7 Signs Of A Personal Loans Scam

Personal loans are like a blessing for people who are looking to bridge the gap between their financial status and their goals.  But, did you know personal loan scams are very common in India? A lot of times, frauds claiming to be service providers trick people into sharing their personal details and money in the name of a loan and scam them. It is important to be able to identify personal loan scams to protect your hard-earned money. Here are seven signs that you must watch out for:

1. Demand for money in a verbal conversation: As a thumb rule, never pay for anything unless you get it in writing. Personal loan application procedure sometimes does involve a fee, but it is mentioned in the papers instead of being a verbal demand.
2. No credible background information: Always know your loan lender. Ask for details like a permanent address to help you identify if they are honest and credible or frauds. In most common scenarios, someone who is trying to scam you will insist on having all meetings at your place instead of their office. Take that as a warning sign.
3. Beware of the mode of communication: Open a national daily, every day you will find some or the other organization putting out an advertisement announcing a new personal loan scheme. Ads like these prove that the scheme is trustworthy. However, personal loan scams are mostly advertised by door-to-door campaigns and cold calling.
4. Email Check: More often than always, personal loan scams happen from strange email addresses. They can be identified if one looks at them with a close eye. Check the domain, check for any spelling errors and identify if the mail looks like written from someone from a reputed lender organization.
5. A sense of unnecessary emergency: Personal loan scams will always come with an urgency attached to them. This means that a fraud lender will try to pester you into signing the loan as soon as possible and pay your end of deposits at the earliest.
6. Easy no-check policy: Whenever a loan is approved, it is done based on some facts that tell your lender about your repayment capacity. Personal loan scams often skip checking of such facts. If your lender does not seem to be interested in doing a thorough verification of your tax returns and credit score, it should be an alert sign to you!
7. Website check: Websites can tell you a lot about its owner. Look for specifics like if 'Http' is followed by an s or not or if there is a lock sign next to the website address. Both these are indicators if the website is secure or not.

Hope your personal loan process is smooth and stress-free. Always be cautious and stay aware!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.