How do you spot and avoid fraud on loans?

Synopsis:– It’s common to fall victim to loan fraud if you’re not sufficiently vigilant. Be aware of common frauds on loans and taking steps to stay clear of them will protect the hard earned cash. Learn more about them here.

The study from a company that provides credit information, says that the most frequent instances of fraud on financial accounts in India are associated with consumer loans, and then credit cards. Of these, the most prevalent kind of crime is theft of identity. These loans frauds have led to hundreds of individuals losing their hard-earned cash.

While a variety of types of loans are offered in India the majority of frauds involving loans are centered around educational loans. This is due to them being given for students that are at the beginning of their careers.

We’ll explore it in greater detail.

Five of the most frequent frauds on education loans in India

Here are five of the most frequent scams for student loans you may encounter, and tips to be sure not to fall victim.

• Inquiring for an advance payment

You might come across an institution that offers the highest amount of loan with a low interest rate. They may also request an upfront fee to apply in order to get the loan. This is an obvious indication of fraud. Even the most well-known private lenders aren’t supposed to ask for an advance fee to provide a loan for education.

• Loan consolidation scam

If a firm offers you a new loan to consolidate your educational loan at a reasonable rate of interest, but then asks that you pay for a consolidation cost that could be loan fraud. There aren’t any consolidation options for student loans as they’re already provided at lowest rates of interest offered by lenders.

• Scam to eliminate debt

You might get a phone call from a business promising to eliminate the debt on your education loans for the cost of a small amount. Be sure to not accept such calls. They could lead to fraud on loans. Keep in mind that there’s no way to get rid of the debt unless there’s an unforeseeable event like an unexpected death for the person who borrowed. In these situations it is only the original lender that is able to take over the loan.

• Request for personal details

Sometimes, scammers pose as fake loan companies and ask you to provide your financial and personal information to enable them to disburse money. It is a way to commit an enticement to loan. The lender is not required to request information such as you credit card’s numbers, your internet banking password or PIN, or any other information.

• Aucune physical address nor contact details.

While it is common for lenders to offer loans for education online however, they need to be located in a physical location. A financial institution cannot operate without a physical location. If the lender doesn’t have a office in its premises, then it may be fraudulent. Before signing any document, verify the information of the lender. Also, ensure that the business has been registered at the Reserve Bank of India (RBI).

Also, you can read 4 facts regarding Education Loans that you may not be aware of

To conclude

There is no way to deceive you into stealing your hard-earned money if you remain vigilant when applying for a loan scheme for students. Through IDFC FIRST Bank you could get an amount of student loans that range from to Rs. 1 Crore for more than 25.000 courses in 3200+ universities. Being one of India’s most well-known banks IDFC FIRST Bank ensures the highest level of transparency in the verification process for loans. For more details, click here.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The information is general in nature and are intended for solely informational purposes. It’s not a substitute for advice specific to your specific situation. Information is subject to change or completion, revision as well as verification and modification, and could change significantly. It is not a part of any plan to distribute or use by anyone in any country where such use or distribution would be against the laws or regulations or expose IDFC FIRST Bank, or any of its subsidiaries to registration or licensing obligations. IDFC FIRST Bank cannot be held accountable for any direct or indirect risk or obligation that the user may incur by making financial decisions that are based on the content and other information provided. Consult your financial advisor prior to you make any investment decision.

The benefits, features and deals discussed in the article are in effect as of the date of publication of this blog. It is subject to change without prior notice. The information contained in this blog is subject to any other specific product conditions and terms as well as any terms and conditions that are applicable. Please refer our website www.idfcfirstbank.com for latest updates.