How to Be Safe From Frauds While Applying for Personal Loans?

Personal loans can become your helping hand, whether you want to buy a dream home or a car. Loans are meant to provide financial assistance to individuals, but sometimes they may place a burden on you. Nowadays, personal loan fraud is rapidly increasing. Every now and then, news regarding loan fraud flashes in bold type. As per the media reports, 90 banks and financial institutions have reported 65,463 loan fraud cases till March 31, 2021. So, the topic for the debate is, “How can one prevent themselves from fraud while applying for personal loans?" Continue reading to find out! 

What is a Personal Loan Fraud? 

Loan fraud is a situation where fraudsters personalize themselves as reputed lenders and target people to offer quick and hassle-free loans. Generally, fraudsters may use the following traits to make you fall into a trap. 

1. Loan fraudsters create a sense of urgency and will ask you to act within 24 hours. 
2. They will provide you with a loan without doing any background checks. 
3. They will ask high processing fee before the issuance of a loan. 
4. There are a lot of hidden costs and charges which are not disclosed by them until the deal is closed. 
5. Loan fraudster companies are not registered with the Reserve Bank of India. Also, these websites have bad reviews. 
6. The loan document may be unstructured and not in the proper format. 

Tips to Be Safe From Frauds While Applying for Personal Loans? 

Here are some tips to stay safe from fraud while applying for personal loans. 

• Read Documents Carefully: Whenever you receive personal loan phone calls, make sure that you read the loan fine print shared by the lender carefully. Check for the details like interest rate, spelling errors, email address, contact number, and more. 
• Don’t Pay Upfront Fee: No financial institution charges additional fees to provide a loan amount into the bank account. Therefore, if any fraudster asks you to pay money report their number at the earliest. 
• Confirm Details With the Company: Do not hurry while applying for a personal loan. Always confirm the loan amount, interest rate, and other details provided by the calling person through the customer support of financial institutions. 
• Don’t Share Your Personal Details: Never provide your personal details such as PAN number, Aadhaar card number, OTP and other details over the phone. Always cross-check the details provided by the company and its background information through customer support. 

Wrap Up 

In conclusion, personal loans financially help you achieve different goals, such as purchasing a home, a car, or a child's education. Make sure that you never fall into a trap while applying for personal loans. Always do a background check on the financial institution, and never share your personal details with them. 

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