Are you planning to apply for a loan?
Beware of fraudsters asking for advance payments before approving your loan!
In this blog, we’ll explain why asking for upfront money is a red flag and how genuine lenders actually work.
Stay alert. Stay safe. Let’s dive in!
Why Do Scammers Ask for Advance Payment?
Fraudsters promise instant loan approvals and low interest rates to trap you.
Then, they demand an advance fee under names like:
- Processing charges
- File opening charges
- Insurance fees
- Verification costs
Once you pay, they disappear — and you lose your hard-earned money.
🚫 Important:
No genuine bank, NBFC, or fintech app asks for advance payments before approving or disbursing a loan.
Is Asking for Advance Payment Legal?
❌ NO.
As per banking policies and RBI guidelines, collecting money before loan approval is illegal.
The processing fees or any other charges are deducted directly from your loan disbursal amount, after your loan gets sanctioned.
How to Identify a Loan Scam?
Here are clear warning signs of a fake lender:
🔹 They don’t have an official website or use free email IDs like Gmail/Yahoo.
🔹 They operate through personal WhatsApp numbers.
🔹 They offer guaranteed loans without checking your CIBIL score or income proof.
🔹 They pressure you to pay upfront to “secure” the loan.
🔹 They refuse to meet in person or provide proper documentation.
Tip: Always check if the lender is registered with RBI (you can verify this at rbi.org.in).
What Should You Do If Someone Asks for Advance Money?
👉 Say NO immediately.
👉 Report the scam to your nearest police station or the cybercrime portal.
👉 Apply only through verified banks/NBFCs.
👉 Consult trusted financial advisors like Shivafinz before making any move.
Conclusion
If anyone asks for an advance payment promising a loan, it’s almost certainly a scam.
Stay informed and never pay upfront!
Only trust verified lenders and always check their credentials before applying.
Stay Connected with Shivafinz
For more financial safety tips, loan advice, and RBI updates,
👉 Follow Shivafinz — your trusted guide for safe borrowing and smart money moves!
✅ Stay Safe. Stay Smart. Happy Lending!