These 5 Common Lies Loan Agents Tell—Don’t Fall for Them

Ever heard a loan agent say, “No problem, sir, this is 100% approved”? Sounds too good, right?

In India, where more and more people take loans—personal, home, education, car—the number of loan-related frauds is growing fast. RBI data shows that total loan frauds went up from ₹12,230 crore in FY24 to ₹36,014 crore in FY25. That’s triple in just one year.

That means you need to be a lot more careful. Because here’s the truth: many loan agents lie. And not just small lies. Some can cost you lakhs. They play on your trust, your urgency, your confusion with financial jargon. But if you know the tricks, you won’t get trapped.

1. “No documents? No problem. We’ll take care of it all.”

Let’s say you want a personal loan for ₹5,00,000. You meet an agent. He says, “Just sign here, sir. We’ll fill everything. You relax.”

Looks easy, right?

But this is how fake income proofs, fake job letters, and even forged ITRs are used. The loan gets approved. You think everything is okay. But later, the bank finds out. Now you’re under investigation.

Why is this risky?

Because if your documents are fake (even if you didn’t make them), you are legally liable.

Worse, your loan may be called back. Or you might be blacklisted from future loans..

What should you do?

Always verify documents. Ask for copies of everything the agent submits. Never sign a blank form.

2. “CIBIL score doesn’t matter. We have bank contacts.”

This is another big trap. Your CIBIL score is your financial report card. Banks use it to decide your interest rate and loan amount and even whether to lend you money.

Still, many agents say, “Don’t worry about the score. I know the manager.”

That’s usually a lie. They may try to tweak documents or apply with shady lenders.

You may get a loan, but the interest will be very high.

Two Loan Scenarios Based on CIBIL Score

Just because of a low score, you pay ₹1,24,440 extra.

Techniques to Improve Your CIBIL:

• Pay EMIs on time
• Keep credit card usage below 30%
• Don’t apply for many loans at once

3. “Zero down payment loan? It’s easy.”

This one sounds attractive. An agent tells you you can get a car, bike, or house loan with zero down payment. You just pay EMI.

It’s not impossible, but it comes at a heavy price.

• The EMI becomes very high.
• You may be paying hidden charges.
• Repossession risk is much higher.

Let’s compare:

Loan with 0% Down Payment vs. 20% Down Payment

That’s ₹2,60,880 saved if you pay 20% upfront.

Best Practice:

Never fall for “0% down payment” unless you calculate total outgo. Also, verify if it’s a secured or unsecured loan.

Read More – Loan Fraud in the Digital Age

4. “Your loan is pre-approved.”

Loan agents love this line. They say, “Sir, your profile is pre-approved. No checks needed.”

The truth is, no loan is fully approved without documents and underwriting. Even pre-approved offers are subject to verification.

Sometimes, they say this just to push their sales and get your documents. Then, they either apply with shady NBFCs or charge you fake “processing” fees.

Let’s say you’re tricked into paying:

You may not get any loan at all.

How to avoid this?

• Call the bank directly to verify if the offer is real
• Never pay upfront fees to agents
• Read every SMS, email, and document word by word

Also Read - Business Loan Scams to Watch Out for in 2025

5. “Guaranteed low-interest loan for you only.”

Everyone wants the lowest interest rate. So, agents say, “This rate is only for today, just for you.”

That’s a pressure tactic.

Banks don’t work like that. Interest is based on:

• Your credit score
• Your income
• Market rates

A fake “lowest interest” promise is often used to rush your decision.

You may later discover:

• High processing fees
• Hidden insurance bundled with the loan
• EMI is much higher than expected

See this Comparison

A lie like this can cost you over ₹2,00,000 over 5 years.

What can you do?

• Use EMI calculators from banks, not agent apps
• Ask for a full loan breakup
• Check if insurance is optional or forced

Conclusion

Taking a loan in India is not as simple as signing a few papers and waiting for the money to hit your account. It's a long-term financial decision that affects your monthly budget, credit score, and future loan eligibility. 

Loan agents may promise fast approvals, no paperwork, or even guaranteed low rates. But many of these are just sales tricks. They often don’t care if you struggle later. 

So, be smart. Don’t rush. Ask questions. Double-check everything. Read every clause before you sign. The more you know, the safer your money—and your future.

FAQs

1. Can I cancel a loan application once submitted through an agent?

Yes, but you must act fast. Contact the bank immediately. Some banks also charge cancellation fees, especially after disbursal. Always get the cancellation in writing.

2. How do I report a fake loan agent in India?

You can report to your bank branch, cybercrime portal (cybercrime.gov.in), and local police. Keep all communication screenshots, documents, and phone numbers handy.

3. Is taking a loan from an NBFC through an agent safe?

Only if the NBFC is RBI registered and listed. Many agents work with shady lenders who charge 30 %+ interest. Always check the NBFC’s website and the RBI's registered list before signing anything.

4. Can an agent apply for a loan without my permission?

No. But some misuse Aadhaar, PAN, and sign documents behind your back. Always monitor SMS/email alerts from banks. If you see a new enquiry, report to CIBIL and the bank immediately.

5. What should I check in a loan agreement before signing?

Check:

• Interest rate and type (fixed or floating)
• Processing fee and hidden charges
• Foreclosure rules
• EMI start date
• Insurance (optional or forced?)

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?