Illegal Loan Apps: How to identify and protect against fake lending platforms?
The government has taken several measures to tackle the rising scams by illegal loan apps. Always download the apps of trusted banks and NBFCs to avoid such loan scams.
In recent times, there has been a significant rise in fraud cases committed through illegal loan apps and digital lending platforms. Illegal entities have been operating fake apps, attracting loan seekers with lucrative offers. Such fraud cases have surged recently due to an exponential rise in customers availing digital loans.
In the wake of unforeseen job losses, depreciating finances, and mounting medical expenses, a lot of Indians have started downloading instant loan apps to meet financial needs. However, the government has now started making plans to crack down on such illegal loan apps. The RBI has also issued several guidelines to regulate digital lending platforms.
While the government is doing its part to address the issue, borrowers also need to remain vigilant of such fake loan apps and refrain from downloading or using them.
How to identify a fraud loan app?
Online phishing: At a time when several digital lenders and Non-Banking Financial Companies (NBFCs) have made accessing personal loans easier with just a click, it can often become difficult for individuals to distinguish between genuine and fake loan apps. In such a case, one should watch out if the lender's website begins with ‘https’. If it begins with only ‘http’, as in the case of many websites, then it can mean that the website is not secure.
Loan fees or changes: Some fraud loan apps or applications also seek processing fees or charges, promising that the amount will be deducted from the loan amount or the repayment amount. However, you should be wary if the lender is seeking borrowers to deposit any money upfront pre-approval or post-approval toward any such fees.
Avoid lucrative offers: Falling into the trap of lucrative offers can often make borrowers make a quick and impulsive decision while taking an urgent call on a loan. One should remain mindful of such antics before zeroing in on a personal loan to avoid falling prey to a scam.
Terms and conditions: While applying for a loan, one should check the provided terms and conditions in detail as genuine lenders usually offer a standardised set of terms and conditions. However, loan apps giving 'too good to be true' terms can often have some hidden agenda or a trap.
App permissions: Illegal lending apps tend to collect data from the mobile phones of the applicant by seeking permission from the user to misuse it later. However, these permissions allow lenders to gain access to borrower's personal data like contact numbers, images and messages. Therefore, as a prudent practice, one should check the details while allowing permissions.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
Top 7 Large and Mid Cap Mutual Funds with Best SIP Returns in 5 Years: No. 1 fund has turned Rs 15,000 monthly SIP investment into Rs 20,54,384; know about others
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
04:56 PM IST