The Fintech platform may carry a borrower, but the borrower is also responsible-take a loan for repayment, check the parties to the loan contract, and be very careful about the data you are sharing.
Fintech lenders, who are being scrutinized for recovery fraud, are facing difficult times. There have been many reports of harassing borrowers. But there is another side to it. What if the borrower doesn't knowingly return the money?
"The racket is happening in a remote village, approaching the villagers and letting them borrow money from FinTech startups. They guarantee they don't have to return the money. FinTech startups There is no way to collect small tickets. Large loans from remote locations. Therefore, there are also deliberate defaulters. " The CEO of NBFC said in response to an anonymous request.
This is the other side of the coin. If a collection agent is harassing consumers with a loan collection, the borrower is taking advantage of the simple money they have available. "Sure, some of us have bad apples. But the borrower needs to be more careful. We need to make sure that we are borrowing money from the fintech associated with the regulated entity. The details of the KYC that the RBI registered entity fills out and provides with the loan agreement are important. There must be something wrong with its source to make money right away, "said Anuj Kacker, co-founder of MoneyTap. Says.
Be careful what you share
Industry experts say the mortgage collection problem has been around for a long time. The difference this time is an additional layer of data privacy. "The borrower needs to know how much data they need to share. Some apps aren't compliant. They demand more than 30-35 permissions and customers tell them all. I tend to answer "yes". During the pandemic, those desperately in need of money used these apps to extract data and use it against them, "said Satyam Kumar, CEO, and co-founder of LoanTap.
In fact, Amit Das, CEO, and co-founder of Think360.ai, the parent company of alternative credit scoring company Algo360, has confirmed that it receives requests for raw customer data from FinTech lenders. “If you have access to SMS data, check only the bank messages that give you a sense of payroll credit and debit. Don't touch your personal messages. Most importantly, store your data anonymously. So tell me what you can do. Don't do it, "he says.
Das suggests that the borrower rejects most of the requests the app makes. “The apps absolutely need very few permissions to work. If you deny other permissions, the app will continue to work,” he says.
Interest rates and other charges
People who live from salary to salary can dry out in the last few days of the month. Taking advantage of poor borrowers, some malicious players offer them payday loans. Such loans are offered at about 1% per day, for a short period of time, for example, a week. At first glance, interest rates seem cheap, but they are not on an annual basis. They also charge high late fees. "Loans offered in less than 30 days are aimed at exploiting consumer urgency and vulnerability. They usually charge high delinquency fees as well as very high-interest rates. Consumer well-being. Is not a priority, "said the Digital Lenders Association. India of notes.
"As the old moneylender, if the loan app's processing / prepaid fees are very high, for example, the approved loan amount is 5,000 rupees, but the actual payment is 4,000 rupees, which should be a danger signal. "I add.
There may have been a fintech platform to carry the borrower, but the borrower is also responsible. Take a loan for repayment, check the parties to the loan agreement, and be very careful about the data you are sharing. “A simple Google search will tell you if an entity registered with RBI is involved in the lending process,” says Kacker of MoneyTap.
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