Amid the rising personal loan scams in India, it has become important to exercise caution and stay alert. In fact, the overall number of frauds, including those for loans, has tripled in FY2025. This makes it necessary to carry personal loan scam checks to protect yourself from financial loss.
There are different ways that scammers and fraudsters scam you. With a few simple checks, you can not only identify these scams but also protect yourself from any financial loss. In this blog, we will help you understand how you can avoid personal loan scams.
Here are the most common types of personal loan scams that take place in India:
To protect yourself from any financial loss, look for these personal loan fraud signs to identify scams:
Note: DMI Finance never asks for an upfront fee, completes all necessary verification, and the whole process is digital, easy, and secure. Click here to apply for a personal loan.
Here are the tips you can follow to carry out a detailed personal loan scam check and protect yourself against them:
Key Fact Statement in a personal loan is a document that a lender provides, which summarises the key terms of a loan. You must always ask for a key fact statement loan as it is your first line of protection against fraud. Think of it as the “report card” for your loan. Here’s what a real KFS includes:
KFS is important because scammers thrive on your private information. If the lender avoids providing the statement, it is one of the biggest personal loan fraud signs.
The funds should be transferred directly to the personal bank account you specified on the application as soon as your loan is approved. RBI mandates lenders to disburse the loan amount only into the borrower’s bank account.
You may be getting scammed if the lender promises to route the loan amount to another account or pressures you to provide different account details. Therefore, always verify your bank’s SMS or email message twice. Otherwise, kindly stop and report it.
Requesting money before the loan is approved is one of the most obvious personal loan fraud signs in any loan offer. Scammers often use terms like “file charge,” “processing fee,” “security deposit,” or even “GST payment” to trick you and add pressure to send money in advance.
A trusted and legitimate lender will never ask you to pay anything beforehand. Any processing fee or charge (if applicable) is deducted from the loan amount after distribution and not collected separately.
One of the most common tricks that scammers use to attract and scam borrowers is to offer too-good-to-be-true loan offers. These offers include instant loans, low interest rates, and guaranteed approvals without any credit checks.
Legitimate lenders do not lend without due credit and income checks. Never trust such offers and always verify them on their own or on official lender websites or through lists registered by the RBI.
If the offer seems suspicious or you have fallen victim to a personal loan scam, report it on the RBI Sachet website. It is one of the best ways to safeguard yourself from loan scams. The Reserve Bank of India created this website to allow you to investigate, confirm, and report questionable lending apps or financial institutions.
You can determine whether a lender is licensed or is officially registered with the RBI. The absence of the name in the RBI database might be a sign of fraud. Here is how you can file an RBI sachet complaint:
Although personal loan scams are becoming more common, you can protect yourself by following these guidelines: Never pay advance fees, always obtain a Key Fact Statement, and ensure that the payment is paid only to your bank account. This will help you protect yourself from financial loss.
At DMI Finance, we are an RBI-registered NBFC trusted by over 2 crore borrowers for loans. Our personal loans process itself is fully transparent and processed through DigiLocker. If you are in need of funds urgently, apply for a personal loan of up to ₹5 lakh with no hidden costs or charges.
1. How do fraudsters contact targeted borrowers for personal loans?
The majority of approaches are always made over WhatsApp, SMS, calls, or fraudulent applications. Hence, always make sure you check the numbers and only download apps.
2. Which documents should I never exchange over WhatsApp or email?
Avoid providing Aadhaar, PAN, or bank data through dubious links. You must absolutely prevent yourself from sharing OTP.
3. Can a loan be deposited into a digital wallet or a third-party account?
No, the RBI requires disbursement exclusively to the borrower’s bank account. Any other request is a fraud indicator.
4. How can I swiftly determine whether a lender is genuine?
You can confirm if the lender is genuine or not by searching for their name on the RBI Sachet site. If they are not listed, they are not allowed to lend.
5. What should I do if I mistakenly paid a fraudulent processing fee?
You must report the incident to your bank right away and submit a cybercrime complaint. Quick intervention can help prevent future misuse.
6. What are the most common personal loan scams in India?
Some of the most common personal loan scams in India are as follows:
7. How can I safely track my personal loan application?
To avoid falling victim to any scam, you must track your personal loan application through the lender’s official app, website, or confirmed hotline only.
8. What options do I have if a fraudulent loan app scams me?
Report the incident and right away to RBI Sachet, cybercrime.gov.in, and then delete the app. Additionally, scan your device for malware.
9. How does DMI Finance ensure consumer safety?
DMI Finance provides a Key Fact Statement upfront, uses DigiLocker for paperless applications, and directly transfers the loan amount to your bank account.
