The following are the reasons to take loans only from RBI registered NBFCs and Banks:
1. Regulation and Oversight
Loans from RBI registered NBFCs and banks are regulated and overseen by the Reserve Bank of India (RBI). This means that they are subject to strict guidelines and regulations that help protect consumers from predatory lending practices.
RBI registered NBFCs and banks are required to be transparent in their lending practices. This includes disclosing interest rates, fees, and other terms and conditions of the loan. This helps borrowers make an informed decision and understand the loan process better.
3. Legal Protection
When you take out a loan from an RBI registered NBFCs and bank, you have legal protection in case of any disputes. You can seek legal recourse if you feel that you have been taken advantage of by the lender.
4. Credit Reporting
RBI registered NBFCs and banks report to credit bureaus and this can help you improve your credit score. This can be beneficial for you in future when you plan to take other loans or credit.
Some RBI registered NBFCs and banks offer insurance for the loan, which can provide added protection for the borrower in case of an unforeseen event such as death or disability.
RBI registered NBFCs and banks are known and established entities in the financial market. They have a reputation to maintain and so they are more likely to have a transparent process and follow ethical lending practices.
7. Better Customer Service
RBI registered NBFCs and banks are more likely to have better customer service as they are established entities and have a reputation to maintain. They are more likely to have dedicated customer service teams that can assist you throughout the loan process.
Taking out loans from RBI registered NBFCs and banks can offer several advantages over other types of lenders. They are subject to strict regulations, have to follow transparent processes, provide legal protection, report to credit bureaus, offer insurance for the loan, have a good reputation, and have better customer service teams. This can provide added peace of mind and protection for borrowers.
Common Mobile Loan App Scams and Tips on avoid them
- Phishing scams: Some mobile loan apps may send fraudulent messages or emails that appear to be from a legitimate lender, but are actually designed to steal personal and financial information. These scams often ask for sensitive information, such as credit card numbers, online banking credentials, or social security numbers.
- Advance fee scams: Some mobile loan apps may require borrowers to pay an advance fee before they can receive the loan, but then disappear with the fee and never provide the loan.
- Unauthorized charges: Some mobile loan apps may charge fees or interest rates that are not disclosed upfront, or may automatically renew the loan, resulting in additional fees and interest.
- Illegal lending: Some mobile loan apps may not be registered with the Reserve Bank of India (RBI) as Non-Banking Financial Companies (NBFCs) and may not be legally allowed to lend money in India.
To avoid Mobile Loan App Scams
- Do your research: Research the mobile loan app and the lender thoroughly before applying.
- Verify the lender’s registration: Check if the lender is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC)
- Be wary of unsolicited offers: Be skeptical of unsolicited offers, especially those that require you to provide sensitive personal or financial information.
- Carefully read the terms and conditions: Carefully read the terms and conditions of the loan before accepting the offer, and make sure you understand all the fees, interest rates, and repayment terms.
- Report any suspicious activity: Report any suspicious activity to the relevant authorities.
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