Borrowing money online can be convenient, but it also comes with risks.

More illegal lenders are moving online and targeting borrowers through websites, social media and messaging apps. You may come across offers of loans on social media platforms, such as Facebook, Reddit, Instagram or X, but beware, they might not be all they seem.

Here are five tips for staying safe if you are thinking about borrowing online:

Always verify a lender’s credentials. Call them, read customer reviews, and make sure they’re registered with the Financial Conduct Authority (FCA) via their Firm Checker.

Check they have a full address, contact details, and a secure website (look for the padlock in the address bar).

If it sounds too good to be true, it probably is. You may think you are borrowing from a friend, but that friendly approach can quickly turn into intimidation and even violence.

Be suspicious of anyone who contacts you out of the blue to offer you money – either via a ‘quick and easy’ loan or via an investment opportunity.

Legitimate lenders will never ask for money upfront and will always carry out credit checks before agreeing to issue a loan. They won’t rush or pressure you into making a quick decision.

Scammers may ask for an upfront payment as a deposit, administrative fee or insurance. They might claim this is necessary because you have a bad credit history.

They’ll often put pressure on you to pay the fee quickly via a bank transfer or by purchasing a voucher, for example from Google Play, Amazon or Ebay. Some scammers may ask for payments to be made via crypto exchanges.

Although they might say that the fee is refundable, once you’ve made the payments you won’t receive the loan – or a refund on the fee.

If you need to apply for a loan, check the information on the FCA’s website at www.fca.org.uk/consumers/fca-firm-checker. If the firm is not authorised, it is likely to be a scam.

A genuine lender will have the terms of the loan clearly laid out, including interest rate, repayments. If you’re given no paperwork, it could be a sign your lender is illegal.

Watch out for red flags

Spelling mistakes, strange grammar, or unusual email addresses can all be warning signs of a scam.

If you think you have experienced a scam, report it to Advice Direct Scotland via 0808 164 6000 or at www.advice.scot/contact-us/

If you’ve borrowed from someone you think may be a loan shark, we can offer free, confidential help and advice – get in touch today.