The rising cost of living has greatly intensified daily stress for many, leading people to turn to Personal Loans as a way to manage financial strain during emergencies. Instant loan apps have become popular platforms for conveniently applying for Personal Loans, allowing you to secure funds within hours. However, these applications require extensive details about your identity, financial status, employment, and credit history.
Are you worried about the security issue when downloading an app? Ensure you do not fall prey to a fake loan app. Verify the app’s authenticity and the provider’s privacy policy to avoid dealing with a fraudulent loan company. Read on to find more details.
Types of Data That Loan Apps Collect
An online loan app requires data to control risk, evaluate your worthiness, and ensure regulatory compliance. The different types of data it needs include the following:
- Financial Data: Lenders need information about your income, credit history, bank statements, tax returns, and existing debts to evaluate your lending risk. This data helps them determine your loan amount, interest rate, and other terms and conditions.
- Personal Data: Lending institutions require personal data to check your eligibility and mitigate the risk of fraud and identity theft. This data includes your full name, date of birth, address, employment information, contact details, etc.
- Transactional Data: The lender builds your borrower profile based on your transactional data, which they use to assess your lending risk and determine your loan offering. Typical data they gather include your payment history, bank account activity, loan applications, and purchase patterns.
Significance of Data Protection in an Online Loan App
Data protection in an online loan app is important, as it safeguards your personal and sensitive information and maintains confidence and trust. Factors highlighting the significance of data protection include the following:
- Protection Against Fraud and Identity Theft: An instant loan app handles vast amounts of financial and personal data, making it an attractive target for cybercrime. Sensitive information like your bank account details, credit history, and PAN number can get exposed to fraudulent activities and identity theft.
- Consumer Trust and Confidence: Trust is the cornerstone of any relationship, especially in the lending industry. You must feel safe when sharing your personal and financial data on a digital lending platform.
- Regulatory Compliance: The loan app you choose must follow its regional data protection laws when collecting, processing, and storing customers’ data.
- Financial Risk Mitigation: A data breach can lead to considerable economic loss for the lending platform, including regulatory fines, legal fees, compensation, and remedial measures. Moreover, it exposes your data to cybercrime and potential fraud.
- Operational Efficiency: Secure data handling practices streamline the loan application procedure, reducing the risk of fraud and errors. They also enhance credit assessment accuracy, leading to better customer service, faster loan processing, and a seamless user experience.
- Ethical Data Usage: When you share your personal and financial information with the loan app, you expect them to handle it responsibly and use it for legitimate purposes only. Highly ethical data protection standards ensure your privacy.
Privacy Concerns When Borrowing Through a Loan App
Digital lending platforms require access to your personal and financial information. Here are a few privacy concerns when borrowing through an online loan app:
- Manner and Extent of Data Collection: One primary concern about privacy is the manner and extent to which the app collects and shares your data. The app you choose should securely collect and store your data and follow regulations about who can access and use it.
- Data Sharing: Another privacy concern is data sharing with third parties. Lending institutions usually collaborate with several service providers to verify your identity, assess your credit, and fulfil other operational needs. The privacy risk increases each time it shares your data with a third party. You may not know how they will use your data and who accesses it, leading to unauthorised access or potential misuse.
- Data Misuse: The privacy concern also extends to potential data misuse by the personal loan app or its partners. They may use your data for purposes beyond loan application and approval. Inadequate data security measures lead to cyberattacks where criminals may exploit your sensitive data for fraudulent activities.
- Transparency and Control: You may be concerned about your level of control and transparency over your personal data. You may not be fully aware of what data you are submitting, how the lender intends to use it, and with whom they will share it.
Ensuring Data Protection with the Hero FinCorp Loan App
Protecting your data is of utmost importance when borrowing a loan through a loan app. Hero FinCorp has a robust privacy policy in place to ensure your data safety. They require the following information to evaluate your eligibility and loan plan:
- Identification Data, including your name, phone number, email address, mobile number, photograph, signature, date of birth, Aadhaar number, PAN number, gender, etc.
- Bank account and details about other payment instruments
- Other contact details and historical and demographic information
- Location, media, device, IP address, etc.
The privacy policy clearly specifies the information they collect, why they use it, and with whom they share it. Moreover, they may contact third parties to collect more information about your credit history, employment, financial relationship, legal proceedings, identification, etc.
Tips to Ensure Data Protection
Before sharing your information with an online loan app, pay attention to the following security trails to protect your data:
- To build trust, check the lender’s office address and contact details.
- Pay attention to any hidden charges they levy without informing you beforehand.
- Do not share your OTP or app password with anyone; you must keep it secure and confidential.
- When applying online, check the loan URL and ensure it has https:// in the beginning. It ensures the link is genuine and the lender takes sufficient measures to safeguard your data.
If you are looking for a trusted loan app, the app provides all the information about its privacy policy and data security measures. It is a financial services company that ensures the complete safety of your personal and financial data.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.
ThePrint BrandStand content is a paid-for, sponsored article. Journalists of ThePrint are not involved in reporting or writing it.