In this guide
Updated: 30 October 2026
People with a low CIBIL score are the favourite target of loan fraudsters. The fraudster knows you have been rejected, you need money fast, and you will be relieved to hear "your loan is approved". This guide explains the most common loan frauds in India, the warning signs, and exactly what to do if you have already paid.
Quick answer: No genuine lender asks you to pay anything before your loan is disbursed. If someone calls or messages with a pre-approved loan and asks for a "processing", "GST", "insurance", "stamp duty" or "file" charge first, it is a fraud. Never share OTPs, UPI PINs or passwords. If you have paid, call the cyber crime helpline 1930 immediately and file a complaint at cybercrime.gov.in.
Common loan frauds
| Fraud | How it works |
|---|---|
| Advance fee scam | "Loan approved, pay a small fee to release it." After payment, more fees, then no loan. |
| Fake approval letter | A letter with a bank's or NBFC's logo, sent on WhatsApp, asking for a fee. |
| Fake loan app | App collects your documents and contacts, then demands money or harasses you. |
| Fake "agent" or "DSA" | Someone claiming to work for a big lender takes cash for "guaranteed approval". |
| OTP / screen-share scam | "Share the OTP to verify" or "install this app" gives them access to your bank account. |
| CIBIL "repair" scam | Promise to "delete" a default for a fee. No one can remove correct information. |
10 warning signs
- Any payment requested before the loan is disbursed
- "Guaranteed approval" without checking income
- Payment to a personal UPI ID or someone's personal account
- Pressure to decide "today only"
- No lender name, or a lender you cannot find
- Communication only on WhatsApp or Telegram
- Approval letter with spelling mistakes or a free email ID
- Request for OTPs, UPI PIN or remote-access apps
- An interest rate far lower than anywhere else for a low score
- App asking to read your contacts or photo gallery
How to check a lender before you share anything
- Find the name of the bank or NBFC that will actually give the loan.
- Check that the NBFC is registered with the RBI, and check loan apps on the RBI's list of digital lending apps.
- Call the lender on the number on its official website, not the number that called you.
- Read the Key Fact Statement before you accept any offer.
More: loan apps for CIBIL defaulters: safe vs fake and RBI digital lending guidelines.
Already paid a fraudster? Do this now
- Call 1930, the national cyber crime helpline, as soon as possible. Quick reporting gives the best chance of stopping the money.
- File a complaint at cybercrime.gov.in with screenshots, numbers and transaction IDs.
- Inform your bank and ask them to raise a fraud dispute for the transaction.
- Do not pay again, even if they promise a refund after "one more fee".
- If documents were shared, watch your credit report for loans you did not take.
- For an unregistered lender, you can also report on the RBI's Sachet portal (sachet.rbi.org.in).
How Indifunds works
Indifunds is a loan facilitator in Noida that works with lending partners. We never collect any fee before approval. All charges are explained before disbursal, and the money goes directly to your own bank account after the loan agreement is signed. Our official number is on our website; if anyone asks you for money in Indifunds' name before your loan is approved, do not pay and contact us. See our responsible lending page.
Frequently asked questions
Is a processing fee before loan approval genuine?
No. Genuine lenders deduct any processing fee from the loan amount at disbursal, as shown in the Key Fact Statement. They do not ask you to pay first.
How can I check if a loan company is real?
Check that the lender is a bank or an RBI-registered NBFC, call it on the number from its official website, and check apps on the RBI's list of digital lending apps.
Can I get my money back after a loan fraud?
Sometimes, if you report quickly. Call 1930 at once, file a complaint at cybercrime.gov.in and inform your bank.
Can someone remove a default from my CIBIL report for a fee?
No. Correct information cannot be removed. Only genuine errors can be corrected through a dispute with the credit bureau, which is free.
What should I do if a loan app threatens me?
Do not pay extra money. Keep screenshots, report on cybercrime.gov.in or call 1930, and inform the police in writing.
Check your loan eligibility
Salaried in Delhi NCR? Low CIBIL score or a past rejection? Our team will assess your profile.
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