Think Twice Before Taking a Personal Loan from a Digital Lending App

During financial distress, or even when there's no distress of this sort but you are in need of money, you may opt to go with taking a personal loan from a digital lending app. Genuine apps may bring some benefits as well that may attract you toward choosing this option to arrange funds. However, is it a wise decision to do so? Not always. And the solution? Read further to know how you can make more informed financial decisions and avoid fake/fraud digital lending apps.

Digital Lending Apps

There is a presence of some digital lenders that work appropriately and legally while offering you personal loans. However, there have been several unfortunate cases (frauds) in the country's past which necessitate immense care when planning to receive loans from digital apps.

Getting a personal loan from a digital lending app is highly risky, and has led people to commit suicides due to the fear and stress created by the fraudsters.

Loans from Digital Lenders - What Should One Do?

There are certain criteria that can help you well enough to understand whether an app is fake or genuine.

Below are the factors you need to study before you decide to take the loan:

RBI Regulation

This is the most significant aspect to seek when going forward with a digital lending application. It is a must for a lending application to be backed by the RBI. It needs backing from an RBI-registered banking institution or NBFC. Most apps that do not function under the RBI regulations are carrying hidden charges and lack transparency, posing a high risk for you.

They ma appear professional in design, but can still be complete fraud. It is very necessary that one remains away from using the apps for loans to avoid getting misused.

Hidden Charges

When the platform is genuine, it serves the customers with transparency and clarity. However, with fake apps, there can be hidden or unclear charges that you're kept unaware of in the beginning.

Genuine platforms clearly mention all details right from the very beginning – processing fee, applicable interest rates, loan repayment tenure and schedule, several other associated details/charges. Missing or vague details are often a sign of a serious red flag.

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Track Record

When you choose a digital lending platform for getting a loan, do not submit the personal loan application right away. Instead, beforehand, check its presence on the leading App stores as well as social media platforms. There can be various signs that show the app's fake nature – absence of user reviews, too many unresolved complaints and no or lack of feedback. There can be poor reviews displaying the fact that the app's nothing but a fraud for looting people of their hard-earned money.

Data Access

Do not do the mistake of sharing your personal information when the app appears to be asking too many permissions to access your data. These apps, if fraud, will not be bound by the central government's data protection laws. Personal data needs to be kept private such as photos, media files, real time location, private contacts, etc.

Helpdesk Absence

When dealing with true, reputed financial institutions, we always find proper customer service platforms as well. Applications that do not appear to be having any helpline numbers, support emails or well-defined official address should be handled with caution.

Being cautious is highly required with increasing tech-related, finance-related frauds in not just the country, but across the world.

Why Stay So Cautious?

Also mentioned above, there have been incidents showing how people were duped by sending them a few thousands as personal loan amount, and later charging extremely high interest rates. When the victim is unable to pay the amount, s/he is threatened and blackmailed, having led to certain deaths and cases of severe depression.

It can cost you more than money.

Hence, stay well-informed. Be extra-careful and aware of the tech world. When choosing to get a personal loan from a digital lending app, leave no stone unturned in ensuring the app's genuineness. Getting loan digitally is possible with just a few taps on your mobile device, so make sure you do a good enough background check before going ahead with a particular digital lender.

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