How To Identify a Fake Letter for a Loan Approval?

Scams involving money are very common these days. Every day, scammers come up with new  schemes to defraud innocent people. Posing as bank representatives, announcing a grand lottery, and sending out spam links are some of the common frauds that have looted many people. A fake loan approval message is another very common scam that you must be aware of. Failing to identify such fake messages and falling into the scammer’s trap has resulted in people losing a huge fortune. Read on to know how to identify a fake loan approval letter.

Tips to Identify a Fake Personal Loan Approval Letter

1. Appealing graphics

   Scammers are experts at mimicking every detail of the original letter for loan approval. The fake loan approval letter will include the company logo, the authorised person's signature, and even identical typography. At the first glance, it is very  difficult to tell whether the letter is real or fake.  So, if you receive a softcopy of a loan approval letter in the mail, contact your lender's executive right away.

2. Lucrative offers

   What compelled you to click on the loan offer letter? It is the very attractive interest rate that they are offering. Scammers typically target customers by offering a large sum of money at a low or even zero interest rate. Before you succumb to such offers, take a moment to think. According to Reserve Bank of India guidelines, no financial institution is permitted to offer any type of loan with a zero percent EMI scheme. So, next time, if you receive any such offer, immediately report it  to the cybercrime cell or the nearest police station.

3. Invalid information

   The loan approval letter includes various information that you must double-check. You will notice the company's logo, office address, contact number, email address, and authorised signatory information. When you receive such a loan offer, you must immediately cross-check the information with the company's website. If the loan approval letter is fake, then there is a high chance that you will spot incorrect information. Check the maximum loan amount the lender offers and advertises on their website. If the amount offered on your personal loan approval letter is more than that, then this is a red flag. Check for grammatical errors, printing mistakes, and slight differences in logo or font. Having an eye for detail can save you from falling into a trap.

4. Advance fee payment

   When you apply for a loan, the lender will typically charge a processing fee to cover administrative expenses. Even if the loan is not disbursed due to insufficient documentation or incorrect information on the loan application, the processing fee is non-refundable. However, if you carefully examine the fake loan approval letter, you will notice that it contains a slew of charges.  Usually, these charges are very high, or they may ask you to pay multiple charges.
    

Also Read: 6 Ways to Spot a Loan Scam

Points to Consider When Applying for a Loan Online 

Most people nowadays prefer online loans to save time and effort. Because of the shift in customer borrowing patterns, fraudsters now have more opportunities to steal your personal information and money from your bank account. Here we have listed some of the precautionary tips to follow when applying for an online loan.
 

• Review the lender's website for official addresses. Do not trust a lender who operates only in the virtual realm and does not have a brick-and-mortar office address 

• Check out the Google reviews. If people have previously used that app to obtain a loan, you will surely find their feedback online. You can also read reviews on the Play Store and App Store.

• Check if the lender is authorised by the RBI. Learn about their lending partners and see if any notable bank or NBFC names appear on the list.

• Fake lending apps typically have a simple application process. In fact, they frequently skip critical steps, such as the documentation process.

To Conclude

Loan frauds are a very common scam that you must be aware of. Knowing how to identify a fake loan approval letter from a real loan approval letter can save you from the loss of your hard-earned money. When applying for a loan, it is critical to discuss the approval and disbursement process with the lender's executive. You should also inquire about each step of the loan process. If you are aware of the process beforehand, the scammer has very little chance of defrauding you.