by Buumba Chimbulu
RIGHT now, getting a personal loan has become much easier than ever before with the convenience offered by instant loan apps.
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Instant personal loans are a type of loan that can provide flexible financing to consumers who need to access money quickly.
Money loaning apps and cash advance apps offer fast funding times with minimal fees.
Some even provide additional financial management resources like checking accounts, automatic overdraft protection and budgeting tools.
But while this sounds all fun and quick, there are risks to it that every borrower should look out for as they apply.
Before venturing into the realm of personal loans through instant loan apps, it is important to understand the associated risks.
These platforms have made loans more accessible, but they have also opened the door to fraudulent activities.
A lack of regulation and oversight can sometimes make it easier for malicious actors to trick unsuspecting borrowers.
A quick search on google play store reveals tens of apps that promise funds the same day, within five to 10 minutes, or even, instantly.
While innovation in lending practices has enabled that to a certain extent, it is prudent to understand if the app or service is from a legitimate company.
If you need a little extra cash to tide you over until payday, these apps could help.
However, with so many options available, it can be tough to know which app is legitimate.
To protect yourself from being a victim of fraudulent activities associated with these apps, it is important to understand the associated risks.
The biggest red flag is not having a website. If an app does not have a website, stop right there.
Legitimate instant loan apps will usually have various security measures in place to protect users’ data, in this case, the borrower.
Before proceeding, make sure that the app has an SSL certificate and follows the latest encryption methods.
You can usually check this information in the app description or by searching online.
Be mindful of the kind of permissions you give on your phone to any app. Be careful not to approve permissions for personal data such as pictures, contact addresses and details.
If the lender asks you too many irrelevant questions about your personal details instead of financial details, then know that there is something not right with the lender.
Also, avoid non-verified lending apps since the rising use of technology has resulted in an increase in cyber-crime related to borrowing.
Non-verified digital lending apps that seek for personal information such as bank account numbers, credit card PINs, or addresses should be avoided.
You should also look for more than just lower interest rates. Apart from interest rates, there are other additional factors to consider.
You should avoid apps that have a lot of pre-payment fees, processing fees, or pre-closure fees.
There are many illegitimate apps on the App Store and Play Store.
Fortunately, they can be identified through multiple negative reviews, a low number of downloads, and the lack of a “verified” badge.
Fraudulent loan apps have wreaked havoc in people’s lives. From shaming to abuse, to harassment, these fraud apps have become a double-edged sword.
Fake loan apps exploit the simple needy person and extort money after lending it to them.
FinTechs are helping to create awareness about crime, and related harassment and educating borrowers so that they can avoid becoming victims of this menace.
The last two years saw a massive boost in digitilisation, which helped a lot of industries and sectors evolve and transform their way of operation.
FinTech was one such sector that grew exponentially during this time.
The financial crunch along with the ease and flexibility of the FinTech sector and mobile apps, saw a lot of people turn towards mobile loan apps.
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