Caution On Quick Loans As Loan Scams Surge Amid Festive Demand

Scammers often exploit this period when many are looking for financial support for celebrations, promising hassle-free loans with little paperwork, but these often lead to financial loss or personal data breaches. Staying alert is key to avoiding these traps -- Amit Bansal, Founder of BharatLoan, tells Bizz Buzz

Mumbai: As the festive season begins, it’s important to be aware of the rise in loan scams that take advantage of people seeking quick loans.

Talking to Bizz Buzz, Amit Bansal, Founder of BharatLoan, said: “Scammers often exploit this period when many are looking for financial support for celebrations, promising hassle-free loans with little paperwork, but these often lead to financial loss or personal data breaches. Staying alert is key to avoiding these traps.”

He has suggested a few essential tips to protect oneself from festive season loan scams. “Make sure you’re working with a certified lender. Check for an authentic online presence, contact details, and customer reviews. Be wary of lenders with minimal online information or unclear contact methods,” he explained.

Reputable lenders will not demand large fees upfront before disbursing the loan. If a lender asks for advance payments, it’s a strong sign of fraud. If the loan offer sounds too good to be true, with no credit checks or unusually low interest rates, it probably is a fraud. Always approach such deals with caution. Ensure the websites you are using are secure (look for https in the URL), and never share sensitive information like bank details on unsecured platforms. By following these steps, one can enjoy the festive season without worrying about scams, he added.

Kaushik Chatterjee, founder & CEO of Unifinz Capital India, said: “During the festive season in India, the demand for quick loans and credit spikes, which scammers often exploit by targeting vulnerable borrowers.”

He has given an overview of the common festive season loan scams and tips for consumers to stay vigilant.

Festive seasons often bring attractive offers and discounts across various financial products. However, it’s important to be cautious about which products can realistically offer such benefits. While credit cards frequently provide festive cashback, discounts, and reward points, other financial products like loans or insurance policies may not be able to offer genuine special rates or discounts.

Borrowers should be wary of misleading promotions and ensure they fully understand the terms before committing, as some offers might be designed to exploit the festive shopping rush rather than provide actual savings. Always verify product authenticity and avoid deals that seem too good to be true.

Be it festive season or any normal day, keeping your financial information like user IDs and creating strong passwords are always a better option. Be mindful of not logging into your financial accounts from untrustworthy devices and refrain from saving your passwords on such devices as it could lead to financial frauds

Some scammers pose as representatives of legitimate NBFCs (non-banking financial companies) or banks, offering loans and asking for an advance processing fee, GST, or insurance premium. Once paid, the scammer disappears without providing the loan. Legitimate lenders do not ask for processing fees or other charges before disbursing a loan. Be wary of anyone requesting money in advance.

Check the legitimacy of loan apps or platforms by reviewing their registration with the RBI or other regulatory authorities. Always ensure you are dealing with a licensed institution. Before applying for loans via apps or online platforms, read reviews and user feedback to ensure the authenticity of the service.