Personal loans offer quick financial solutions, but they also attract fraudsters who exploit borrowers. Understanding common scams can help you protect your money and personal information.
Common Personal Loan Scams
Upfront Fee Frauds:
Scammers ask for advance processing fees or hidden charges before approving a loan. Legitimate lenders deduct fees after sanctioning the loan.
Phishing Scams:
Fraudsters may send emails, SMS, or calls pretending to be banks, asking for bank details, OTPs, or Aadhaar information.
Fake Loan Offers:
Promises of instant loans at low interest rates with minimal documents can be traps. Verify the lender’s registration and authenticity.
Identity Theft:
Scammers use personal information to apply for loans in your name, leaving you with liabilities you didn’t authorize.
Loan Restructuring Frauds:
Fraudsters promise easy restructuring of existing loans for a fee but disappear after payment.
How to Protect Yourself
Verify the Lender: Check the RBI license or registration number of the bank or NBFC.
Never Share OTPs or Bank Details: Banks never ask for sensitive information over calls or emails.
Avoid Upfront Payments: Legitimate lenders deduct fees only after loan disbursal.
Use Official Platforms: Apply only via official bank websites or verified apps.
Monitor Credit Reports: Regularly check for unauthorized loans on your CIBIL or other credit reports.
FAQs
Q1: Can personal loan scams happen online?
A1: Yes, online scams via fake websites, emails, and social media are common.
Q2: What should I do if I suspect a scam?
A2: Immediately contact the lender, file a complaint with the police, and report to cybercrime portals.
Q3: Are all low-interest personal loans scams?
A3: Not necessarily, but extremely low-interest offers with minimal documentation warrant verification.
Q4: How can I check if a lender is genuine?
A4: Verify the lender on the RBI website or NBFC registry and read customer reviews.
Q5: Can identity theft loans be reversed?
A5: If reported promptly and evidence is provided, banks may block or reverse fraudulent loans, but timely action is crucial.
Published on : 17th October
Published by : SMITA
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