Personal loans are a convenient way to meet urgent financial needs, but borrowers must remain vigilant. Fraudsters increasingly target borrowers through fake offers, phishing, and disguised schemes, leading to financial losses and identity theft. Knowing the common scams can help you protect your money and personal information.
1. Advance Fee Scams
What it is: Fraudsters promise quick personal loans but ask borrowers to pay a processing fee upfront. After payment, the loan never materializes.
How to avoid:
Legitimate lenders deduct fees from the loan amount after disbursal, not before.
Always verify the lender’s registration and credentials.
2. Fake Loan Apps
What it is: Some mobile apps mimic official bank or NBFC apps, asking for personal data like PAN, Aadhaar, bank details, and OTPs. The money may be stolen, or identity fraud may occur.
How to avoid:
Download apps only from official bank websites or verified app stores.
Check reviews, ratings, and developer information before using.
3. Phishing Calls and Emails
What it is: Scammers pose as bank executives and ask for sensitive information, promising instant loan approval. They may claim your loan will be canceled unless you provide passwords or OTPs.
How to avoid:
Banks never ask for OTPs, passwords, or CVV numbers over phone/email.
Verify calls by contacting your bank directly.
4. Pre-Approved Loan Traps
What it is: You may receive messages claiming a “pre-approved personal loan” with extremely low interest rates. On applying, hidden charges, high fees, or exorbitant interest are revealed.
How to avoid:
Read all terms and conditions carefully.
Compare the offer with other banks before committing.
5. Loan Restructuring or Foreclosure Scams
What it is: Fraudsters target existing borrowers and offer to restructure or foreclose loans at a small fee. Once paid, the service is never provided.
How to avoid:
Only approach your current lender for restructuring or foreclosure.
Avoid third-party intermediaries demanding upfront fees.
Tips to Stay Safe
Verify Lender Credentials: Check RBI or NBFC registration.
Avoid Sharing Sensitive Info: Never share OTPs, passwords, or bank PINs.
Check Reviews and Ratings: For apps and fintech platforms.
Read Terms Carefully: Hidden fees can turn an attractive loan into a costly trap.
Report Suspicious Activity: Contact your bank or law enforcement immediately.
FAQ
1. How do personal loan scams usually work?
Scammers may collect upfront fees, steal personal information, or lure borrowers into fake loan schemes.
2. Can legitimate banks ask for upfront fees?
No. Any processing fees are deducted from the loan amount, never collected before disbursal.
3. How can I verify a lender?
Check RBI’s official list of registered banks and NBFCs, and confirm with their official contact details.
4. What should I do if I fall victim to a scam?
Immediately contact your bank, change passwords, and report to local authorities or cybercrime cells.
5. Are online loan offers safe?
Yes, if the lender is verified, registered, and transparent about fees and terms.
Published on : 7th October
Published by : SMITA
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