What is an air loan?

An air loan refers specifically to a loan that is advanced on property that does not actually exist. This type of fraudulent activity involves creating a false or fictitious property to secure financing, enabling the borrower to obtain funds under the pretense of owning a legitimate asset. In these cases, the lender is misled into believing they are providing a loan for a tangible property, while in reality, no such property is present.

The concept of an air loan underscores the importance of rigorous due diligence when assessing loan applications and property valuations. Proper verification processes can prevent these types of loans from being issued, as legitimate transactions rely on the existence and value of the real estate.

Other types of loans mentioned in alternative choices do exist, such as loans that are backed by real property or unsecured loans, but they do not capture the essence of what an air loan represents. The distinctive feature of an air loan is the involvement of non-existent property, which sets it apart from other types of lending scenarios.