The permission screen to give certain access to the personal loan app shows for about ninety seconds. It asks to allow access without putting a thought to what access is asking for, as your rent is due on Tuesday, and your salary will be credited late.
Most guides that give you advice about choosing a personal loan app only focus on the interest rates and approval part. There are very few that talk about what information the app asks for, and for how long that record stays with them after the bills are repaid.
In this guide, we’ll cover what information these personal loan apps collect, what the rules now forbid, how long they keep it, and what you can actually do to erase them.
What Goes Into Your File The Moment You Apply
Your profile is built from three main sources, though many know only the first one.
First, there is the information you provide yourself. This includes basic details like your name, birthday, PAN number, where you work, your salary, and your bank details.
Second, the app collects data directly from your phone. It uses your GPS to confirm your address, your camera to take a selfie or photos of your ID, and your microphone if you need to do a video call for the KYC process.
Finally, the app also gets some data from outside sources based on the data you give it. Once you enter your PAN, the app pulls your full credit report. This shows every loan or credit card you’ve ever had, any late payments, and how often you’ve applied for credit recently.
Even a gold loan app looks at this report to see your financial habits, even though the gold itself acts as security.
Which Permissions Can A Personal Loan App Ask For?
The current RBI norms allow a personal loan app to access only three things on your phone: your camera, microphone, and location.
It cannot access your contacts, photo gallery, or any files. If there is any app that asks you permission to access these personal files, then it is not a genuine app.
Two additional rules help in protecting your privacy:
- The apps cannot track you secretly for months. It should ask for your permission, and the consent is only valid for a single use.
- If the app collects any personal information, it must be stored on servers located within India only. If any of your data is sent abroad, the company should either delete it or return it to India within 24 hours.
A regulated personal loan app shows all the permissions it needs on the download page before you even install it.
How Long Do They Keep The Records?
The apps usually keep the records longer than the loan tenure.
Paying off your loan doesn’t mean the data with the lender is automatically deleted. That is why it is so important to be careful when you first accept the app’s terms. By law, lenders must keep your identity documents (KYC) for five years after your loan account is fully closed.
India’s credit bureaus keep a record of your loan for 7 years from the date the account was closed. This record shows whether the loan was paid in full or settled by paying less than the full amount.
Therefore, regardless of whether the record is positive or negative for your credit, the file will remain with the credit bureau for the stated years.
Can You Get The Data Deleted?
Yes, you can get the data deleted. You have the right to withdraw your consent and also request deletion of the data you consented to, if that data is no longer required.
The Digital Personal Data Protection Rules say a company has three months to respond to a request for deletion or to file a request for correction as of November 2025.
What you cannot delete is whatever the law forces the lender to hold, like:
- KYC papers during the five-year window.
- Repayment history at the bureau.
- Transaction history.
How Do You Check If A Loan App Is Safe?
To see if a loan app is safe to download, there are three things you can check.
The RBI has a public directory of digital lending apps that banks and non-banking finance companies (NBFCs) have made. If the app you are downloading isn’t on that list, you should be cautious before sharing any of your documents with them.
The second thing to check is to open the privacy policy of the app and search for the word “retention” in it. A serious lender will state their real holding periods, while a vague one will not.
The third check is to read the permissions requested while installing the app. If you find anything beyond the three approved by the RBI, it is a warning sign to avoid the app.