4 Steps Every Borrower Should Take To Secure The Loan And Credit Data

With the rise of digital lending platforms throughout India, borrowing money has never been quicker and easier. However, with convenience comes risk unauthorized access, data misuse, and cyber fraud are becoming increasingly common. Along with this dramatic shift we are witnessing in digital lending practices, we are also confronted with a rise in data compromises, cyber fraud, and misuse of personal data.

As borrowers go online to secure loans, borrowers need to recognize the urgency of protecting any financial and credit data. In this rapidly changing environment, a few simple precautions can lead to a safe financial borrowing experience.

Manish Kumar Goyal, Chairman and Managing Director of Finkeda, states, "The process of borrowing should always begin with self-reflection. All borrowers should begin with a thorough self-reflection, examine eligibility closely, check their credit score, and only borrow what they can easily pay back."

He explained that, ideally, EMIs should be below 10 - 15 % of your net monthly income, and all total debt obligations should be below 40 - 50 % of your total income.

Borrowers should find lenders that have digital processes and 'minimal' paperwork. Digitize your app wherever you can, and lessen the emailing back and forth. Additionally, he suggests not accepting the first loan offer.

Be a smart shopper - compare interest rates, check pre-payment penalties, and consider refinancing or paying using auto-payment. Lastly, after your loan is approved, you still must maintain discipline in timely repayments and routinely check up on your credit score.

According to Sarika Shetty CEO and Co-founder, RentenPe, the proactive digital defences are as important as the actual financial planning. She advises, "Make sure you are watching your credit reports through reliable bureaus. Look out for errors, unauthorized activity or information that is outdated that could potentially change your score or deter you from being eligible for a loan."

She also suggests borrowers set up two-factor authentication (2FA) on their financial/banking platforms as an additional measure of security.

Shetty strongly recommends not using unsecured internet sources, such as public Wi-Fi, when accessing sensitive loan/banking apps. You wouldn't read your bank statement out loud in a crowded stadium- so why access it over a public network?.

Another significant area of concern is the permissions for the apps. Be diligent about the permissions you grant for data sharing. Loan apps may ask for permission to access contacts, photos, or messages, and always deny access to anything not necessary, warning that excessive sharing could lead to threatened or unnecessary aggressive recovery tactics.

Rajul Bhargava is an insurance expert who has been a part of the Indian market for over 20 years. He stresses that the need to protect personal identity details has only grown. "Streamlining your Aadhaar and PAN details is key", he states. He notes that the rise in digital lending platforms means more institutions are asking for these documents; you should only share them over authenticated channels-especially those regulated by the RBI."

He also encourages borrowers to enable SMS and email alerts for all banking transactions. "As we see more UPI frauds and phishing attacks, real-time transaction alerts are vital," says Bhargava. He stresses that people need to be especially cautious when dealing with loan aggregator sites or DSA agents, who advertise instant loan approvals.

"Make sure to thoroughly check the backgrounds on the official website of the lending institution. A legitimate process might take a few minutes longer, but it saves you a ton of pain later," he clarifies.

Borrowers are exploring new-age safety nets in the form of cyber risk insurance. The coverage enhances safeguards in the case of losses to identity theft, cyber fraud, and data breaches. As cyber threats continue to proliferate, insurance offered by cyber risk policies could be the optimal safety net for many Indian consumers who do not yet realize.

Borrowing in India is rapidly changing. On the one hand, fintech has democratized access to lending, but with infinite access also comes infinite responsibility. Data protection has become a personal responsibility for individuals, whether determining the ability to repay, monitoring credit health, remaining vigilant in the digital space, etc.

Your financial data is your economic Aadhaar - protected with as much care as you protect your family's safety. By being aware, borrowers today can protect more than just loans but also their long-term financial health.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor GoodReturns. The author, nor the brokerage firm nor GoodReturns would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.