An instant loan app offers utmost convenience when applying for a Personal Loan, as it allows you to complete a loan application with just a few taps on your smartphone. Most of them are quick solutions to all financial problems, but not all apps are safe to use. Some may work as a gateway to identity theft and financial scams. Therefore, verifying the app’s authenticity and security is essential before taking out an instant loan.
Here are the eight most essential safety tips to avoid loan app scams.
1. Ensure the App has a Website and Physical Address
Make sure to check the authenticity of a loan app before using it to ensure it keeps your personal and financial details safe. A key aspect to consider is the loan company’s office address. Take it as a red flag if you cannot find the lender’s registered office or web address. A legitimate loan app owner typically has their name, office address, web address, email ID, and phone number listed for transparency. In addition, look for the app’s parent company and ensure it has a link to a credible website. A loan app without a website may be a scam.
2. Check the App’s Online Reviews and Ratings
Before applying for a loan, check the app’s reviews and ratings online. They give an idea of the lender’s service quality, credibility, and customer service. Go to app stores and read the users’ experiences and reviews. You can read past borrowers’ real-life experiences on these platforms. You can check the ratings of users to make a borrowing decision. Paying attention to the reviews can help identify any history of fraud or unethical practices.
3. Check the Lender’s Access To Your Personal Details
When you apply online for a Personal Loan, the app may request access to your gallery and contacts for authentication and underwriting. A loan app keeps this information safe and confidential without sharing it with third parties. However, apps involved in scams may not adhere to such regulations.
4. Beware of Red Flags
Be wary of loan plans that seem too good to be true, such as claims like guaranteed approvals or unbelievably low interest rates. Scam apps use these perks to lure borrowers. Ensure the app you use has specific eligibility criteria and approves loans only after proper documentation and verification.
5. Review Loan Terms and Conditions
Carefully read the loan terms and conditions before accepting them when borrowing. Pay attention to the hidden charges, repayment terms, and applicable penalties to analyse the loan cost and borrow adequately. Only sign a loan agreement after understanding every aspect. Missing or vague terms are major red flags.
6. Borrow Responsibly
Before applying for a personal loan, assess your financial needs and only borrow the amount you can conveniently repay. Sometimes, you may qualify for a bigger loan amount according to your credit history and repayment capacity. Avoid over-borrowing to control the financial burden and reduce the loan cost. Once you decide upon an adequate loan amount, create a realistic budget and stick to it to avoid falling into a debt trap.
7. Take Proactive Measures
Research and compare the available options based on their terms, features, and reviews to make an informed decision. Consider an instant loan app owned by NBFCs or financial institutions. Avoid sharing sensitive information like passwords and account details with unregistered apps.
Consequences of Using an Unsafe Loan App
Let’s look at the effects of using an unsafe loan app:
● Compromised Data Privacy: Since loan apps collect your data, you must read their privacy policy carefully and avoid sharing sensitive information unnecessarily.
● Hidden Charges: Understand the loan terms and conditions, enquire about the loan-related charges, and clarify any doubts before applying.
● Fraudulent Practices: Avoid using fraudulent apps that look for submissive loan seekers. Verify the app’s legitimacy and read its reviews to avoid falling for a trap.
● Identity Theft and Phishing: Avoid clicking on suspicious links or providing sensitive information over an unsecured network. You should install an antivirus program and update your phone’s security settings to keep your data protected.
● Unregulated Operations: You may find several apps operating without regulatory oversight. Choose a licensed or registered lender to ensure legal compliance, and be careful when applying for a loan.
What to Do if You Fall Prey to a Loan Scam?
If you fall prey to a loan scam, here are a few places where you can seek help:
● Customer Service Centre: If you suspect fraud, immediately call or email the lender’s customer care number. A loan provider will respond to your concerns and try to resolve the issue.
● RBI (Reserve Bank of India): The RBI regulates financial services in India. If you are affected by fraud, you can file a complaint on their website.
● Cyber Crime Cell: If you detect any fraudulent activity, you must report it to the cyber crime cell of your local police station to take legal action.
You will find numerous instant loan apps in India. However, you must check their number of downloads and read their reviews before installing one. Awareness about loan scams can keep you safe from falling for them. Hero FinCorp is a loan app for protecting your data and ensuring a safe and secure application process.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.
