Looking for a loan provider? Now, you don’t have to stand in a queue to get your file approved. All you have to do is download an app on your device, fill in some basic information, and your loan gets sanctioned instantly, with the money credited to your account.
No wonder such apps have made life simpler but have also opened a gate for scammers to access your personal and financial data.
Most of the scammers create fake loan apps to steal your data and use it later to access your bank account.
With the increasing number of reported cases, it has become essential to be extra cautious. Here are some of the ways and tips of how to avoid loan scams.
Tips to Identify Red Flags of Loan Scams
An increasing number of cyber frauds depicts that scammers are almost everywhere and ready to grab on the opportunity to trap you by offering you schemes or benefits that are too good to be true.
No wonder many people get attracted to such schemes and end up losing their hard-earned money.
But even after using sophisticated and smarter ways, scammers also leave some hints. It only requires an eagle eye to identify and the power to read your instincts.
Here are the red flags that can easily help you in identifying such traps and in avoiding getting into it.
1. Offers Low Interest Rates
Loan interest depends upon the types of loan you apply for. On an average the interest rates for some of the common loans range in between 10% to 13%.
Now these fraudulent loan providers offer you loan at interest rate lower than the bank or any other NBFC registered firm.
People don’t realize that these apps are never intended to offer any kind of loan services. Infact, their only objective is to steal your data and financial information.
Not realizing the motive, most of the people get lured by seeing the low-interest rate loans and end up losing their hard-earned money.
2. Ask for Upfront Fees
Now, even if you apply for the loan from a bank, there is a minimal processing fee, which generally gets deducted after the loan gets credited to your account
However, loan apps generally charge hefty upfront fees to process the loan and may repeatedly demand payments under various pretexts like taxes, late fees, or processing charges.
Further, they do not provide proper proof and share random bank details to make payments.
In case you ever encounter any such things, stay away and delete the app right away.
3. Use Pressure Tactics
Irrespective of the type of scam, scammers generally use the same method of creating unnecessary urgency to force quick decisions. Such tactics are generally used so that you don’t get enough time to review things.
If you come across any such email or calls pushing you to complete the paperwork without giving you much time, then it is a red flag for you and time to be cautious.
4. Phishing Emails
The most common way by which scammers reach out to you is via emails with links that redirect you either to the fabricated website or to fake apps.
Once you land on the webpage, it asks you to add your details and upload documents like Aadhar or PAN. Sometimes, the link redirects you to a clone app that looks exactly like the genuine app of a renowned bank or financial institution.
In the name of offering you a loan, they ask for making payments for processing and display the loan amount in the app that never gets credited to your account.
You can stay away from it by identifying some of the common errors these scammers make while sending you emails like:
- Spelling mistakes
- Grammar mistakes
- Addresses you by a generic greeting
- Send emails using unofficial email domains like Gmail or Yahoo.
Be cautious of SMS messages with suspicious links as well.
5. No Branch or Physical Address
You generally come across loan apps on social media or some other platform and download them from the Play Store. Some fraudulent lenders may have websites, but if you carefully look into the contact details, they do not provide any valid contact number.
Often, they either lack a physical address or provide fake details.
To catch this, it is good to check contact details before applying for a loan and get the address verified. You can simply check the physical location by sending a general letter to that address.
If that remains undelivered, it gives you the biggest indication of the scam.
How to Complaint Against Online Loan App?
The primary thing is to be focused and alert while downloading any app related to financial services. However, unfortunately, if you missed some of the signs of the scam and lost your money, don’t sit quietly.
Act quickly by reporting a complaint against loan app scams.
Here are the steps you can take to file your complaint:
- If the loan app provider is registered with NBFC, report it by visiting the NBFC portal.
- You can also file a complaint by sending an email with all proof to RBI.
- Last but not least, file a cyber crime complaint to freeze the scammer bank account.
Conclusion
Loan scams are becoming increasingly sophisticated, targeting individuals with enticing offers that seem too good to be true.
While technology has made borrowing easier, it has also created new risks. By staying vigilant, verifying lender credentials, and recognizing red flags like upfront fees, unrealistic interest rates, and phishing attempts, you can safeguard yourself from financial fraud.
Always remember that a genuine lender will never pressure you, demand prepayments, or hide their identity.
When in doubt, do your research and trust only RBI-registered financial institutions. Stay informed, stay safe!
