Personal Loans: What are the risks of borrowing money through digital lending apps?
Personal loans: To navigate digital lending safely, borrowers must understand their rights, repayment terms, and the risks involved. Familiarity with loan terms helps prevent exploitation by lenders, while access to customer support ensures issues can be addressed promptly.
Borrowing money i.e., personal loan through digital applications can expose aspirational borrowers to various risks. These include high interest rates, hidden facts, aggressive recollection practices, cheating, harassment of all forms etc.
Many borrowers generally don't fully understand the terms and conditions of their personal loans, leading to the possibility of exploitation by lenders.
It is important for aspirational borrowers to clearly understand terms like creditworthiness, credit score, personal loan, personal loan EMIs, personal loan eligibility, interest rates, lending platforms among other associated things to be termed as informed and educated digital borrowers.
What are the remedies available to borrowers using digital lending platforms?
It is important to understand the remedies and rights available to borrowers who use digital lending platforms for availing car loans, personal loans etc. This includes the right to clear and transparent information about loan terms, interest rates, flexibility in repayments, any other fees involved.
Further, borrowers should be informed about their repayment schedule and have the platform to raise disputes, doubts and seek help by a designated customer support system for any inquiries or issues.
What are the steps borrowers can take to protect themselves from exploitation?
To guard themselves from exploitation, borrowers should:
- Research lenders: Before applying for any loan carefully verify the lending application. Check out the reviews, ratings, customer support system and related issues to get a feel of the application.
- Read terms and conditions carefully: Before agreeing on any loan consider reading the terms and conditions carefully. Ask if in doubt. Consult a financial professional if doubts persist. Understand that all fees, repayment terms, interest rates are clearly defined.
- Avoid unlicensed lenders: Only borrow from licensed and regulated lenders to ensure proper compliance with legal standards. For the same visit websites of rating agencies. Check out the background of the lender.
- Understand repayment terms: Please be aware of the repayment terms and conditions. Clearly also understand the late payment penalties, dispute jurisdiction, dispute redressal mechanisms etc. All this is important to avoid any unexpected charges.
- Promptly seek help if needed: If you are facing harassment or unfair trade practices from lenders don't give in easily. Consider reaching out to the law enforcement agencies to resolve the issue. Consult a legal professional to understand your rights.
It is extremely important to be informed of one's rights, obligations and duties. Further some of the leading lending platforms in India are Bajaj Finance, Jio Finance, Chola Invest, Muthoot Finance, Shriram Finance among others.
Therefore, if a borrower is aware of these simple concepts then he or she will be able to navigate the digital lending landscape in a better manner. This way even the chance of falling into a trap or for predatory digital lending scams can be avoided.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
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