The dangers of illegal online loans are lurking, especially on unsecured online money loan offers and conditions that at first glance seem alluring.
It is not new news if there are online loan users who claim to be threatened by debt collectors or are desperate because they are in debt with interest that continues to skyrocket. There are victims of illegal online loans who are terrorized by distributing personal photos with the narrative “selling themselves” to pay off debts.
There are also other illegal online Payday Loans victims who have complained to the Legal Aid Institute because of delinquency in paying debts.
Unreasonable interest, as well as inhumane ways of collecting debt are one of the risks and dangers of illegal online loans, aka fake. Sadly, the number of illegal online loans is currently not large.
As of August this year alone, the Financial Services Authority has found and closed more than 1,000 unlicensed online loans. Unfortunately, not a few fraudulent online loans were closed by the Financial Services Authority, then reopened their services with a different name.
Most of the fake online loans offer online money loans without collateral and conditions. This means that regardless of the condition of the prospective debtor, the loan application will definitely be approved.
The ease of getting money in a short time is what makes many people think less about applying for a loan. Especially, for those who are currently having financial problems.
Without having had the chance to calculate that it is very possible that the number of installments paid was many times higher than the loan funds received, so that finally the monthly income could not cover the debt he had.
Finally, happy for a moment, miserable later.
5 Ways to avoid the dangers of online loans
You certainly don’t want to be the next victim of online loans, right? It’s actually not difficult to avoid the dangers of illegal online loans, just do the five things below before applying for a loan.
1. Check the fintech license registered with the Financial Services Authority
The key is that a trusted online loan is definitely registered and supervised by the Financial Services Authority. So, if you get a loan offer from fintech (financial technology) that doesn’t have official permission from the Financial Services Authority, leave. Even if the service has an official website and smartphone application.
How do you find out which fintech is registered with the Financial Services Authority?
To do this, visit the Financial Services Authority website and select the Public category. Then, click on News and Events and select Publications. So, on this page, the Financial Services Authority periodically announces fintech (financial technology) services that have been registered and licensed by the Financial Services Authority.
2. Check and simulate interest and loan costs
Interest and online loan fees have been agreed upon by the Joint Funding Fintech Association and through coordination with the Financial Services Authority. The goal is so that fintech does not charge arbitrary interest that can harm debtors.
Meanwhile, the amount of interest set by the AFPI is a maximum of 0.8 percent per day. Collection of fines can only be done if the late payment is a maximum of 90 days since the loan funds were disbursed.
So, if you meet or get a loan offer with an interest rate above 0.8 percent, you don’t need to think about ignoring it.
However, even if the loan interest does not exceed 0.8 percent per day, you still need to calculate the estimated cost of the loan and the total installment. That way, you know what percentage of your monthly income will be allocated to pay installments.
3. Check online loan application access permissions
The complaints of victims of illegal online loans that are also widely heard are debt collector terror to fellow borrowers, even superiors and HR at the borrower’s office.
Indeed, even official online loan services will ask for permission to access some features on the cellphone for the verification process. However, requests for device access are limited in accordance with the provisions of the Financial Services Authority, namely limited to access to camera, location, and microphone features.
Meanwhile, illegal online loans will ask for access to all of the borrower’s personal data, including messages, contacts, and call history.
Illegal online loan applications are often not distributed through official marketplaces such as the Play Store or App Store, but in the form of APKs