Beware of fraudulent digital-only/online lenders, suggests Apnapaisa

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Beware of fraudulent digital-only/online lenders, suggests Apnapaisa

Posted on April 11, 2022

Over the past decade, with the advent of advanced technologies, the world of finance has witnessed rapid growth in terms of the ease and availability of finance for all sectors of society. Therefore, our lives revolve around these financial instruments and the most common of all is a personal loan. It has become an inevitable part of our lives, as a quick tool to get funds in times of emergency or urgent need.

With the covid-19 pandemic, over the past couple of years, people had no choice but to transact through digital media. For small loans, many start-ups took it as an opportunity and offered their fully digital lending platforms and the process was comfortable. As it is an unsecured loan, people who are suffering or have gone through a liquidity crunch choose to opt for an instant personal loan which can easily be availed online without having to visit a branch or submit documents in person. However, this has led to a surge in the number of online fraudsters who take advantage of someone’s misery and clickbait users who urgently need it.

At Apnapaisa, we have arranged some prerequisites that can help a borrower better understand the do’s and don’ts of availing an online personal loan from a digital-only lender. Let’s discuss this a bit more;

Lender credibility

More often than not, whenever we transact online, there is always a chance that we will thoroughly research through various sources to ensure the legitimacy of a product or service. The same is true with a digital-only lender; a borrower should always ensure that he verifies the facts and information promised, even if there are bad reviews or testimonials reported by previous users. Also, check if the lender is a licensed entity or registered partner with any bank or NBFC as license is mandated by the Reserve Bank of India for all such lenders.

Interest rate fluctuation

To give borrowers the advantage of saving money wherever possible, in 2019 the Reserve Bank introduced the Repo Linked Lending Rate (RLLR) for all types of retail loans, in which the interest rate is flexible and changes depending on the central bank. pension rate. As this gives the borrower an advantage, many online lenders do not disclose the base rate and offer a rate that has a higher spread or margin. However, as these online lenders operate digitally and have less operational costs, a borrower has to negotiate for a lower interest rate than banks and NBFCs.

Terms and conditions

For most services that include a legal contract or agreement, there is always a set of terms and conditions that must be met. While taking out a loan from an online lender, a borrower should go through the intricacies of the agreement step by step, also seek clarification from the loan officer if there is any discrepancy. At the same time, keep in mind that online lenders offer flexible repayment options to choose from according to need and convenience. For transactions, it is advisable not to make payments to an individual account and ensure that the account is registered under the name of a bank, NBFC or registered entity.

Customer Support Team

The customer support or service team acts as a bridge between the borrower and the lender and plays a very crucial role for digital-only lenders. The convenience of availing an online loan should be backed up by robust customer support techniques, which can really come in handy to a borrower throughout the tenure i.e. from the time he asks for a loan and until the loan is paid off. At the time of negotiation, a borrower should request and ensure that the lender provides ongoing reminders for payments and updates regarding their loan account.

While a borrower makes sure that the checks mentioned above are cleared, he can apply for a loan online if it is urgent. If the borrower has a good credit rating, chances are he will get the best deal available from other lenders. All they have to do is make sure they are dealing with a genuine partner or lender and the chances of getting scammed are minimal to zero.

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