Upfront loan fee and 'guaranteed sanction' frauds
Fraudsters posing as bank agents send fake approval letters and ask for processing, stamp duty or insurance fees before disbursal.
5 min read
What you need to know
The pattern is familiar: a call or WhatsApp message offers a large loan at a very low rate regardless of your CIBIL score. A sanction letter arrives on a copied bank or RBI letterhead, followed by requests for 'file charges', 'GST', 'stamp duty', 'refundable insurance' or an 'RBI clearance fee'.
Each payment is followed by a new excuse, and the loan never arrives. Genuine banks and NBFCs deduct processing fees from the disbursed amount or collect them through official channels in the lender's own name — never into a personal account or random UPI ID.
A real lender will verify income, check your credit report and conduct KYC before sanction. Anyone who guarantees approval without these checks is a red flag.
If you have lost money, call the National Cyber Crime Helpline 1930 immediately and file a complaint at cybercrime.gov.in. Inform your bank at once: under RBI's customer-liability rules, reporting an unauthorised electronic transaction within three working days generally limits your liability to zero when the fault lies with a third party. In Mumbai, Thane and Navi Mumbai you can also visit the nearest police station or cyber police cell with your bank statement and screenshots.
Continue your research
Use this guide alongside our product details and eligibility criteria before choosing a lender.
Key points and practical checks
- No genuine lender guarantees approval before credit assessment
- Pay fees only to the lender's official account, with a receipt
- Verify sanction letters by calling the bank's published number
- RBI never issues loan approvals or charges clearance fees
Frequently asked questions
What is the main takeaway from “Upfront loan fee and 'guaranteed sanction' frauds”?
Fraudsters posing as bank agents send fake approval letters and ask for processing, stamp duty or insurance fees before disbursal.
What should I check before acting on this banking & finance fraud guide?
Start with these checks: No genuine lender guarantees approval before credit assessment; Pay fees only to the lender's official account, with a receipt; Verify sanction letters by calling the bank's published number. Your final eligibility, pricing and approval still depend on the lender’s assessment.
Can the information in this guide guarantee loan approval?
No. It is general educational information. A bank or NBFC makes the final decision after checking your credit profile, repayment capacity, documents and the applicable product policy.
How can iFINTRUST help after I read this guide?
An iFINTRUST advisor can review your requirement, explain the documents normally requested and help you compare suitable lending options before you apply.