Tips to save yourself from fraudulent loan applications

In recent years, an upsurge in financial fraud involving illegal digital loan applications has been observed.

The modus operandi of these apps is to attract vulnerable customers by providing instant loans through a simple process and with minimal paperwork.

However, the interest rate for these loans is kept too high, making many unable to repay it. Once the borrower defaults on the loan, debt collectors often resort to harassment and blackmail, which has driven people to suicide in several cases.

Many digital loan apps illegally thrive on app stores by preying on desperate borrowers.

The Reserve Bank of India (RBI) has also taken cognizance of the matter and has planned to prepare a safe list of all legal online lending apps that will be allowed to operate.

However, it is always advisable to remain cautious so as not to fall prey to a fraudulent online financial platform.

Before using a loan application, consider the following points to avoid becoming a victim of financial fraud:

• It has been found that once you install these illegal apps, they ask for access to your personal data such as contact list, photo gallery and camera. So always avoid apps that you think can compromise the security and privacy of your personal data.
• If you doubt the authenticity of a loan application, always approach a reputable bank or finance company for a loan. The RBI maintains a list of all Non-Banking Financial Companies (NBFCs) from which you can safely apply for a loan.
• One should also avoid clicking on suspicious links attached in emails and messages that promise instant loans with lucrative offers.
• These links are often malicious and can infect your system with viruses or spyware which in turn steals personal information. The data can then be used by fraudsters to threaten or blackmail you.
• Never download any digital app from trusted sources such as Google Playstore or the App Store (for iPhones). Before downloading any financial app, always check the details and go through the reviews shared by users.