Instant Loan App has changed the lending scenario by making financial information available quickly and easily in just a few clicks on your phone. However, as such apps become increasingly popular in the financial sector, so too do the scams associated with them.
1. Registered and authorized by RBI
The Reserve Bank of India (RBI) regulates all formal lending activities in India. Every instant loan app must be registered with the Reserve Bank of India. This step is crucial to ensure that such platforms adhere to the rules and regulations set by the central bank to protect borrowers from fraud. Getting approval from the Reserve Bank of India will mean that the app follows all guidelines issued for the benefit of borrowers. Genuine instant loan apps will be registered with the Reserve Bank of India as per all the norms issued by the Reserve Bank of India. The central bank may penalize lenders who do not adhere to these norms.
2. Data security
Every instant app you download requests specific data from your phone. Most genuine apps will mention the reason why they need to access each piece of information. Be wary of apps that ask for unnecessary information that may violate your data privacy.
3. Contact information
Be sure to check the contact information for the instant personal loan you plan to apply for. Also verify the application provider’s website and address. Genuine loan apps will maintain transparency by providing legitimate contact information and verifiable addresses. Fraudulent loan apps will lack real contact information and physical presence.
4. Online comments
Before downloading any instant loan app, check the app store reviews and ratings. Positive reviews and high-rated apps reflect its legitimacy, while negative reviews and low ratings indicate that the app is not genuine. This will help differentiate between genuine and fake loan apps. However, reviews and ratings may not be the best indicators of a loan app’s authenticity, as some reviews may also be fake.
5. Seek financial advisor
The best way to know if an instant loan app is genuine is to contact a financial advisor. These experts can help differentiate between scam and legitimate apps based on their knowledge and experience.
6. Terms and Conditions
It is crucial to read the terms and conditions to avoid falling for a loan scam. The terms and conditions of real instant loans are transparent. It will provide necessary details such as interest rates, fees, repayment details, etc.
If the terms and conditions are unclear about such details, it could be a potential scam. Legitimate loan apps also mention legal details, highlight necessary disclosures and mention the rights and obligations of lenders and borrowers. If these disclosures are missing or incomplete, please exercise caution.
There are few signs of fraudulent instant loan apps
Lack of KYC
Lenders use know-your-customer, or KYC, processes to verify the identities of their customers. This process is mandated by the Reserve Bank of India. If your loan app does seek KYC, it could be a scam.
loan agreement
If you want to take a loan, fraudulent instant loan apps provide loan agreements. A loan agreement is a formal contract between a lender and a borrower that provides legal protection in the event that either party breaches the terms.
Prepayment
Some instant loan apps may require an upfront payment to approve your loan. Such apps may be scams. There are no processing fees to be paid to get your loan approved.
In summary, while instant loan apps make it easier to borrow money, they also have the same chance of becoming potential scams. Be diligent and cautious before applying for a loan. Don’t be lured by unrealistic offers offered by some fraudulent apps. Try to seek out a professional to make an informed loan decision.