the annual limits for employer accounts are much higher. With a 401(k), you can save up to $23,500 per year for tax year 2025. People 50 and older can contribute an additional $7,500 in 2025. An additional “super catch-up” limit of $11,250 applies to individuals ages 60 to 63.

If your job offers a retirement account, this is often the best way to maximize your savings.

Again, all retirement accounts are subject to government and tax regulations, so it’s important to understand the terms when choosing a retirement account.

Alternative Retirement Options

When thinking about retirement, Millennials and Gen Z also have alternatives beyond simply retiring. Thanks to advances in medicine and technology, it may be possible to work longer (and save more).

Retirement itself could be reinvented, as people develop ways to be productive and enjoy life in the decades after traditional 21st-century “retirement age.”

In addition, there is a trend toward communal or shared living, with mixed ages, that could offer alternatives to long-term care and nursing home facilities.

One thing is certain, as Millennials and Gen Z think about their retirement, they will likely bring their own innovations, as generations have in the past.

The Takeaway

While Millennials and Gen Z have faced certain challenges when it comes to building up their retirement savings, they have some advantages as well. The majority of these younger adults are already saving in retirement accounts. And while some are concerned about how much they can save — time is on their side.

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FAQ

What age should Millennials and Gen Z start saving for retirement?

Anyone with earned income can start saving for retirement at any age using an IRA account. Otherwise, the general rule of thumb is: the sooner you start saving the better, because time tends to help money to increase.

How much will Millennials need to retire?

There are various formulas for deciding how much you need to retire. One target is to aim for 10 times your income by age 67, which is the current age when you can get your full benefits from Social Security.

Will Social Security be gone for Millennials?

That’s highly unlikely. Social Security has been in place for 90 years, and it will continue to exist for future generations. That said, the formulas used to calculate benefit amounts may change, and it’s possible that people will get a lower benefit amount, given current trends.

Article Sources

1. Federal Reserve Bank of St. Louis. Consumer Price Index for All Urban Consumers: All Items in U.S. City Average.
2. Transamerica Institute. The Multigenerational Workforce: Life, Work, & Retirement.
3. Education Data Initiative. Student Loan Debt by Generation.
4. Nasdaq. Most Millennials Have Less Than $100K in Retirement Savings: Should You Be Concerned?.
5. Economic Policy Institute. Retirement made riskier.
6. Social Security Administration. What young workers should know about Social Security and saving.

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Photo Credit: iStock/MDV Edwards

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