Loan scams target people at their most stressed β when they urgently need money. The pattern is almost always the same: an easy "approval", followed by a request to pay something before the money is released. This guide explains how these scams work, the warning signs, and what to do if you've been caught.
How a typical loan scam works
- 1. The bait β an ad on Facebook, TikTok or a WhatsApp message promising fast approval, low rates and "no CTOS check".
- 2. Instant "approval" β after you send your MyKad and details, you're told the loan is approved almost immediately.
- 3. The fee β before release, you're asked to pay a "processing fee", "stamp duty", "insurance" or a deposit to "prove you can repay".
- 4. More fees β once you pay, a new problem appears ("wrong account number", "system freeze") requiring another payment.
- 5. Gone β the loan never arrives and the contact disappears. Your personal details may also be misused.
7 warning signs of a loan scam
- Pay before you receive. Any request for money before the loan is disbursed. This is the biggest red flag.
- Payment to a personal account. Fees requested into an individual's bank account or e-wallet.
- Guaranteed approval. "No documents, no checks, 100% approved."
- WhatsApp-only contact. No company name, office address or landline you can verify.
- Pressure and urgency. "Offer expires today" or "pay in 30 minutes".
- Asking for your banking credentials. Online banking login, TAC/OTP, ATM card or PIN.
- No proper agreement. No written loan agreement showing the interest rate and total repayable.
How to check before you borrow
- Verify the lender's licence through KPKT's i-KrediKom app or portal (for Peninsular Malaysia). For Sabah, Sarawak and the Federal Territory of Labuan, check with the relevant licensing authority.
- Make sure the company name on the agreement matches the licensed company.
- Check that the interest rate is within the legal limit β 12% p.a. secured, 18% p.a. unsecured.
- Never share your banking password, TAC/OTP or PIN with anyone.
More on this in our guide to licensed money lenders vs loan sharks.
What to do if you've been scammed
- Call the National Scam Response Centre (NSRC) at 997 as soon as possible β acting quickly gives the best chance of freezing the money.
- Contact your bank immediately to report the transaction.
- Make a police report and keep all screenshots, receipts and phone numbers.
- You can check suspicious phone numbers and bank accounts through PDRM's Semak Mule portal.
- Complaints about moneylenders can be lodged with KPKT.
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Apply NowFrequently asked questions
Is it normal to pay a fee before a loan is approved in Malaysia?
No. A legitimate licensed money lender will not ask you to pay any fee, deposit or insurance before the loan is disbursed. A request like this is the most common sign of a loan scam.
How can I check if a money lender is licensed?
For Peninsular Malaysia you can check through KPKT's i-KrediKom app or portal. For Sabah, Sarawak and Labuan, contact the relevant licensing authority.
Where do I report a loan scam in Malaysia?
Call the National Scam Response Centre at 997 as soon as possible, inform your bank, and make a police report. Complaints about moneylenders can also be made to KPKT.