How to spot and avoid personal loan scams before it’s too late

Verify the lender, never pay upfront, keep your data close, and don’t let anyone rush you.

Let’s be honest: when money’s tight, a “loan in 10 minutes” ad looks tempting. That’s exactly what scammers bank on. They dress up like legit lenders, dangle low interest and instant approval, then grab your data or an upfront “fee” and vanish. The good news? A few simple checks can save you a lot of pain.

Start with the basics: who are they?

Real lenders don’t hide. Check the name on the RBI site or the lender’s official page. Look for a proper domain, a registered NBFC or bank partner, and a physical address that isn’t a random co-working space. If they want you to install an app from a link instead of an app store, that’s a no.

No legit lender wants money first

Processing fees, insurance, file charges — scammers love these words. Genuine fees are deducted from the loan amount after approval. If someone asks you to send Rs 1,999 “to unlock disbursal,” walk away. That’s the oldest trick.

Watch the way they talk to you

Banks don’t WhatsApp from personal numbers or mail from free Gmail IDs. Messages full of typos, pushy timelines, and vague promises scream fake. A real loan officer will explain the rate, tenure, APR, foreclosure rules, and EMI — not just say “best offer, hurry.”

Protect your documents and your phone

Don’t share PAN, Aadhaar, selfies, or contacts until you’ve verified the lender. Many shady apps grab your contacts and gallery, then bully you for “repayment” of loans you never took. If an app asks for camera, mic, or contact access without a reason, deny it.

Slow down the moment you feel rushed

“Offer expires in 30 minutes” is a setup. Take a breather. Read the agreement. Check the APR, not just the monthly EMI. If something feels off, it usually is. Call the bank’s official helpline you find yourself — not the one they texted.

Also read | Nearly 50% Indians use personal loans for lifestyle expenses, reveals RupeeRedee data

Do these two things if you slipped

Block your account if you paid a fee, report the handle to the platform, and file a complaint on the National Cyber Crime portal. Change passwords, enable two-factor authentication, and freeze your credit if your documents were shared. The faster you act, the less damage.

Bottom line

Easy loans are never as easy as the ad. Verify the lender, never pay upfront, keep your data close, and don’t let anyone rush you. A real loan will still be there after you’ve done your checks — a scam won’t.