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Fake Loan Apps: What are they and how to identify them?
Reviewed by: Anil Sinha
- Updated on: 29 Jan 2024
- Published on: 8 Jan 2024
Reviewed by: Anil Sinha
There are umpteen fake loan apps which provide loans to users with wrong intentions. These apps design their services to trap borrowers by offering them high interest rates and deceitful descriptions.
Such cases of scams have risen recently due to an upward jump in digital lending. However, you can avoid falling into a trap set by these applications by taking certain precautions. Read more about these fake applications providing small personal loans, how to identify them, and how to prevent such scams.
There are two types of fraudulent lending applications. Those belonging to the first set of scammers extort loan fees by promising quick access to money. The second set is even worse. They levy high interest rates on loans and exceed the ceiling set by the RBI.
Here are some ways by which you can identify fake loan apps in India:
Remember, it is essential for loan apps to follow RBI guidelines in India. And if an app doesn’t follow them, it certainly is a red flag that the app may be a fake one.
This may also be an identifier of a fake lending app. Know that certain fraudulent lenders also create fake websites to scam borrowers.
Fake loan apps generally don’t provide loan agreements to hide necessary information. To assess borrowing costs, it is crucial to know about interest rates and charges.
A genuine lender never requires you to pay the processing fee for a loan in advance. Instead, you’ll have to pay these charges only after your loan application has been approved. Avoid any transaction with a lender requesting you to pay the processing fee or other charges in advance.
Also Read: Alert! Personal Loan Scams
As per the RBI mandate, it is mandatory for lenders to collect your personal information when providing a loan. It may be a red signal if a lender doesn’t require you to submit any documentation.
You may find a majority of negative reviews for fraudulent lending applications online. Hence, check for the reviews of a lender before applying for an instant loan.
You must take these steps to prevent falling into a trap set by fake loan companies in India:
Before applying for a loan, check if the lender’s name features in the list of lenders approved by the RBI. Once you check this, you can rest assured that you aren’t falling into any trap. Check this list on the official website of the central bank.
To validate a lender’s authenticity, you can check if their website is secured or not. A secured website generally has ‘https’ added at the beginning of the URL.
If the lender doesn’t provide you with an agreement, demand one before availing of a loan. So, read all the terms and conditions carefully before you plan to take a loan.
Before applying for a loan, check the charges associated with a loan facility. Note that some loans also carry hidden charges.
As per the RBI guidelines, a lender cannot store a borrower’s information beyond their personal details. Check if the application asks for access to data that it may misuse in the future.
Also Read: How Safe are Loan Apps?
Here is a fake loan app list in India removed by Google from its platforms in December 2023:
Falling for the trap set by fake loan apps can dwindle your finances and push you into a debt cycle. You can get genuine Personal Loans of up to ₹5 lakhs from Fibe, which is an RBI-registered lender. Download the Fibe Personal Loan App to get a loan with quick sanction and minimal paperwork.
Reserve Bank of India has approved many loan applications. Fibe is one such lender that provides quick personal loans on the principles of ethical lending.
You can find fake loan apps by following certain strategies. Most importantly, check if the application is registered with RBI.
Yes, Fibe is a genuine loan application registered with the Reserve Bank of India. We follow the ethical lending guidelines laid down by the central bank.
