Updated on: 7 September 2023
Published on: 17 September 2021
Highlight: As more personal loans are being borrowed, personal loan scams have also increased. Here’s how to keep yourself safe from it.
Online loan scams have become an increasingly common news headline today, but are there chances of it happening to you? Let’s set the context before we explore this question. With the advancement in the fintech sector in the recent past, availing of a personal loan has become as easy as online shopping. In today’s time, a person can even avail of a personal loan online, sitting comfortably at home with next to no formalities or paperwork through platforms like Fibe.
This option seemed godsent, especially when the entire world was battling the COVID-19 pandemic. On the one hand, the income sources of many individuals dwindled, as there were several salary cuts and even layoffs.
On the other hand, several contingent expenses, such as the ones related to health issues or even for facilitating work from home, kept cropping up. It was difficult to go to a bank physically and apply for a loan.
While the easy availability of personal loans has been quite the saviour for many, you still need to be vigilant. As the number of personal loans being disbursed has considerably increased, so have the instances of online loan scams.
In fact, within the past year (up till March 2021), as many as 45,613 cases of loan fraud were reported, which amounts to roughly ₹4.92 trillion, revealed RBI as a response to a recent RTI application.
With new NBFCs and digital lenders in the market offering personal loans at just a click, it becomes difficult to know whether these websites and apps are genuine. The first and the most easily identifiable red flag is if the lender website does not have an ‘s’ after the ‘HTTP’, which means that the website may not be secure for online transactions.
Such websites may misuse your personal information, which possibly can be the genesis of an online loan scam.
While it is pretty standard for lenders to charge a processing fee for a personal loan, most lenders either deduct it from the loan amount or adjust it within the repayment. If the lender is asking you to deposit any money upfront pre-approval or post-approval – before the disbursement of the loan – be wary. This may mean that your funds may be misappropriated or that you may be caught up in a loan app fraud.
Also Read: Personal loan hidden charges
Getting a loan is not like buying a gadget online. There cannot be ‘flash sales’ or ‘limited period offers’. Loans are directly linked to your credit history and if your lender is pushing you to make an urgent call on your loan, the chances are that they may be pushing you to make a rash decision.
Do not fall for such antics and make sure to do your due diligence before zeroing in on a personal loan to avoid getting trapped in a scam.
Any legitimate lender has standardized eligibility criteria and set terms and conditions attached to the loan. After all, this constitutes a binding contract between the borrower and lender and protects their future interests as it does yours.
If the terms of the personal loan being offered to you are vague or are too good to be true, the chances are that there may be some hidden agenda or an online loan scam in the making.
If you think you’ve fallen prey to potential loan fraud, here’s what you must do:
Keep in mind that in case of any unauthorized transaction, you can contact your bank and report the matter. As per RBI regulations, the bank will cover the lost amount if you report the unauthorized transaction immediately and no fault of yours is found.
While online personal loan scams are getting too common these days, with a little caution and alertness, you can avoid them altogether. Just make sure to keep in mind the above-mentioned red flags and make a wise choice.
It is always good to go with a reputed name like Fibe when you are choosing your lender. Fibe is one of the most preferred online lenders out there. So, get started now and download our Instant Loan App or register on our website for hassle-free financing.
You can avoid loan scams by applying for loans from RBI-registered financial companies or institutions. It is also crucial to check the institution’s registered address on its official website.
Here are some of the signs that you may be getting scammed by a personal loan company:
Loan scams work in multiple ways:
A loan scam is any experience that offers credit under false promises meant to swindle you out of money or personal data. This may refer to unspecified fees being charged, fake websites that steal your financial data, or other forms of harassment to repay money you may have already paid.
This refers to any fraudulent activity or scam that results in loss of money and peace of mind. While such scammers often target those who are new to credit or do not qualify for regular loans, they are becoming more common and can happen to anyone.
Yes, loan app fraud-related activities are illegal and criminal offences. You can report any such incidents to a cybercrime police station close to your area of residence.
To report fraud related to personal loans, file a complaint at your local cybercrime police cell and inform your bank, so any payments can be stopped or put on hold at the earliest. Support your complaint with any screenshots, call recordings, or transactions to give complete information.
Yes, someone else can avail of a loan by fraudulently using your PAN details. Such fraudulent loans will also reflect in your credit history and thus, it is essential to check your credit report regularly.
You can check if a loan company is legitimate through the RBI website. A bank or NBFC will be genuine if it is registered with the RBI.
The Fibe app is entirely real, as it is registered with the RBI.
Sometimes banks will refund money to you if you report the fraud immediately and there is no fault of yours.
Each loan gets reflected in your credit report. So, you can check your CIBIL report to find out if someone else has taken a loan in your name.
Category : Personal Loan
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