Beware of These Personal Loan Scams


What do you do when you encounter a financial crisis? The first thing you do is to explore Personal Loan options. Now, banks and NBFCs (Non-Banking Financial Companies) have various Personal Loan products. These loans have their advantages, such as:

1-They have a rapid turnaround time

2-Eligibility criteria are simple

3-No need to divulge the purpose of the loan

4-No need to provide collateral

5-Numerous options available

Hence, you Find Personal Loan Offers to be a favourite with people all over India. However, some unscrupulous people take advantage of this preference and try to hoodwink people by preying on their temptations. You encounter these Personal Loan scams almost every day. It is better if you know how to differentiate a genuine personal offer from a fraud offer.

Common Personal Loan scams

Advance Fee Scam

Remember that no bank or NBFC ever demands the payment of any fee in cash before the disbursement of the loan. Some financial institutions collect a proportion of the processing fees in advance (upfront fee), but they insist on payment by cheque. These institutions adjust the amount against the regular processing fees on providing the sanction of the loan.

Therefore, if you receive any call from a person representing the bank and demanding an advance fee, treat it as a scam. Genuine lenders call for processing fees, document verification fee, and other charges after the sanction. Your loan sanction letter includes these aspects in detail.

Phishing Scams

The phishing scams are prevalent. You get an email that some XYZ Bank has approved your Personal Loan. The email contains a link that you have to access and provide further details for the disbursement to take place. You will find that the link resembles the bank’s official website in many respects. However, they are fraud websites set up to solicit your vital information.

You provide your details unwittingly. The fraudster uses this information for opening fake credit accounts. Sometimes, these criminals hand over your personal information to financiers for a price. The best way to deal with such phishing scams is to ignore the emails. Never respond to the websites that do not have ‘HTTPS’ in the URL name. You will find that these fake websites have the ‘HTTP’ URL address.

Unsolicited Communication

You receive a dozen calls almost on a daily basis seeking your personal details, credit history, and other confidential information. They state that you qualify for a Personal Loan without submission of income documents or going through credit checks.

The primary objective of these people is to obtain your confidential information. These people send unsolicited SMS messages as well. Be careful of such unsolicited communication and do not respond to them. It is also better to register your phone number with the ‘Do Not Call’ registry to avoid receiving such calls.

No Credit Score Check Scam

No bank or NBFC ever approves Personal Loans without conducting a credit score check. It is mandatory on the part of the banks to carry out these checks. Hence, if you receive communication that a particular bank or financial institution does not insist on these checks, do not believe them in any way. These are scams to attract you and lure you into parting with vital information.

Why should you trust loan service providers like MyMoneyMantra for obtaining Personal Loans

MyMoneyMantra can help you get Personal Loans. All you have to do is to submit your identity information alone. You get access to all banks approving Personal Loans. You can compare these loans on a single screen and decide on the best offer. The concerned bank will then call you to complete the formalities. The customer service representative from MyMoneyMantra does not demand any confidential information such as email password, debit or Credit Card number, and so on.

1-MyMoneyMantra helps you connect with the genuine bankers and NBFCs thereby enabling you to get loans from anywhere in India.

2-The customer representative from MyMoneyMantra will contact you to obtain confirmation that you have contacted them for a Personal Loan. The representative will never demand you to divulge confidential information.

3-MyMoneyMantra follows a strict privacy policy. We do not share your information with any third party.

4-We obtain your permission before sharing your personal information with the bank to utilize towards the processing the Personal Loan.

Note these points when you apply for a Personal Loan:

1-Apply through trusted online lending marketplaces like MyMoneyMantra or through bank’s original site.

2-Never respond to phishing emails by clicking on the spurious links

3-Never part with cash as no bank ever asks for upfront payment in cash

4-Ignore phone calls that promise to help you with Personal Loans

5-Disregard spurious loan sanctions without having applied for the Personal Loan

6-Do not believe claims that you do not have to submit to credit score checks


A little care can save you from these Personal Loan scams. Awareness of these scams is important.


Also Read: 10 Important FAQs About Pradhan Mantri Awas Yojana Answered

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