Don't Ignore These Red Flags Before Using Digital Lending Apps

Many fraud loan apps seek permission to your data and access to camera as well as contact list, which could be used later for harassment or blackmail.

Don't Ignore These Red Flags Before Using Digital Lending Apps

Many digital loan apps are preying on desperate borrowers

In recent years, a surge has been observed in financial fraud involving illegal digital loan applications.

The modus operandi of such apps is to lure vulnerable customers by providing instant loans through an easy process and with minimum paperwork.

However, the interest rate for these loans is kept too high, rendering many unable to repay it. Once the borrower fails to repay the loan, the recovery agents often resort to harassment and blackmailing, which has driven people to suicide in several cases.

Many digital loan apps are thriving illegally on app stores preying on desperate borrowers.

The Reserve Bank of India (RBI) has also taken cognizance of the matter and has planned to prepare a safelist of all the legal online lending apps that will be allowed to operate.

However, it is always advised to remain cautious so that you don't fall prey to any fraudulent online financial platform.

Before using any loan app, consider the following points not to become a victim of any financial fraud:

  • It has been seen that once you install these illegal applications, they request access to your personal data such as contact list, photo gallery, and camera. So, always avoid applications that you feel can compromise the safety and privacy of your personal data.
  • If you are doubtful about the authenticity of any loan app, always go to a known bank or financial company to secure a loan. The RBI maintains a list of all the Non-Banking Financial Companies (NBFCs) from which you can safely seek a loan.
  • One must also avoid clicking suspicious links attached to emails and messages that promise instant loans with lucrative offers.
  • Such links are often malicious and can infect your system with viruses or spyware that, in turn, steal personal information. The data can then be used by fraudsters to threaten or blackmail you.
  • Never download any digital app from reliable sources like Google Playstore or the App store (for iPhones). Before downloading any financial app, always verify details and go through the reviews shared by the users.