Loan interest

25 Report on Interest Charged by Instant Loan Apps

A report by Local Circles, a community-oriented social media platform, said that over the past two years, 58% of Indians, or possibly their relatives or household staff, who have taken out loans using instant loan apps paid 25 percent. cent annual interest.

The revelations made by the company said that over the past two years, more than 27,500 citizens have settled in 409 districts of India, and around 14% of them have used the apps. Of these, 58% said a member of their household staff had taken the loan since 2020 and had been charged with 25% annual interest.

In addition, 54% of them indicated that during the collection process, the data of their family or household staff was misused or extorted.

Typically, instant loan apps charge 30-60% interest on loans between Rs 3000-5000 depending on the down payment of the consumer. There are different interest rates depending on the loan amount and the repayment term.

According to the report, most instant loan apps were developed during the pandemic period when people were unemployed.

Some apps have been reported to charge 400-500% interest amid the pandemic.

Governor Shaktikanta Das said on June 9 that in the near future, the Reserve Bank of India (RBI) will announce a regulatory framework for digital lending platforms which are unlicensed and illegal.

In recent times, some digital lending app operators have been harassing borrowers which has led to suicide cases.

The governor informed the people that most of the apps that offer digital loans are not even registered with the central bank and are managed by their owners. The RBI is required to take action against the illegal lending platforms involved in malfeasance.

According to the RBI report, the maximum number of complaints come from Karnataka, Delhi, Haryana, Telangana, Andhra Pradesh, Uttar Pradesh, West Bengal, Tamil Nadu and Gujarat.

After receiving hundreds of complaints regarding harassment and threats from payback loan officers, the Maharashtra Police Cybercrime Team contacted the Google Play Store and demanded that they remove the 69 loan apps.