Fake Loan Approval Letter: How To Identify a Scammer?

Updated on: 15 Feb 2024

Offering a fake loan approval letter is a common tactic scammers use to entrap innocent people. Using a fake approval letter, lenders extend a lucrative and enticing loan offer, which can lead to huge financial loss if you accept it. Thankfully, identifying such attempts by fraudsters is not difficult if you know what signs to look out for.

Read on to learn the signs of a fake loan approval letter.

Missing Details in the Letter

An authentic pre-approval letter generally contains the following details:

Name of the lender
Lender’s contact information
Date of issuance
Name of the borrower
Pre-approved loan amount
Loan tenure
Equated monthly instalment (EMI amount)

If you find any of this information missing, then you may consider it as a scam attempt. However, if you compare an authentic and fake loan approval letter template, you’ll see that there isn’t a lot of difference, which makes you more vulnerable. So, you need to be very cautious before opening or accepting any offer.

Too Good to Be True Offers

Scammers may present a very attractive interest rate or large loan sum to solicit more clicks on the fake loan approval letter. They may also propose loans at lower than general interest rates to make you feel special.

However, banks decide interest rates based on the Reserve Bank of India guidelines. Banks do not have permission to provide loans lower than decided interest rates. So, make sure you don’t succumb to such offers and accept the letter or initiate further inquiry.

Upfront Fee

When applying for any loan, lenders charge a processing fee to cover the cost of administrative expenses. This amount is generally a percentage of the loan amount, but some banks may also charge a fixed nominal amount, which is disclosed on their website.

While lenders deduct this fee from the loan amount only before disbursal and not before, fraudsters may request it before disbursement. After accepting this payment, they may not disburse the loan amount, leading to a loss. So, don’t pay any upfront fee unless you are sure about the lender.

Discrepancy in Lender Information

Another indication of a fake loan approval letter is errors in the lender’s details. They include:

Mismatched company logo
Incorrect office address
Incorrect or invalid contact number
Missing or unofficial email address
Unreliable authorised signature

You can cross-check the information and contact the lender immediately to verify the legitimacy of the letter.

Also Read: Fake Loan App and How to Identify Them?

Errors in Details

Financial institutions offer pre-approved loan offers based on the information that they have, based on previous enquiries or communication. So, the chances of them having incorrect details are slim. If you find any error in the details, avoid further communication.

In addition to the above signs of a fake approval letter, here are some more warning signs of online loan scams that you should remember:

Guaranteed Approval Without a Credit Check: No financial institutions can guarantee 100% approval without assessing your credit score and other factors
Lack of Physical Address: Not mentioning any physical address makes it difficult to catch such fraudsters, so this must be the first thing you should look for when applying for loan online
Creating a False Sense of Urgency: Fake loans usually mention a limited-period offer; this provokes you into clicking without rationalising the offer
Unsecured Website: Always look for ‘https’ and a padlock sign in the lending platform URL, as it indicates that the page is secure and your data is safe
Out-of-the-blue Communication: Normally, financial institutions only contact you if you have already applied or enquired about a loan offer

Keeping these points in mind will help you detect a scammer instantly. If you want to apply with a secure lending platform, look no further than Fibe. Our Personal Loan App has a PCI DSS App-based journey, which allows you to get quick and secure credit.

Further, the ISO/IEC 27001 certification ensures that your data is not at risk. With Fibe, you can also enjoy pocket-friendly interest rates and quick disbursal on an Instant Personal Loan of up to ₹5 lakhs. So, download the app or visit our website to get started!

FAQs on Fake Loan Approval Letter

How do I report a fake loan?

To report online fraud to the cybercrime department, you can opt for the following option:

Report online at https://cybercrime.gov.in/
Call the cybercrime hotline number 1930
Call the area-specific number mentioned under ‘Contact Us’ on the official website