Some life needs are inevitable, some are seemingly inevitable while the others are superficial. But it’s all subjective. What might be important to Alok might seem frivolous to Abhishek and what these two deem as unnecessary could be a basic need for a third person.
What makes personal loans appealing is its unsecured nature without any requirement for the applicant to pledge a valuable asset or collateral and thanks to the speedy disbursal, people also call it emergency loans. Here, lender bears the majority of the risk as they are totally relying on your past credit behavior and credit score. In short, lenders trust you with personal loans and no questions asked!
So let us stop with the judgments and talk about 4 scams related to quick personal loans and its providers so that you are aware of the ‘games’ that mess up with your head and protect yourself.
- Approval only with an advance:
An oft-heard ploy pulled by suspicious financiers is to request a ‘small or nominal’ advance from a customer. So you are asked to pay the processing charge or insurance or some other fee in advance and they promise (often verbally) to give you the loan. This is a sham. Lenders are not allowed to take the fee without approving your requested amount. Period!
- Too-good-to-be-true offers:
Some lenders offer loans at unbelievably low rate with minimal fees. They ask for original documents for verification and some loan seekers give it too. There have been stories of people getting blackmailed (if you want your document back…!), having their document used for some nefarious purpose and what not. Please check the reliability and reputation of the lender before you agree to anything. In this information age, how hard can it be?
- Lenders affiliated with many banks:
Some alternative lenders (including the genuine ones) with tie-ups with multiple banks/NBFCs file your application form and other documents in all those banks. If your creditworthiness is not up to mark, your application is most likely to be rejected which can lead to a dramatic fall in your credit score. Forbid you lender explicitly from doing this.
- Document-collection fee:
There is no thing such as this and please feel free to refuse.