Day 8 of our Diwali 2026 series. Festive budgets are stretched, bonuses are late, and phones fill up with offers. That combination is exactly what loan fraudsters wait for all year. This guide shows the five festive scams we see described most often, a simple check you can do in two minutes, and what to do if you have already paid or shared something.
How a “Diwali loan” scam works
Most loan scams follow the same script. The details change, the festive wrapping changes, but the money flows in only one direction: from you to them.
The upfront-fee trap, step by step
A general pattern drawn from public fraud advisories, not a description of any specific case. Amounts are examples.
Five festive loan scams to watch for
1. The “pre-approved Diwali loan” message
An SMS or WhatsApp claims you are pre-approved for a large amount at a festive rate, with a link to “claim before Diwali”. The link leads to a look-alike website or an app file (APK) to install outside the Play Store.
2. The upfront-fee request
After a quick “approval”, you are asked to pay a processing fee, GST, stamp duty or “loan insurance” by UPI before disbursal. Once you pay, a new fee appears. The loan never does.
3. The fake customer-care number
You search for a lender’s helpline and call a number posted by fraudsters. The “agent” asks for an OTP, screen-sharing or a remote-access app to “process” your loan.
4. The UPI “collect” trick
You are told the loan will be sent by UPI and asked to “accept” a request or enter your PIN. Remember: you never need to enter a UPI PIN to receive money.
5. The illegal instant app
A real loan arrives, but from an unregistered app that demands access to contacts and photos, charges hidden fees and later harasses you and your family. See our guide to spotting fake and illegal loan apps.
What a genuine lender does
Names the RBI-regulated bank or NBFC behind the loan, shows a Key Fact Statement with the APR before you sign, deducts any fee from the disbursal, and pays straight into your own bank account.
Real lender or scam? A quick comparison
| Check | RBI-regulated lender | Likely scam |
|---|---|---|
| Who is lending? | Named bank or NBFC, with registration details on its website | Only a brand name, or a famous name copied |
| Fees before the loan | None; fees are deducted or added as shown in the KFS | “Pay ₹1,999 first to release your loan” |
| Documents and checks | KYC, income proof and a credit check | “No CIBIL, no documents, approved for everyone” |
| Where the money goes | Directly from lender to your bank account | Via a personal UPI ID or someone else’s account |
| App permissions | No access to contacts, call logs or photos | Insists on contacts and gallery |
| Pressure | Time to read and decide, plus a cooling-off period | “Offer expires at midnight on Dhanteras” |
The two-minute safety check
Find the lender’s legal name
Every genuine app or website names the bank or NBFC that actually lends. If you cannot find it, stop there.
Check the RBI directory of digital lending apps
Our guide on how to check whether a loan app is RBI-registered walks you through it. FundsTiger, our sister company, also keeps an RBI-approved loan app list.
Download only from the official app store or website
Never install an APK sent over WhatsApp or SMS.
Refuse any upfront payment
No fee before approval, no “refundable deposit”, no GST paid separately by UPI.
Read the KFS before you accept
It must show the APR, every fee and the repayment schedule. A lender that cannot show one is not one you want.
Already paid or shared details? Act fast
- Call 1930, the national cybercrime helpline, or file a complaint at cybercrime.gov.in as soon as possible. Speed helps.
- Call your bank to block cards or UPI and flag the transaction.
- Uninstall the app and revoke its permissions; change passwords and your UPI PIN if you shared them.
- Do not pay again to “unlock” or “cancel” the loan. That is the same scam continuing.
- If an unregulated entity is involved, you can also report it on the RBI’s Sachet portal.
- If you are being harassed by a recovery agent of a regulated lender, complain to the lender’s grievance officer and, if unresolved, to the RBI Ombudsman.
If a real but costly app loan is the reason you were tempted, the safer fix is to replace that debt rather than add more. See SmartSwitch, and our applicant’s checklist for instant loan apps. If you are cleaning up your finances before the new year, Day 5’s guide to cleaning up your credit report also helps you spot loans opened in your name without your knowledge.
Check before you borrow this Diwali
Use our step-by-step guide to look up any lending app in the RBI’s directory, and confirm who is really lending before you share a document.
Frequently asked questions
Are “Diwali loan offers” on WhatsApp genuine?
Treat any unsolicited loan offer with a link as suspicious. Genuine lenders name the regulated bank or NBFC, never ask for an upfront fee and let you apply through their official app or website.
Can a lender ask for a processing fee before giving a loan?
A regulated lender shows its processing fee in the Key Fact Statement and normally deducts it from the loan amount. Being asked to pay a fee by UPI before you receive the money is a classic sign of fraud. Omozing never asks for upfront fees before approval.
How do I check if a loan app is RBI-registered?
Find the name of the bank or NBFC behind the app, then check it in the RBI’s directory of digital lending apps and its list of regulated entities. Our guide at /rbi-registered-loan-apps/ explains the steps.
What should I do if I paid money to a fake loan app?
Call 1930 or report at cybercrime.gov.in immediately, inform your bank, uninstall the app and change any PINs or passwords you shared. Do not pay further fees to recover your money.
Do I need to enter my UPI PIN to receive a loan?
No. You never need to enter a UPI PIN to receive money. A request asking for your PIN is a request to send money out of your account.
Is a loan without any CIBIL check safe?
Be very careful. Regulated lenders check your credit and income before lending. “No CIBIL, no documents, approved for everyone” is a common line in scams and in illegal lending apps.
Omozing is the digital lending brand of Aparampaar Finance Private Limited, an RBI-registered non-deposit-taking NBFC. Omozing never asks for upfront fees before approval. FundsTiger is our sister company. See our regulatory disclosures and grievance redressal process.