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Reference guide Irresponsible Lending
What is irresponsible lending, and can I use it to challenge my loan?
Anonymous
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Irresponsible lending is when a lender gives credit without properly checking whether the borrower can realistically repay. Examples:
- Approving loans for borrowers who already have a very high debt-to-income ratio
- Hidden fees or unclear interest structures
- Lending to people with poor credit history without proper checks
- Instant-loan apps with very high rates and aggressive recovery
Can you challenge a loan on these grounds? India doesn't have a specific "irresponsible lending" law like the UK. But you can complain to the RBI Ombudsman if the lender broke fair-practice rules, and you can raise it in settlement negotiations to push for better terms.
Banks often prefer restructuring to writing off a loan — use that when negotiating.
SA
SingleDebt Advisor
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