Highlight: As the instances of availing of personal loans have considerably increased, so have the personal loan scams. Here’s how to keep yourself safe from it.

With the advancement in the fintech sector in the recent past, availing of a personal loan has become as easy as probably online shopping. In today’s time, a person can even avail of a personal loan online, sitting comfortably at home, with next to no formalities or paperwork through platforms like EarlySalary

This option seemed godsent especially during the time where the entire world was battling the COVID 19 pandemic. On one hand, the income sources of many individuals dwindled, as there were several salary cuts and even layoffs, and on the other hand, several contingent expenses, such as the ones related to health issues or even for facilitating work from home, kept cropping up. To top it off, it was next to impossible to go to a bank physically and apply ( and complete the tedious process) for the loan. 

While the easy availability of personal loans has been quite the savior for many, especially during the COVID 19 Pandemic (as discussed above), all is not well in this regard. As the instances of availing personal loans have considerably increased during the COVID times, so have the instances of personal loan scams. In fact, within the past year, (up till March 2021), as many as 45,613 cases of loan fraud were reported which amounts to roughly Rs 4.92 trillion, revealed RBI as a response to a recent RTI application filed

Here is what you can keep in mind to not fall prey to such personal loan scams: 

  • Keep an eye out for online phishing 

While new and new NBFCs are coming to the market which are offering personal loans at just a click, it becomes difficult to know whether these websites and apps are genuine or not. 

The first and the most easily identifiable red flag is if the lender website does not have an ‘s’ after the ‘HTTP’ which means that the website may not be secure for online transactions. Such websites may use your personal information and which possibly can be the genesis of a personal loan scam. 

  •  The demand of an upfront cost or loan fee/charges 

While it is pretty standard to charge a processing fee for any personal loan being advanced, most lenders would either deduct it from the loan amount or adjust it within the repayment. If the lender is asking you to deposit any money upfront pre-approval or post-approval, before the disbursement of the loan, it may mean that they may misappropriate the money and may involve a personal loan scam. 

  • Urgent calls for a loan or limited period offers 

Getting a loan is not like buying a gadget online, there can not be ‘flash sales’ or ‘limited period offers’. Loans are directly linked to your credit history and if your lender is pushing you to make an urgent call on your loan, chances are that they may be pushing you to make a rash decision. Do not fall for such antics and make sure to do your due diligence before zeroing in on which personal loan you want to avail yourself to avoid getting trapped in a scam.

  • The terms and conditions of the loan are vague or obscure 

Any legitimate lender has standardised eligibility criteria and set terms and conditions attached with the loan.  This is what would constitute a binding contract between the borrower and lender and is equally to protect their own future interests as it is for yours. 

If the terms of the personal loan being offered to you are vague or are too good to be true, chances are that there may be some hidden agenda or a personal loan scam in the making.

While personal loan scams are getting way too common these days, with a little caution and alertness, you can avoid them altogether. Just make sure to keep in mind the above-mentioned red flags and make a wise choice. It is always good to go with a reputed name while you are choosing your lender, like EarlySalary. EarlySalary is one of the most preferred online lenders out there

So, get started on the EarlySalary experience now!

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