When I was in college, sometimes during an emergency I needed money. Either I can get it from my friends or family. But there are other ways to get money i.e, using mobile applications like Red Carpet that provides a personal loan.
These fintech startups come in very handy when you need money urgently and don’t have any other source. You just have to provide your Aadhar Card and PAN card. Though they have a pretty high-interest rate(10-20%).
The red carpet is a company that provides loans, mainly for students. It is similar to Dhani App. In order to use RedCarpet, you have to buy their credit card, which I won’t recommend.
So after I finished college and got the job. Paytm started the CIBIL credit report feature. A CIBIL credit score is a score that is required for estimating the loan that a bank or any fintech startup will give you.
So one loan caught my eyes as I was checking Paytm CIBIL credit score i.e. ₹60,000 is allotted to me by DMI finance (partner with Red carpet). I was completely unaware of it. This RedCarpet loan was allotted to me 2 years back(from today’s date). All the other loans I took were closed but this ₹60,000 RedCarpet loan was showing active. I downloaded a proper CIBIL report from paisa bazaar (as CIBIL credit score isn’t free, officially). And it was showing active there too. I contacted DMI finance and shared information about this matter as I wasn’t sure that the RedCarpet allotted this loan to me. They didn’t respond properly. After warning them about legal action then DMI finance said,
DMI Customer Support Team
We have gone through your case and found that you have a loan(XXXXX) with RedCarpet, in order to get this resolved, you will have to get in touch with your Channel Partner.
After this, I emailed email@example.com, about this issue. They asked me to share the Experian credit report(Experian and CIBIL are two different credit reports). As I checked my Experian credit score report, there was no loan and my score was 800+, but in CIBIL it was 724 (now it’s 710). I told them that CIBIL and Experian are two different reports, and they were insisting me to share the Experian credit report. I shared both of the reports and their reply was,
As we have checked your loan is already closed on your Experian CIBIL report & for another report, kindly contact with paisabazar agent
Like what did they mean? Is Paytm and paisabazar were showing incorrect information about a loan i.e. 2 years old? In Experian, there was no loan with ₹60000 amounts, but in CIBIL there was. I told them I will get back to you with a new report and will update it here.
Though they claim that they charge 2-3% but actually it can be up to ~20%. Let me tell you how.
I took ₹9,000 for one of my friends. I chose to return it in around 10 months. The total amount I returned to them was ~₹12,000. Actually the longer and smaller EMI option you will choose, the interest rate will increase drastically.
If it’s really 2-3%/per month, EMI should have been no more than ₹1020 right? But per month I had to give ~₹1200. I am not saying there is some kind of hidden charge, but if you will google, “red carpet interest rate“. It will show you 2-3% but actually, that is not completely true.
The redcarpet also provides Red carpet credit card i.e. Ruby card. As they were trying to sell me their Ruby Card by spamming my number with endless calls. I blocked around 10-12 redcarpet numbers. I had to block them as if I disconnect, within a second another bell rings.
It’s written in their DMI agreement that,
4.13 The User may at any time close his account by contacting firstname.lastname@example.org. Upon closing any pending transactions may be cancelled by RedCarpet. In case the User owes amounts to RedCarpet or the Financing Partner such account shall not be closed until all pending payments are made and during such period, the User shall not be allowed to avail any Service or buy any Product.
If you use redcarpet(or any other similar application), keep checking your CIBIL credit report. There are a total of 4 credit reports in INDIA i.e. CIBIL, Experian, Equifax, and Highmark. Keep an eye on these reports. Try to avoid any credit card or loan from these applications. Don’t create an account on multiple loan applications.
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