How to Check If a Personal Loan App Can Be Trusted

Many small mobile application based startups are now offering loans within minutes, and with zero documentation.

Money lending mobile applications charge high rates of interest. Image used for representation.

(Photo: The Quint)

Getting personal loans from authorised banks might require a lot of paperwork and considerable amount of time. However, many small mobile application-based startups are now offering loans within minutes and without any documentation.

This means that you can get instant cash worth lakhs within minutes. But, these money lending mobile applications charge high rates of interest, and cannot be completely trusted as legitimate lenders.

Here’s why.

Recently, Google removed about 100 personal loan apps violating its users’ safety. These apps were allegedly charging higher interest rates, collecting personal data and misusing them for unlawful practices.

So, If you’re looking to borrow money from instant mobile apps, the best practice would be to verify these apps firsthand.

Verify Your Lender

Before applying for a loan, run a quick Google search to see if the company is registered with RBI or not. Companies that are regulated by RBI are forced to follow regulatory guidelines, and have a strict code of conduct. If a lender application is not approved by RBI, chances are it will not be bound to any privacy policies.

Website Verification

If the mobile-based loan app does not have a website, do not trust such applications. Even if you find the website listed, always check for ‘https’ in the url. A reliable lender will always make sure that the connection to their website is secure and shield its identity from cyber criminals who steal data.

Check for Physical Address

Every lender should have a registered physical address, a phone number and an email address as well. In case you do not find any of these details, it is a red flag and chances are this is a fraudulent loan app.

Rate of Interest

Always check for rates of interest, and late fee structure before applying for any loans. If in any case, the lender shows lack of transparency in loan interest amount and approves loan without verification of your credit scores, it is most likely a scam.

Check for Online Reviews

Search for reviews of the company on Google Play Store so you can familiarise yourself with what you’re getting into. Look for trusted websites and check their review of the application.

Use Trusted Apps

Here we have listed the best apps for instant personal loans:

• KreditBee is a widely trusted personal loan platform which can be used by salaried professionals to avail loans. Personal loan up to Rs 2 lakh can be availed with an interest rate of 0-2.59 percent per month. Repayment tenure ranges from 62 days to 15 months. The application currently has 10 million plus downloads and has garnered 4 star rating on Google Play Store.
• Early Salary mobile application enables its users to borrow instant cash up to Rs 5 lakh. Personal loans can be available at an interest starting from 0-4 percent. The mobile application also allows its users to take advance salary loans starting from Rs 6 per day. The app has a Google rating of 4.5 stars on Google Play store.