Financial Safety 
5 Ways to Verify Loan Apps
Loan apps can be an easy and convenient option. But not all of them are safe and can be used to commit fraud.
R emember how difficult it used to be to get a loan? One would have to visit the bank, that too during very specific timings, and stand in line, fill out several forms, and make multiple visits to get approval. Those wishing to apply for loans would often have to take time off work since the bank would be open mostly on weekdays only. The entire process could take days, in some cases even a week.
Today you can get a loan in minutes. All that you need to do is download an app, upload your documents, and if the application is approved, the money is in your account faster than your quick commerce delivery. Forget about visiting the bank, you do not even need to get up from your bed to get a loan digitally. You can even get it in the middle of the night, long after the bank or any other business closes.
While quick loans like these can be incredibly convenient, especially during emergencies, you must be careful when choosing the lender. Many loan apps exist which are illegal and engage in predatory practices. It is important to thoroughly verify apps providing instant loans carefully before you borrow. Here are some of the best ways to do that.
Make Sure it is An RBI-Backed NBFC
The first and most important thing to do when verifying a loan app is to check if an RBI-backed Non-Banking Financial Institution (NBFC) owns it. To legally be recognized as lending institution, the RBI must provide a certification. This is what gives an NBFC the power to provide credit to the public.
The RBI certification is always provided on an NBFC’s website, at the bottom of the homepage. If the app is not owned by an RBI-backed NBFC, then it cannot be considered a legal entity and is best avoided.
Also Read:Beware of Loan Apps: How to Avoid Financial Traps Online
Examine the Website in Detail
While you are on the app or NBFC’s website, go through it in detail. Look at how thorough and informative it is. Get a feel of the UI/UX and overall appearance and functionality. Leading, reputed NBFCs will have well-designed websites that are easy to navigate. Suspicious one will have minimally designed ones with few features. This is a major giveaway that it cannot be trusted.
Ensure Only Necessary Permissions Are Granted
Most loan apps should only require camera access for you to photograph documents, and SMS access to receive OTPs. No app needs access to your contacts, call logs, or gallery. If any platform is asking for permissions to access these then it is certain that they intend to misuse them.
Asking for excessive permissions is always a red flag. Do not let any app, whether it is a loan app or some other kind have such a high level of access to your phone.
See its Presence on App Stores
You may come across a loan app as an APK online. Never download such a file. It is always shared in such a format because it is illegal. A proper, legitimate loan app will always be available on different app stores. If the app is not available for download on any of the app stores, then it is not a trustworthy one.
Loan apps are an incredibly convenient option to get quick cash. However, there are many criminals online who exploit this need and abuse personal data to extort innocent people. To ensure this does not happen, make sure that the loan app you use is RBI-backed, has reliable reviews, and a prominent online presence. Once you have looked out for all of these, you know you can borrow money safely.
Related Articles
