It could take a lot of paperwork and time to obtain a personal loan from authorized banks. However, many small mobile app-based firms are now providing loans quickly and without any paperwork. This results in quick cash in the range of lakhs within minutes. However, these mobile lending apps have exorbitant interest rates and cannot be fully trusted as reliable lenders.
Recently, Google deleted about 100 personal loan apps that had violated its user safety guideline. The withdrawn apps increased interest rates, gathered personal information, and then improperly exploited that information. You must make every effort to guarantee that the app you select is backed by a reputable organization. When an instant loan is required, an extensive investigation of the lender might not be possible due to the urgency of the situation. However, this could have unfavorable effects because counterfeit apps cannot be trusted to be reliable lenders and may employ unlawful collection methods. Therefore, it would be wise to personally verify these apps before borrowing money through instant personal loan apps.
Ways to verify lender before taking the personal loan
Know your lender
Check the company’s RBI registration status with a fast Google search before applying for a loan. Companies that are subject to RBI regulation are required to abide by regulatory requirements and uphold a strict code of behavior. It’s likely that a lender application won’t be subject to any privacy policies if RBI does not approve it.
The mobile loan application from your lender is unreliable if it lacks a website. Check for “HTTPS” in the website’s URL once more, even if it is listed. Certainly, a trustworthy lender would ensure that the connection to its website is secure. These websites are equipped to protect their users’ identities from hackers who steal their personal information.
A warning sign is that the majority of unlawful lending apps tend not to have listed websites. Once more, even if the website is listed, you should verify to see if the business is registered with the RBI or affiliated with a reputable bank or Non-Banking Financial Company.
Before applying for any loans, always double-check the personal loan interest rates and the late payment penalties. Anytime a lender authorizes a loan without checking your credit scores or displaying a lack of transparency regarding the loan interest rate, it is probably a scam.
Look up customer reviews of the organization on Google Play Store to get a sense of what to expect. You can get to know a company by reading the Google Play Store reviews for the lender’s app. Find reputable websites and see how they rate the application.
Each lender must have a registered physical address, a registered phone number, and a registered email address. If you do not locate any of these details, that is a warning sign that the loan application may be false.
Grievance redressal of your lender
Finding legal lending applications that are actually connected to RBI-registered NBFCs can be done by looking for a Grievance Redressal Mechanism on your lender’s website. Verified lenders follow a variety of KYC regulatory standards and collection practices that are intended to safeguard customers.
There are numerous excellent, cutting-edge, technically advanced personal loan apps available today that are trying to increase the Indian population’s access to credit and financial inclusion. However, there are also a lot of illegal loan apps available. Therefore, it is the responsibility of both lenders and borrowers to exercise caution and only adhere to best practices when choosing to apply for a loan through a mobile loan app.