Tech-savvy borrowing: How can you identify illegitimate lending apps? Here are 6 key tips

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Also Read: Research well before borrowing from digital lending apps, says Madhusudan Ekambaram of KreditBee As the regulatory body progresses towards eliminating illegitimate lending apps, it's equally important for you to remain vigilant and detect fake lending apps independently. Here are some tips to help you identify and avoid illegitimate lending apps: The Reserve Bank of India (RBI) has stringent guidelines for fair lending practices. Legitimate lending apps or Loan Service Providers (LSPs) adhere to these regulations.

Before engaging with a lending app, scrutinise its compliance by reviewing its website. Look for mentions of Banks or Non-Banking Financial Companies (NBFCs) which are lending partners of the app. According to the RBI, loan apps should either be a Regulated Entity (RE) with a Bank/NBFC licence or be partnered with at least one.

To minimise the risk of downloading counterfeit apps, always download lending apps only from official app stores like Google Play Store or Apple App Store. Avoid downloading apps from web links sent via SMS, email, or social media, even if shared by acquaintances.

Also Read: Fake loan apps: What should investors do to protect themselves from these frivolous lending apps? Legitimate lending apps always require you to complete Know Your Customer (KYC) process to verify user identity and prevent fraud. KYC verification processes enhance security and compliance with regulatory standards.

Be wary of apps that circumvent the KYC process, as they could be untrustworthy. While going through a detailed KYC process might seem tedious, it's crucial to be patient as it helps safeguard your financial information. A legitimate lending app will always provide you with a comprehensive loan