Why You Should Avoid These 600 Illegal Loan Apps on the List
Are you in need of a loan but don’t have the necessary documentation and credit score to secure one from traditional financial institutions? You might be tempted to turn to one of the hundreds of loan apps that are available for download on your smartphone. However, be wary of the legal status of these loan apps.
Recently, India’s Ministry of Electronics and Information Technology (MeitY) released a list of 600 loan apps that are illegal and not registered with the Registrar of Companies (RoC). In other words, the operations of these loan apps are illegal and not recognized by the government.
The Dangers of Loan Apps on the List
One might think that a simple download and registration on one of these loan apps could solve their financial woes in a jiffy. However, using loan apps on the list comes with a lot of risks.
Firstly, the terms and conditions of these loan apps are often predatory, with high-interest rates and hidden charges that can put the borrower into deeper financial trouble. Secondly, the apps often require access to the borrower’s personal information, which can be misused for various purposes such as identity theft or fraud.
Moreover, these illegal loan apps often resort to coercive tactics such as constant calls and messages, threats, harassment, and public shaming to recover the loan amount. Victims of these practices have reported being humiliated and traumatized due to the intense pressure exerted on them.
Legal Measures Being Taken
The Reserve Bank of India (RBI) and other government bodies are taking steps to curb the menace of illegal loan apps. In December 2020, the RBI set up a working group to study the scope and feasibility of introducing a digital lending platform for the enabling of responsible access to credit by leveraging technology.
Moreover, the government has also proposed comprehensive legislation to regulate digital lending practices and provide a framework for the registration of digital lenders. The proposed legislation includes provisions for the protection of borrower data, maximum interest rates, and a proper dispute resolution mechanism.
Conclusion
In conclusion, it is essential to exercise caution while downloading and availing the services of loan apps. If you do need a loan, make sure you research the app thoroughly and check its legal status before signing up. It is also a good idea to compare the terms and conditions of several loan apps before settling on one.
Remember, your financial security and privacy are valuable, and it is essential to be vigilant of all financial transactions. Stay informed, and stay safe!
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