With the plethora of lending apps in the market, finding a trusted and reliable loan app for your diverse credit requirements can be difficult and confusing. Fairly often, you can come across spurious apps masquerading as genuine loan apps and attempting to cheat individuals.
A recent RBI report has underlined that, at present, there are over 600 unauthorized lending apps for mobile phone users in the country.
The report also said that if a mobile phone user searches for a lending app via keywords, such as ‘instant loan,’ ‘fast loan,’ ‘loan,’ ‘best loan app,’ and so on, then the search result would reveal over 1,100 illegal apps, which are not under the existing regulatory framework.
The report added that all such unauthorized apps were available across 81 app stores in January 2021. Taking a loan via these apps would mean providing them access to your private data, paying high-interest rates and getting into a vicious cycle of harassment.
To avoid falling into the trap of fraud lending apps, you must exercise due diligence. Here’s a look at the key factors you must consider to identify a reliable loan app:
1. Check Lender Credentials, Including RBI Registration:
Foremost, you should check the credentials of the lender by verifying its registration. If the lender is not registered with the RBI, it means that the app is unauthorized and fraudulent.
Financial institutions, including banks, Fintech lending companies and NBFCs, registered with the RBI have to follow a set of strict guidelines to ensure transparency in lending transactions.
You can also check whether the lending app or company is incorporated in India. A foreign app providing loans is outside the ambit of regulation.
2. Check for the Lender’s Physical Address:
To differentiate a genuine loan app from a fake, check whether the lender has provided a physical address for its office.
While regulated lenders invariably include the details about their addresses and contact numbers, the fake apps will deliberately not provide details of their office or location. This is to prevent borrowers from initiating legal action against them.
While it is common for all loan apps to ask for permissions regarding your contact address and more, what differentiates a genuine loan app from a fake is their policy regarding data privacy.
Before installing a lending app, check whether it has provided the details about data privacy. Remember, a reliable loan app will keep your private data confidential, while a fake app can misuse your data, making you susceptible to online scams and fraud.
4. Check the Interest rates, Charges and Loan details:
Regulated lenders, following RBI norms, provide for standard interest rates and associated charges. Similarly, the loan amount, eligibility conditions, repayment tenures and the disbursal time are also in sync with the established practices.
Though the stipulations can vary slightly because of your individual profile, there’s never a complete departure from the norms. But fake lending apps can promise you alluring credit at fascinating interest rates.
The catch, however, is that these loans will carry a host of hidden charges and fees, which will make the total cost of your loan exorbitant. If you come across a loan app that provides unbelievable credit offers, immediately raise a red flag.
5. Check User Reviews:
The easiest way to spot a fake loan app is to go through the user reviews. Unauthorized and fraudulent apps invariably will have user reviews detailing the malpractices. Many of these apps could also be reported by users as fake. Conversely, a genuine loan app will have good reviews.
6. Check for Secure Website:
Before downloading and installing a loan app, you can check its authenticity by visiting the lender’s webpage and checking for its security. The official web portals of genuine lenders will have secure SSL/TLS encryption with HTTPS syntax before the website address.
7. Check Google Play Store Rules:
To deal with malicious and fraudulent lending apps, Google Play Store has prescribed some rules. These include forbidding lending apps offering loans with a repayment tenure of fewer than 60 days. Being aware of these rules can prevent you from falling into the trap of an illegal loan app.
Now that you know how to recognise a reliable loan app, you can next analyze its features and benefits to get access to the best loans. With a wide range of top lending partners, including Bajaj Finance, Fullerton India, LendingKart, PaySense Partners, and more, the Finserv MARKETS app can easily be your preferred choice.
Be it personal loans, business loans or house loans, the Finserv MARKETS App is a trusted and reliable financial marketplace for your myriad credit requirements. You can compare the various offers and select the loan that suits you the best. What’s more, you get a free credit report, which can help you improve your CIBIL score.