Last updated 12 Nov 2026
Most home loan fraud works by getting you to pay before the facts are checked: a fake or disputed property title, a builder with no registration, a "loan agent" who asks for a fee, or a document you did not read. Verify the property, the seller, the builder and the lender yourself before you pay any money.
The checks are not complicated, but they take time and it is tempting to skip them when a deal feels urgent. This guide lists the common frauds, the checks that stop them and what to do if you have already been caught.
Common frauds at a glance
Common home buying and home loan frauds and the check for each
| Fraud | How it works | The check that stops it |
|---|---|---|
| Fake or forged title papers | The seller shows copied or altered documents | Verify originals; get a legal opinion on the title chain |
| Double sale | The same property is sold to two buyers | Check the encumbrance certificate and registered documents |
| Property under dispute or mortgage | The seller has an existing loan or a pending court case | Encumbrance certificate; lender's no-objection letter; court records search |
| Unregistered or unapproved project | The builder sells flats without approvals | Check project registration with the state RERA authority and local approvals |
| Advance-fee scam | A person promises a loan and asks for a fee first | Never pay an individual before sanction; pay the lender through official channels |
| Fake lender or app | A look-alike site or app collects your documents and money | Check the lender's name in official sources; avoid unsolicited links |
| Inflated valuation or kickbacks | Property is overvalued to raise the loan | Ask for the valuation report; check market prices yourself |
| Loan diverted to someone else | The lender pays a third party instead of the seller or builder | Confirm payment goes to the seller's or builder's account named in the agreement |
| Forged signatures on loan papers | Documents are signed in your name without you | Sign only yourself; read before signing; keep copies |
| Mis-selling of insurance | A policy is added to the loan without explanation | Ask whether it is optional and what it costs |
Check the property before you pay
Title. The seller must have a clear right to sell. Ask for the chain of documents that shows how the property passed to the seller: earlier sale deeds, gift or inheritance papers, and the latest sale deed. Have a lawyer you trust, not one recommended by the seller, review the chain and give you an opinion. Lenders do their own legal check too, but it is made for the lender, not for you.
Encumbrances. An encumbrance certificate from the sub-registrar's office shows registered transactions on the property, including mortgages. If the seller has an existing loan, the seller's lender must release its claim, and the original documents should come from that lender at the time of sale. Ask for the lender's no-objection letter.
Approvals. Check the sanctioned plan, the building permission and, for a completed building, the occupancy certificate. A property built beyond the sanctioned plan can create trouble for you later.
Possession and dues. Visit the property. Confirm who lives there and that taxes, maintenance and utility dues are cleared. In some places a khata or equivalent record is needed.
Land use. Make sure the land can be used for residence. Land meant for agriculture or another use may need conversion before it can be built on or sold as a plot.
Check the builder and project
For an under-construction project, find out whether the project is registered with the state real estate regulator under RERA. The registration number should be on the builder's material and on the regulator's site. Check the promised completion date, the approved layout and the builder's earlier projects. Do not pay a "booking amount" in cash or to a personal account. Pay by cheque or transfer to the project account named in the agreement, and keep every receipt.
The lender releases a home loan for under-construction property in stages, as the work progresses. This links your payments to progress, which protects you, so check the construction stage before each release. Read home construction loan and home purchase loan for how this works.
Check the lender and the loan
The Key Fact Statement and APR guide shows how to read the loan's costs.
- Confirm that the lender is a bank or NBFC regulated by RBI, using the official lists on rbi.org.in. Do not rely on a logo or a message.
- Apply through the lender's official website, branch or an authorised partner, never through a link sent by an unknown person.
- A real loan is paid to the seller or builder, or to your account, as stated in the sanction letter. It is not paid to an agent.
- A lender does not ask you to pay a sanction fee into an individual's account.
- Read the Key Fact Statement and loan agreement fully.
- Never share your one-time code, PIN, card number or net-banking password with anyone, including someone who says they are from the lender.
A worked example
A salaried couple find a flat at a price below the neighbourhood rate. The seller asks for a token amount of ₹2,00,000 in cash today to hold the flat, saying that other buyers are waiting. The couple pause and ask for the title documents. They find that the flat is mortgaged to a lender and no no-objection letter exists, and the encumbrance certificate shows a pending charge. They decline to pay. Had they paid the token amount in cash, they would have had no receipt, no proof and little hope of recovery. The checks took a week and cost a legal fee and a certificate charge, small next to the amount at risk.
Warning signs
- Pressure to pay today
- A price well below the market without a clear reason
- A seller who will not allow a legal check or shows only copies
- A request for cash or for payment to a personal account
- A promise of sure approval, or a fee asked before sanction
- Documents that differ in names, spellings or dates
- A seller who is not the registered owner and relies on a power of attorney that you cannot verify
See also home loan red flags.
Protect your documents and identity
Keep your PAN, Aadhaar and bank details to yourself and share them only with the lender and its staff through official channels. Mask the Aadhaar number on any copy. Write the purpose and date on any photocopy you hand over. Do not sign blank papers or forms. Keep copies of everything you sign. Check your credit report after you take a loan, to be sure no other loan was opened in your name.
If you suspect fraud
- Stop all payments.
- Collect evidence: messages, receipts, documents, bank details.
- Inform your bank to block the payment where possible, and do it fast.
- Report to the cyber crime portal and the police where money or data was lost.
- Inform the lender in writing so it can act on its file.
- For a RERA-registered project, a complaint can go to the state authority.
- For a regulated lender's conduct, use its grievance process and then the RBI Integrated Ombudsman.
See borrower rights and grievance.
Applying through LOANZ 360
LOANZ 360 is a loan aggregator, not a lender. The lender decides, sanctions and pays out the loan into the borrower's own bank account. LOANZ 360 will not ask you to send money to an individual. Signed-in borrowers can see properties that banks and NBFCs have listed for auction or sale. Treat such a listing like any property: check the title, the possession status and the lender's terms before you bid. One advisor follows your file, and you track its status in your account. Sign-in is protected, and your data is masked by default. Read your data for how your information is handled.
Frequently asked questions
How can I check if a property has a clear title?
Ask for the chain of title documents and the latest sale deed, get an encumbrance certificate from the sub-registrar for the relevant period and have a lawyer you choose give an opinion. Lenders do their own legal check, but it protects the lender, so make your own.
Is it safe to pay a booking amount in cash?
No. Cash leaves no trail and few remedies. Pay by cheque or bank transfer to the account named in the agreement, and keep a receipt that shows the amount, the property and the date.
Does RERA registration remove all risk?
No, but it is an important check. A registered project has declared its approvals, plan and completion date to the state regulator. You still need to check the title, the builder's record and the agreement.
What should I do if someone offers a home loan for an upfront fee?
Do not pay. A sanction is made by a regulated lender after assessing you, and an individual cannot promise it. Check the lender's official channels and report the offer.
Can the lender's legal check replace mine?
No. The lender's lawyer protects the lender's security. You should have your own lawyer review the title and the sale agreement so that your interest is protected.
What if the builder delays the project?
Check the agreement for the committed date, and read your rights under RERA with the state authority. Keep paying your EMI only as per the stage-wise release; discuss concerns with the lender in writing.
Related reading: Home loans, Home purchase loan, Home construction loan, Home loan red flags, First-time home buyer checklist, Home loan documents, Encumbrance certificate, RERA, Property valuation.
See Home Purchase Loan Ask an advisor about it
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