Legal information notice: this article provides general information and isn't a substitute for advice from a qualified lawyer.
“Congratulations — your ₹5 lakh personal loan is approved. Pay ₹4,500 as a processing fee to release it.” Then comes a “GST” charge, an “insurance premium”, a “CIBIL clearance” fee — and the loan never arrives. The fake loan approval scam is an advance-fee fraud: the borrower pays repeatedly for a loan that does not exist. The RBI has been warning about exactly this pattern for years.
The RBI has repeatedly cautioned the public about fictitious offers made by unscrupulous elements — fake letterheads, emails impersonating RBI staff, and promises of cheap funds. In these schemes, the fraudsters first ask victims to deposit small sums as processing fees, transaction fees, tax clearance charges, conversion charges or clearing fees into a specified bank account. The RBI has also warned about fake finance companies that offer loans, collect sizeable processing fees, and vanish. It has stated that it never contacts the public asking for money or personal information and does not give funds to individuals.
A genuine lender does not require repeated payments to personal accounts before releasing a loan.
Keep the “sanction letter”, messages, call logs, the website or app name, and every payment receipt with the UPI ID or account number.
Give the bank the transaction details and ask it to block further debits and flag the receiving account.
Use cybercrime.gov.in or call 1930, attaching all evidence.
The RBI’s Sachet portal accepts complaints about unauthorised lending entities.
If you shared your Aadhaar, PAN or bank details, monitor your accounts and credit report, and read our guides on identity and Aadhaar misuse. Documents shared for a “loan” are sometimes used to take loans in your name.
| Genuine Lender | Scam |
|---|---|
| Bank or registered NBFC; app listed where applicable | No verifiable registration, or a cloned name |
| Charges shown in a Key Fact Statement before you accept | New 'fees' demanded one after another |
| Disbursal directly to your bank account | Asks you to pay first to a personal UPI ID |
| Assessment of your application and documents | Instant 'guaranteed' approval with no checks |
No. Reporting to your bank, the cyber crime portal and Sachet is free.
Yes. A lawyer can help if you lost a large amount, if documents were misused, or if you want to pursue recovery.
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Find a Lawyer on VidyodaySee related guides on loan app blackmail, Aadhaar used to take a loan, and fake KYC scams.
Charges of a genuine lender are disclosed upfront in the Key Fact Statement. Repeated fees to personal accounts before disbursal are the classic sign of a fake loan offer.
Confirm that it is a bank or an RBI-registered NBFC and, for apps, check RBI’s directory of digital lending apps of regulated lenders.
Under RBI’s digital lending rules, disbursal goes directly into the borrower’s bank account and repayment goes back directly to the lender.
It depends on how quickly you report and whether receiving accounts can be frozen. Recovery is not guaranteed.
No. The RBI has said it does not contact the public asking for money or personal details, and does not give funds to individuals.
Monitor your accounts and credit report, and follow the steps in our identity-misuse guides.
This article is for general information only and does not constitute legal or financial advice. Verify any lender independently before sharing documents or paying any fee.
