In recent years, India has seen a surge in loan scams targeting unsuspecting borrowers. Fraudsters lure people with promises of instant loans, low-interest rates, or zero documentation. Many victims lose money through hidden charges, fake apps, or identity theft. To protect yourself, it’s crucial to know the most common loan scams and how to avoid them.
1. Fake Loan Apps
Fraudulent apps on Google Play Store or other platforms mimic legitimate lenders.
Victims are asked for advance processing fees or grant apps permission to access personal data.
Once payments are made, the apps vanish, or data is misused.
How to Stay Safe: Download loan apps only from verified banks/NBFCs, check reviews, and avoid upfront payments.
2. Loan Processing Fee Scam
Fraudsters promise quick loan approvals but demand a processing fee upfront.
After payment, they disappear, leaving the borrower without funds.
How to Stay Safe: Genuine banks deduct fees from the loan amount, not in advance.
3. Phishing Calls and Emails
Scammers pose as bank officials and request sensitive details like PAN, Aadhaar, or OTPs.
Victims unknowingly share information that leads to identity theft and fraudulent transactions.
How to Stay Safe: Never share OTPs or confidential documents over calls or emails. Banks never ask for them.
4. Debt Trap Loans
Fraud lenders offer small instant loans but impose exorbitant interest rates.
Borrowers fall into a cycle of debt as penalties and hidden charges keep piling up.
How to Stay Safe: Always check the interest rate, repayment terms, and RBI registration of the lender.
5. Fake Loan Approval Letters
Scammers send official-looking loan sanction letters to gain trust.
Victims are then asked to pay for insurance, verification, or file charges before disbursal.
No loan ever gets credited.
How to Stay Safe: Verify loan approvals directly with the lender’s official website or branch.
Conclusion:
Loan scams are becoming increasingly sophisticated, but awareness is your best protection. Always verify the lender’s credentials, avoid upfront payments, and read terms carefully before committing. Remember: if a loan offer sounds too good to be true, it probably is.
FAQ :
Q1: How do I check if a loan provider is genuine?
Verify if the lender is registered with the RBI as a bank or NBFC.
Q2: What should I do if I fall victim to a loan scam?
Immediately report to the cybercrime helpline (1930) or file a complaint at cybercrime.gov.in.
Q3: Are instant loan apps safe?
Only use apps from RBI-approved lenders. Avoid apps with poor ratings or too many permissions.
Q4: Can banks ask for upfront processing fees?
No, genuine banks deduct fees from the sanctioned loan amount.
Q5: How to identify a fake loan email or message?
Check for grammatical errors, suspicious links, or non-official email IDs.
Published on : 4th September
Published by : SMITA
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