Is Digital Lending A Loan Trap? An Empirical Study Towards Customers Indebtedness

Abstract

Digital Banking has made remarkable revolution in the services of banking. Among all such digital services, Digital Lending has received utmost satisfaction among the customers of banking, where they find easy access to credit than traditional banks. However, due to improper borrowing, unaware terms and conditions, counterfeit platforms, etc., there is a potential risk of a Debt Trap for the customers, where their debt might turn into a vicious one. This study aims at studying the factors that might cause potential risks of a debt trap of a customer who borrow digitally. The results of the study reveal that customers are unaware of the interest terms and the potential risks on defaulting. The study has also provided various insights for a feasible borrowing decision.