Loan Apps in India: How to Identify the Fraudsters and Stay Safe

 

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The trend of loan apps has been on the rise in India for the past couple of years. These apps are user-friendly and allow people to apply for credit whenever and wherever they want. However, there has been an increase in the number of fraudulent loan apps targeting naive customers and taking their hard earned money. You need to be able to identify what is a legitimate service and what is a fraudulent service in order to safeguard yourself.

 

Why Are Fake Loan Apps a Cause for Concern

 

To entice someone, fake loan apps target them by providing effortless loan opportunities with little to no paperwork. Although these apps may seem authentic in functionality, their ulterior motive is to scam the users. They make people anti-social or malicious contracts with very weak terms, or charge European rates over the amount of the loan on numerous loans, misrepresenting their KYC and using many loans as bait.

 

The Indian government is trying to avoid the increasing popularity of these loan apps. Even the RBI has stepped in and pointed out the need for the public to be aware and to take constructive steps against these crooks. Here it would be, knowing and taking the conscious decision to investigate further steps to minimize risk.

How to Spot Look Alike Fraud Loan Apps

However, when it comes to loan apps, there are some serious warning exemplars that individuals and in particular borrowers should look out for –    

  1. No License: All loan apps must be run by registered members of at least lending banks or non-banking financial institutions certified by the RBI. Always verify the legitimacy of the app before proceeding.
  2. Exaggerated Conditions: A great portion of dishonest apps do not conceal the key details, that is, the fee required for using their app, length of time the loan is to be paid back, and when their interest will be repaid, among others.
  3. Uncontrollable Authorizations: Applications asking you for permission regarding your contacts, images, and unrelated information should raise an alarm.
  4. Worst App Ratings: Do not turn a blind eye towards app ratings and comments on the application stores as they will tell you a lot about the application.

Why Select RBI Approved Loan Applications For Your Finance

Advising oneself through expert guidance becomes a necessity to overcome the issue of fake loan applications. In India, rightly followed and RBI sanctioned loan apps help one remain on the inside without getting outside the constructed framework which does not endanger the users. Such apps have a perfect environment which allows the users to take loans without being overcharged or having their trust and personal details abused.

RBI approved loan applications include those operated by established banks and registered non banking financial companies (NBFCs). They are safe, have competitive interest rates, and have enough measures to deal with complaints.

Loan Apps Best Practices

The following are some recommendations that you should consider before submitting a loan request through an app:

  1. Do Your Homework: Do assessments regarding the application and the tied banks and which nefarious NBFCs are involved before downloading the loan app.
  2. Know Their Policies: Focus on issues like how much interest will be charged, the duration of the loan and repayment for what purpose of a loan is it intended.
  3. Avoid Providing Unrelated Details: Loan applications which are irrelevant such as basic ones should be avoided to protect yourself.
  4. Stay Alert For Scams: The websites of banks and other financial organizations, including the Reserve Bank of India, regularly update lists of apps that appear to be fraudulent. Go through those lists so that you don’t lose money in the form of a loan scam.
  5. Secure Platforms For Loan App Downloads: Loan apps should be downloaded on platforms like Google Play and Apple’s App Store while avoiding third-party sites.

Is Being Financially Educated Necessary Among Indian People?

It is true that there is a lot left for regulatory authorities as well as the government in bringing down fraud, but education among users and possible targets of cybercrime is also important. Education of users about the function of loans, the effects of getting a loan, or which loan apps are real, their number will increase.

Wrapping Up

The launch of loan apps has revolutionized the way lending works, especially with ease of use. Nevertheless, there are real threats of fake loan apps and so it is advisable to be careful. As an example, Indian users can protect themselves against scammers by using authorized loan apps in India and knowing the list of alerts. Bottom line, using caution, knowledge, and relative degree of faith in trusted sites while making loan deals is key to safe borrowing.