Digital and technological advancements are a boon for the financial industry, but they have their own set of challenges. Technological advancements have made banking transactions quick and easy. But, it also led people to conceal their identity, hack into others accounts, hide behind the anonymity of the internet and impersonate legitimate companies to scam people.
The COVID-19 pandemic further acted as a catalyst as it took the world by surprise. The financial unpreparedness to deal with the adverse situation has increased the financial issues of many people.
To deal with short-term financial issues such as business losses, salary cuts, and loan repayments, people turned towards loans as a saving grace, which further gave way to an increase in personal loan frauds in India.
Therefore, potential borrowers must be aware of personal loan scams and learn how to spot them to save themselves from financial loss.
Here are a few examples of loan scam messages that you may receive:
- ‘Dear customer! Congratulations, you are chosen as a winner for a 0% interest-free loan of Rs. 5,00,000. Click on this link to avail of the offer.
The offer will be valid for 24 hours. Zero documents required, pre-approved loan. Claim now.’ - ‘Dear customer, I am writing to you from Bajaj Finance. Request you transfer a loan fee of Rs. 10,000/- to claim your interest-free loan of Rs. 3,50,000/-. Offer valid till midnight.’
Here are a few ways to spot a personal loan scam:
- When you are asked to send the personal loan fee to the lender.
- When a sense of urgency is created.
- When the website of the loan provider is unsecured.
- When they claim of providing easy money at shockingly low rates of interest.
- When no documentation requirement from your end.
How to prevent a loan scam?
The following checklist can help you not fall prey to these scams.
- Verify the physical office address of the lender.
- Do not transfer any money or fees upfront.
- Call the company to check if the personal loan offer is valid or not.
- Read the terms and conditions of the loan beforehand.
- Check the lender’s website, and reviews, and speak to people who have already availed of personal loans.
- Do not upload any of your confidential data on unauthorised apps.
Scammers may take an advantage of people who are going through a financial crisis. Therefore, it is important to be alert while dealing with financial matters. The basic checks from our end can help you to stay from any scams.
Sign-in to My Account and check out our ‘help and support’ section for any query related to personal loans.
