In the digital age, the convenience of obtaining loans through online lending platforms can be very beneficial. However, it presents a unique set of risks, especially with regard to possibly illegal use. Users of these apps run the danger of experiencing money exploitation, harassment, and privacy violations. It is crucial to remain vigilant and alert in order to defend oneself from such threats.
"Recent incidents have underscored the persistent threat posed by unlawful digital lending applications," stated Sidharth Vishwanathan, Chief Risk Officer of KreditBee. These apps frequently target people who are struggling financially and entice them with offers of quick loans at affordable interest rates. But they also often use unscrupulous tactics, such charging exorbitant loan rates, hiding fees, and using unethical debt collecting techniques like picture morphing and distributing, among other things.
This is a list of indicators that a lender is dishonest and how to avoid falling victim to fraud:
Links that are not requested: Be cautious when clicking on links that are not requested, especially if they seem to be offering services or money. "Avoid downloading programmes from unidentified sources and clicking on dubious links. To protect your personal information and money, use reliable app shops and do extensive research before installing any loan apps, Vishwanathan said.
RBI license: Borrowers should check the website to make sure the app is linked to a legitimate lender that is registered with the Reserve Bank of India (RBI) or that works in conjunction with a bank or non-bank financial institution (NBFC) that is registered with the RBI in order to validate the validity of a lender. Illegal apps don't state clearly which legal body they are lending money to.
Clear and understandable terms: A reputable lender will provide clear and understandable terms and conditions that include information on interest rates, repayment schedules, application procedures, and additional costs. Be wary of lenders who use cryptic or imprecise wording or charge additional costs.
Grievance redressal: In order to protect the interests of borrowers, authorized lending applications are required to adhere to a number of regulatory directives pertaining to KYC (Know Your Customer) procedures and collection tactics. These directions are often included in the grievance redressal section of the application.
Avoid upfront fees: Avoid using lending applications that ask for payments up front or other expenses before accepting a loan. Instead than demanding payment in full up front, "legitimate lenders usually deduct processing fees from the loan amount or include them in the repayment plan," according to Vishwanathan.
You may better protect yourself from unauthorized lending apps and secure your cash by doing these actions and being alert.
