In India a large number of customers apply for Personal loans. Personal loan is a need based product and at times customer need it urgently or need a very large amount. Banks hire outsourcing marketing companies to market and source personal loan customers. 80% of the banks personal loan are sold through marketing or so called DSA channel. The rest 20% is contributed by direct bank sales team etc. There are large set of customers who get attracted by personal loan frauds or scams and DUPED by so called agents or dsa while taking a personal loan.
A customer should protect itself in followings ways to avoid from such personal loan frauds:-
- Never pay any cash or fee to get personal loan– A customer should never pay any bank person or dsa person who promise to get them loan sanctioned. No bank charges processing fee upfront and the processing fee charged by bank is deducted in your loan sanctioned amount and is not paid upfront. Any person who ask for a fee for a getting a personal loan sanctioned from the consumer is misguiding him and most likely will run with that money and loan will never get sanctioned. Customers must understand banks pay these agents for loan disbursal’s and hence these agents shouldn’t charge anything from the customer. Any customer paying anything to the agent to get a personal loan is most times a fraud run by few people. If a person ask you for a upfront fee, report that case to that bank.
- Never apply in multiple banks at one time– Most of the agents act as DSA of all banks and try to persuade customers to apply for multiple banks. Please do not do that activity. While applying for a personal loan in multiple banks your cibil record gets effected as most banks create an inquiry to the cibil while you apply for a loan and more banks reject your application if there are multiple inquiries, then Banks may rejects your application by seeing you desperate for credit if you have applied for more than 2-3 times. And it hurts your cibil score badly. While applying for 2-3 banks these agents can use your documents for other things so only give one set of documents and while giving documents- you can write on those documents that these documents are only for personal loan application in the bank you opted for.
- Check your EMI rather than Rate– Bank agents often let you know lower rate of interest but at times EMI is really high. Before you finalize the loan- check from LoanUncle’s emi calculator at that emi offered to you is matching the rate of interest. Agents at time sell these personal loans at fixed interest rates where as personal loans are sold at reducing interest rates so check your emi with comparison to your rate.
- Check id proof of the person you give documents for your personal loan- Ensure you check the authenticity of your agent whether he is from the bank or the agency and that agency is listed with the bank. Please ensure the above following steps to prevent yourself from personal loan frauds.
- Read the agreement before you sign it– Once your personal loan is approved, read all the agreement fully and then sign it.