Personal loans are a popular choice for people looking for quick cash to cover their expenses temporarily. Personal loans have become more accessible than ever as digital lending has risen.
However, it has also created an opportunity for fraudsters to prey upon people in need of money in a hurry. The number of fake personal loan scams is rising and these scammers are using deceptive means to steal personal information or money.
6 most common red flags to watch out
1. Lender’s legitimacy
Before applying for a loan, make sure the lender has been registered with the Reserve Bank of India (RBI). Fake websites or social pages can also be created by the scammers that appear similar to legitimate lenders. Visit the official website, read customer reviews and get contact details. If a lender is not present in official financial regulatory platforms, that’s a red flag.
2. Upfront fees
Fraudulent lenders also ask for processing fees, insurance or verification charges before approving a loan. Such charges are deducted from the disbursed amount by genuine financial institutions and not by asking for an upfront payment. If a lender implies or requires an advance fee, it may be a scam.
3. Unrealistic loan offers
If a lender advertises instant approval, no eligibility checks, or absurdly low interest rates. Strict criteria are set by legitimate lenders as they check your credit score, your income and document your identity. If there is any loan offer that sounds “too good to be true”, it is highly likely to be a trap.
4. No physical address or customer support
You should always verify if the lender has a physical office address and reachable customer support. Fraudsters prefer to operate only through WhatsApp, emails or social media, keeping away from physical contact. If customer service isn’t available or the office location isn’t verifiable, this should be a red flag.
5. Pressuring you to act quickly
Scammers use high pressure tactics such as urging victims to act immediately to get the loan. They may also say the offer is limited time only or that the time is running out. Lenders who are genuine give the applicants time to read the terms, go through different options and finally send the proper documents.
6. Requests for sensitive information
Without proper verification, scam lenders may ask for bank account details, PAN, Aadhaar, OTPs etc. There are many ways to get financial fraud, identity theft or unauthorised transactions by sharing such details with them. The data protection security is always followed by genuine lenders.
In conclusion, you must note that lenders will never ask for any kind of sensitive information through any medium from you under any circumstances. You must also avoid using a public network for any banking purposes.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
