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While taking loans, it is important to choose a genuine digital lender and not fall for fake apps.
While taking loans, it is important to choose a genuine digital lender and not fall for fake apps. The consequences of unscrupulous practices of few illegitimate lending apps have called for educating oneself enough to be able to distinguish a genuine digital lender from the illegal counterparts.
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Here are the most significant things to consider while identifying genuine digital lenders (Compiled by Madhusudan Ekambaram, Co-Founder & CEO, KreditBee and Co-Founder, FACE):
Check how transparent they are in terms of rates, charges and tenure
Interest rates decided by lending institutions are based upon their risk policies. A borrower should heed to the digital lender’s compliance with the RBI guidelines, including the legitimacy of the NBFC that is backing the lending platform.
Further, customers should see that the lender has disclosed all the charges explicitly in the app flow, and has also categorically communicated in the sanction letter with a proper break-up.
The ideal tenure of a short-term personal loan should be anywhere between 2 to 6 months.
Check if they abide by google play store norms
Google’s terms and services dictate that the apps providing financial services must comply with state and local regulations for any region or country. As per Google Play Store Policy, any app that is listed as a fintech lending platform should not have a minimum repayment tenure of less than 61 days.
Check for coercive collections techniques
The collection stage is a significant lender-borrower engagement phase and hence customers should check if they are being made aware of the lender’s bid towards responsible collection techniques.
Legitimate lenders ensure that the recovery agents act under the purview of the Fair Practices Code and hence facilitate regular training.
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