Digital Loan Apps & How to Verify Them
Lendit (Chinmay Finlease) paid off your loan — then handed you a bigger one 3 days later. That's the trap, in its own paperwork.
How Lendit, the loan app run by RBI-registered Chinmay Finlease Ltd, rolled one short loan into a larger one three days later, labelled a 36.5% rate "flat" while charging it on a reducing balance, and pre-wrote home and office visits and employer contact into its agreement — plus your rights and how to file an RBI complaint.
A salaried borrower in Bengaluru repaid a short loan from Lendit — the lending app operated by Chinmay Finlease Ltd, a non-banking financial company (NBFC) registered with the Reserve Bank of India. According to the company's own records, that loan was treated as closed. Then, three days later, the same company disbursed a fresh, larger loan to the same borrower.
That single fact — one loan closed, a bigger one opened seventy-two hours later — is the whole machine in miniature. In lending it has a name: rollover, or evergreening. The old debt is not really cleared; it is refinanced into a new, larger one, with new charges and a new clock. The borrower who thought they had paid their way out is, in the company's own books, deeper in than when they started.
Here is the part that matters before anything else: Chinmay Finlease is RBI-registered. This is not a story about an unlicensed app run from overseas — the Government of India has already blocked 600+ predatory digital-lending apps, and the RBI issues repeated advisories about those. This is a story about what an RBI-registered, regulated NBFC wrote into its own agreement and its own demand letter, and how those documents are built to keep a borrower paying.
The "flat" rate that isn't flat
Read Lendit's paperwork and you find a 36.5% rate labelled "flat." The word is doing quiet, expensive work.
A flat rate is charged on the full original principal for the entire tenure — even as you repay instalments and the amount you actually owe shrinks. A reducing-balance rate, by contrast, charges interest only on what is still outstanding, so the rupee cost falls as you pay down the loan. The two are not the same, and on the same headline percentage the flat method always costs the borrower more.
In Chinmay Finlease's documents, the 36.5% is labelled "flat" while being charged on a reducing balance — a framing that makes the product look cheaper than it is. The true, effective cost is higher than the "flat" label implies. You do not need a calculator to see the principle: a "flat" number is a marketing number, not the rate your money is actually working at. This is plain arithmetic, the kind every borrower is entitled to have explained — and the kind the RBI's disclosure rules exist to force into the open.
That is why disclosure is not a formality. The RBI requires every lender to hand you a Key Facts Statement (KFS) before you borrow, stating the true cost as an Annual Percentage Rate (APR) — one comparable number that captures interest and charges together. When a rate is dressed up as "flat," the APR is what cuts through it. The KFS is the document that turns a friendly-sounding percentage into the figure you can actually weigh against your own budget.
The fine print they wrote for you
Much of what makes these products dangerous is not improvised by a rogue agent on a bad day. It is pre-written into the agreement a borrower approves in seconds on a phone screen.
Lendit's agreement is a useful specimen. It pre-authorises visits to the borrower's home and workplace, and contact with the borrower's employer. You read that correctly: before a single payment is missed, the borrower has supposedly "agreed" that the lender may turn up at their office and speak to the people they work with.
This is not unique to one company. Across the sector, loan agreements routinely contain clauses authorising home and office visits, contact with the borrower's employer and references, and even clauses that purport to override the National Do-Not-Disturb (NDNC) registry. They are written to sound like permissions you granted. They are not a free pass. A one-sided term buried in a digital agreement cannot license conduct that the RBI's own rules prohibit — and as we will see, the rules prohibit a great deal of it.
When repayment slips, the tone hardens. A later demand letter in this case warns the borrower of consequences to their "employment, onboarding, financial, travel, immigration" assessments — a sweep of a person's whole working and travelling life, invoked to manufacture fear. It is worth being precise about what that letter is and is not. It is a private company's pressure tactic. It is not a court order, it is not a finding by any authority, and it does not create a criminal liability where the law sees only a civil debt.
Why the rollover matters most
Step back and the design becomes clear. A "flat" label hides the real cost going in. The agreement pre-loads the pressure that comes out. And the rollover — closing one loan and opening a larger one three days later — is the hinge that keeps the borrower on the wheel.
Evergreening works because it feels, momentarily, like relief. The old loan shows as paid. The new, larger sum lands in the account. But the borrower has simply swapped a smaller debt for a bigger one, restarted the charges, and reset the calendar. Repeat that a few times and a person who borrowed a modest amount can owe a multiple of it, never having missed the sensation of "paying off" anything. It is the same trap documented across this series of instant-loan products — see the Rupee On Time case and the Ram Fincorp case, each examined through its own company's own paperwork.
Know your rights
None of this places the borrower outside the law's protection. Under the RBI Fair Practices Code and the Digital Lending Directions, a regulated lender and its recovery agents cannot:
- call you before 8 a.m. or after 7 p.m.;
- contact your employer, family, friends, neighbours or references, or disclose your debt to them;
- use abuse, threats, intimidation or public shaming;
- hide the cost — the APR must be disclosed in the Key Facts Statement before you borrow;
- recover the money by anything other than lawful means.
A clause in the agreement does not switch these protections off. The Code is a regulatory floor; a private term that "authorises" home or office visits or employer contact cannot rise above it. And the responsibility does not vanish into a call-centre or a third-party agency: the RBI is explicit that the Regulated Entity is accountable for the conduct of its recovery agents. When an agent acting for Chinmay Finlease crosses a line, the NBFC owns that conduct.
On the threats themselves, be clear-eyed. Inability to repay a loan is, by itself, a civil matter. You cannot be jailed simply for being unable to pay, and an agent threatening "arrest" over a defaulted loan is using unlawful pressure, not stating the law. A demand letter that gestures at your "employment" or "immigration" prospects is built to frighten — it does not create a power the lender does not have. (Distinct, genuinely criminal situations — cheque dishonour, actual fraud — exist, but they are not the same as falling behind on an instant loan, and a recovery agent does not get to blur them.)
How to report it
If a lender has crossed these lines, the channels below are free and official. You never need to pay anyone to use them, and you never need anyone's permission to assert your rights.
- RBI Sachet — sachet.rbi.org.in — to report an entity or an unlawful lending practice.
- RBI Ombudsman / Centralised Receipt and Processing Centre (CRPC) — for a complaint against a regulated NBFC, after you have first raised it in writing with the lender's grievance officer and waited 30 days without satisfactory resolution.
- National Cyber Crime Reporting Portal — cybercrime.gov.in — and the helpline 1930 — for data exposure, blackmail, or harassment that has become criminal.
- Consumer commission — you also have the right to approach a consumer commission for deficiency in service or an unfair trade practice, including a cost that was misleadingly presented.
Keep your evidence. Save the agreement and any Key Facts Statement, the demand letter, every email and message, and your call logs. A "flat" label on a reducing balance, a loan closed and re-opened days later, a clause authorising a visit to your workplace — these are exactly the kinds of things a regulator can read for itself when they are documented. Evidence is what turns a complaint into a case.
For the fuller picture of how RBI-registered instant-loan NBFCs are using their own paperwork — undisclosed costs, employer-contact pressure, and mass data exposure — read the wider investigation. Other entries in the series, each built on a single company's own documents, include a documented employer-contact harassment case and a loan-app mass-email data exposure.
These are RBI-registered companies — which is precisely why their own documents matter. The points above are not whispers about something done in the dark; they are what the lender wrote down, in an agreement and a demand letter, for the borrower to accept. The company named is, of course, entitled to respond.
Right of reply: any company named here may submit a factual correction or response through our right-of-reply channel, and we will publish it.