Personal Loan: Common scams and how to avoid them

livemint.com:

Confirm the lender’s registration: Authentic lenders operating in India are required to be registered with the Reserve Bank of India (RBI). Validate the legitimacy of the lender by visiting the RBI website and checking the “All Licensed Banks" section. - Compare interest rates and fees: Avoid accepting the initial offer you come across.

Conduct thorough research and compare interest rates, processing fees, prepayment penalties, and other associated charges from various lenders. Consider exploring reputable online financial marketplaces for a comprehensive overview of available options. - Review online feedback and ratings: Seek independent reviews and ratings of the lender on reputable websites.

This can provide valuable insights into the experiences of other borrowers, covering aspects such as the application process, customer service, and loan terms. - Exercise caution regarding upfront fees and unattainable promises: Genuine lenders generally refrain from requesting upfront processing fees or security deposits before loan approval. Exercise caution when dealing with lenders who guarantee approval or present interest rates that appear overly favourable and may be too good to be true.

- Seek transparent communication: A reputable lender will provide clear explanations of all loan terms, conditions, and fees before you submit your application. Additionally, they should have a dedicated customer service department to address any inquiries you may have. Avoid sharing your social security number, bank account details, or any other sensitive information unless you are entirely certain that the lender is legitimate.