Getting a Personal Finance loan is no longer a complicated process. You have a number of banks and financial institutions that offer instant personal loans. However, because of the ease of availability, personal loan fraud has increased significantly in recent years. Personal loans are undeniably beneficial, but they can also be dangerous if not handled properly. 

As a result, it is critical to understand how to identify and avoid scammers who attempt to defraud people seeking loans. With this guide, we will learn about online fraud, frequent scam techniques, and how to identify scams and fraud sites.

Warning signs of possible fraud:

• Unsolicited Offers: Be cautious if you receive loan offers out of the blue, particularly from unfamiliar sources. They may offer instant money, like getting cash in just 5 minutes. 
• Pressure to Act Quickly: If someone forces you to make rapid judgments or payments without allowing you time to deliberate, be wary. Scammers create limited-time offers and use scareware methods to get applicants to make hurried decisions, claiming the deal will expire soon. Essentially, reputable lenders provide interest rates after reviewing your credit history.
• No actual Address: The lender does not give the victim any physical address or contact information. Once the money is transferred, he will no longer contact you or answer calls/emails. It will be very difficult to contact the scammer later.
• No Credit Check: Scammers may also promise to grant a quick loan without reviewing your credit history. 
• Advance Payment Requests: When a lender requests money beforehand, it is usually a scam. Scammers may demand advance payment of specific amounts in the form of GST or processing fees. No reputable banker will want payment before processing your loan application.
• No government registration: Legally, the lender has not registered with the government. To continue in the lending business, lenders must register with the government.
• Bad Communication: Poor language in communications and bad communication are common indicators of fraud.

How can you avoid yourself from scams? 

Step 1: Research the lender and read online reviews to assess its reputation.

Step 2: Verify Online Finance licensing and whether the lender is registered with the Reserve Bank of India (RBI).

Step 3: Check contact details, including the lender’s physical address and phone number.

Step 4: Avoid upfront costs and refuse to pay them if asked to do so before obtaining your loan.

Step 5: Protect your personal details and do not share anything until you are confident that the lender is genuine.

What should you do if you have identified any scam? 

When dealing with scammers, you should be prompt and alert. Here’s what to do if you come across loan scams or fraud sites:

• Break any interaction with the scammer.
• Next, notify the local police authorities.
• Now, tell your bank and request that they protect your accounts if you give any information to the scammer.
• You can also check your credit record if you suspect any fraudulent activity.

Everyone must be cautious while getting a personal loan. Many people are facing issues because of scams in the market. Thus, while getting a loan, always ensure about the needs and wants and also take care of any possible future scams. Take action in case you face any suspicious activities while getting a loan. Trust verified and government-approved money lending app and loan providers.