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I received an unexpected preapproved offer, or live check loan, in the mail. What happens if I cash or deposit it?

A live check is actually an unsolicited loan offer. It is usually sent in the mail, and if you cash or deposit the check you are bound by its loan terms, which may include high interest rates for multiple years. Before cashing or depositing a live check, you should make sure you understand the terms, and shop around for other loan options to see if you can find a better rate.

Have you ever opened your mail and found an unexpected check? Some checks are refunds and payments due to you, others are sample advertisements, some are fake check scams , and some checks are preapproved loans, or live check loan offers.

View a sample live check loan mailing.

What is a live check loan?

A live check is a preapproved or “prescreened” loan offer that you did not apply for. It may be from a lender you have borrowed from in the past or from a new lender. The loan amounts usually range from several hundred to several thousand dollars. The check should come with the following information:

  • A disclosure of the loan fees
  • The annual percentage rate (APR)—which is the cost of the loan on a yearly basis
  • The payment schedule
  • The loan agreement
  • A privacy notice about the sharing of your personal information
  • Your right to exclude your name from future offers—called an opt-out notice
  • Contact information for the sender

Live check loans may have higher interest rates than other types of personal loans or credit cards, so it’s a good idea to shop around and compare terms before accepting a live loan check. If the live check does not come with this information for you to review, then do not cash the check. Cashing the check will be treated as your acceptance of the offered loan terms. Also, it could be a scam.

Is this preapproved loan offer a scam?

Scammers sometimes send fake loan offers via mail, email, or text. These may look very similar to actual live check loan offers, but they are used to get your personal or financial information to commit identity theft or fraud. Learn more about check scams from the FTC .

Should I accept a live check loan?

Live check loans may arrive when you are in need of extra cash and may seem like an easy way to address it. However, live check loans often have much higher interest rates than other loans or credit cards. If you are interested in a loan or line of credit, you should shop around for information about the benefits and costs of all options. It’s also a good idea to research the live check lender to make sure they’re legitimate and not a scammer. Keep in mind that the best way to maintain a strong credit score and not waste money on interest and fees is to create a budget and save for what you need instead of using credit or a loan.

How does a live check work?

If you endorse the check by signing the back of the check and cash or deposit the funds into your bank account, you have accepted the live check loan. It is a loan that you must repay on the due dates described in the loan agreement. If you pay late or do not pay, you may be charged fees along with interest, and the lender may report your debt to a credit reporting agency which could affect your credit score. To reject the loan offer, you should securely destroy—by shredding and throwing away—the live check to avoid potential fraudulent use by others.

How to stop unsolicited loan offers

Lenders offer live check loans based on information about your credit history from your credit report. If you do not want to receive live checks or other unsolicited loan offers, you have the right under the Fair Credit Reporting Act to opt out of future offers like this for five years or permanently. To opt out for five years, call 1-888-5-OPTOUT (1-888-567-8688) or visit OptOutPrescreen . To opt out permanently, visit OptOutPreScreen and return a signed “Permanent Opt-Out Election form,” which they will send after you make the request. Learn more about opting out of unsolicited loan offers .