😠 Ever Received a Message Saying Your Loan is Approved… But You Never Applied?
If you’ve seen SMSes like:
“₹18,500 credited to your account xxxx. Repay in 7 days or face action.”
“Congrats! Loan approved. Click to claim.”
And you’ve thought, “I didn’t apply for any loan!” — then welcome to the dark world of shady loan apps in India.
Not all loan apps are bad — but some are downright dirty with how they trick, scare, or trap users.
Back in 2022, I downloaded a quick loan app because I was short ₹6000 for rent. The app looked legit, promised “no paperwork,” and the money hit my account within 15 minutes. But what I didn’t realize is, I had just given them access to my contacts, gallery, and even my call logs.
Three days after the due date, when I couldn’t repay the full amount, my phone exploded with over 25 calls. One recovery agent threatened to message my college friends and coworkers. And they did. I received panicked texts from people I hadn’t spoken to in years.
That incident opened my eyes. I started researching loan apps, and what I found shocked me. Here are the five dirtiest tricks these apps pull—and how you can beat them at their own game.
❌ 1. Fake Approvals Followed by “KYC Issues”
The Trick: You get a notification: “Loan Approved!” But then you’re told there’s a “KYC mismatch” and you must pay a small fee to process the loan.
The Reality: There is no loan. They’re fishing for upfront charges or account details.
✅ Outsmart Tip: Never pay before disbursal. Legit apps deduct processing fees from the disbursed amount, not before.
🤔 2. Hidden Fees That Show Up After Disbursal
The Trick: You apply for ₹5000, but receive only ₹4500. Why? Because fees and GST were deducted upfront — but that wasn’t shown clearly.
The Catch: You still have to repay the full ₹5000 + interest.
✅ Outsmart Tip: Use apps that show total cost upfront. Take screenshots of all terms before applying.
🔗 Related: Why Your ₹10,000 Loan Might Cost You ₹15,000
👤 3. Contact List Blackmail
The Trick: Apps demand access to your contact list and gallery during onboarding. If you default, they send shaming messages to friends, family, even coworkers.
What I Faced: They called my cousin, messaged an ex-colleague, and even threatened legal action against my family. All over ₹7500.
✅ Outsmart Tip:
- Use apps with DLAI or RBI registration only.
- Deny gallery/contacts access if possible.
- If harassed, file a report at cybercrime.gov.in and complain to the RBI Ombudsman.
📌 Read: What to Do If a Loan App Threatens to Contact Your Friends
⚠️ 4. Debt Rolling: The Trap of New Loans to Repay Old Ones
The Trick: You can’t repay Loan A. So the app suggests taking a top-up loan or borrowing from another app to repay the first.
The Outcome: You’re stuck in a loop of borrowing, fees, and EMIs that spiral out of control.
✅ Outsmart Tip:
- Never borrow from another app to repay the first.
- Instead, request a repayment extension or partial settlement.
- Or seek help from credit counselors.
🚫 5. Threats of Police or Legal Action
The Trick: Recovery agents pretend to be lawyers or police officers. They threaten legal notices, jail, or FIRs.
Truth: Loan default is not a criminal offense. Unless fraud is involved, no police case applies.
✅ Outsmart Tip:
- Don’t panic. Take screenshots.
- Block the number and report on cybercrime.gov.in
- Lodge a complaint with Google Play if app behavior is abusive
🧠 Summary Table: Tricks & Smart Counters
| Dirty Trick | What It Looks Like | How to Outsmart It |
|---|---|---|
| Fake KYC Approval | Pay to verify KYC | Never pay before loan disbursal |
| Hidden Processing Fees | ₹5000 loan → ₹4500 credited | Use apps with upfront disclosures |
| Contacts/Gallery Blackmail | Threats to friends/family | Use RBI-approved apps only |
| Rolling Loans Trap | Take Loan B to repay Loan A | Ask for extension or partial settlement |
| Legal Threats by Call/SMS | Fake police/legal action | Document & report on cybercrime.gov.in |
✅ Final Advice: Trust But Verify
Loan apps are helpful when genuine. But never let urgency blind you. Before you download, check:
- Is the app listed under RBI’s NBFC list?
- Is the app a member of DLAI?
- Are all charges visible before approval?
- Are reviews mostly 4-star+ with genuine feedback?
Stay sharp, stay safe. You work hard for your money — don’t let a shady app steal your peace of mind.
🔗 More Resources:
Ever faced something like this, do reply in the comments so that we are all aware and it helps.