You're looking to secure a substantial loan and you're not sure the best way to do it. You are surfing around online and you see an ad promising a guaranteed loan if you use their business. You call the company and an agent on the other side of the line gives you a full description of the loan.

You tell him you're looking for $9,000 and he says that won't be a problem. A few days later, you get a package from the company to confirm the deal. It has a fancy letterhead and everything, so it has to be legit.

You go through the process of crossing the "t"s and dotting the "i"s and send it back to them, along with a $500 fee to secure the loan. They tell you the money will be in your account within the next two business days. When the money doesn't come in, you make another call to the company to check on the status--nobody answers, or if they do, it'll be someone who has no idea what you're talking about.

Or, they might tell you there was an issue with the application and more money is needed or they offer you a Premium Insurance Policy, worth around $1,000. They now tell you that you need the policy to guarantee the loan. Basically, you are being asked to keep pumping money into something you shouldn't have sent a dime to in the first place.

How to avoid: go to the bank for loan applications. You may see some tempting offers, but those that seem too good to be true usually are. There are some more trustworthy sites where you can apply online, but be very wary of any place you haven't heard of.