The global pandemic led to financial hardships for millions of Indians. This included loss of jobs, pay cuts and increase in medical expenses. This atmosphere became the launchpad for numerous loan apps that offered quick cash with minimal paperwork. Many of these have already been busted by the regulator, yet several are still in operation.

 

Their modus operandi is simple: Companies which are not regulated by RBI create illegal loan App. They lure customers by promising instant cash, often at usurious rates and opaque charges. The loan Apps take permission to read customer’s email, messages and other personal data. Subsequently, if the repayment terms are not complied with, they threaten to shame customers socially, by extracting information they illegally obtain from their mobile phones or informing their personal contacts about their inability to repay the EMIs on time. The scale of the problem can be gauged from data collected by RBI in 2021. Over two months, January and February, RBI found 1,100 unique Indian loan apps available in over 81 app stores, of which 600 apps were illegal.

 

The key to safeguarding your money and personal reputation is by being aware of such fraudulent apps and take the necessary precautions while availing of loans.

All digital lending apps are obliged to register with the RBI. You must check for the company’s formal registration number with RBI and authorisation to offer loans before availing a loan.

Verify the loan agreement and read the terms and conditions carefully. It should clearly list the amount being borrowed, the rate of interest, EMI amount per month, repayment tenure, etc.

Stay alert for some red flags such as:

• 1.
• Lack of company website

• 2.
• Any abnormal KYC process being followed, or unnecessary, extra personal/financial information is asked of you

• 3.
• App asking for access to read your personal data on your phone

• 4.
• Lack of any physical address or contact number of the company

 

For over 15 years, HDB Financial Services has taken immense pride in serving our customers with the utmost respect, trust, and transparency. For any queries regarding our products and services, you can reach out to us directly through one of the several mediums, such as:

• Website:
• https://www.hdbfs.com/

• Helpline:
• +91 44 4298 4541

• Missed Call Service:
• +91 44 456 0240

• WhatsApp:
• +91 73049 26929

 

As the adage goes, “if it’s too good to be true, it probably isn’t”. So, stay alert and stay safe.