Are Nigerian Loan Apps Safe? 10 Things to Consider Before Borrowing

Over the past few years, Nigerian loan apps have surged in popularity, providing swift and convenient access to much-needed cash. This rise, however, prompts a critical evaluation of their safety, urging potential borrowers to conduct thorough research before engaging with these platforms.

In this comprehensive blog post, we delve into key considerations for anyone contemplating borrowing from a Nigerian loan app. Our exploration encompasses a balanced examination of the advantages and disadvantages these apps present, shedding light on the potential risks inherent in their usage. Moreover, we offer invaluable insights and precautionary measures to ensure a secure experience when navigating the realm of loan apps.

As we navigate through this discussion, we’ll address some frequently asked questions that surround the landscape of loan apps in Nigeria. By unraveling the intricacies of these queries, we aim to equip readers with a deeper understanding of the nuances involved in borrowing through these platforms.

In an environment where financial decisions carry weight, arming yourself with insights becomes paramount. Let’s unravel the intricacies and demystify the landscape of Nigerian loan apps together.

Can a loan app block my BVN number?

No, a loan app cannot block your BVN when you default, they can however report your BVN as a loan defaulter, which might prevent you from getting loans from other lenders and will show up on your record every time someone does a financial background check on you.

In case of serious default or crime, the CBN might be able to block your BVN, preventing you from opening a new bank account or using your existing bank accounts. Your 11 digit BVN contains biometric data that cannot be changed and can be used to identify you everywhere. So, do not give your BVN to loan apps you have no intention of repaying.

Is there a Nigerian loan app that gives loan without BVN?

No, no loan app will give you a loan without providing your BVN. They need your BVN to track your credit history as well as to file a report when you default on your loan repayments. Your credit score is the history of how you performed on your previous loans, how much and whether or not you repaid your loan on time.

What happens if I cant repay a loan app?

Even before your due date you will start getting persistent calls and SMS from the loan company. After your due date they will start adding late fees to your balance. Then the loan company will try to auto debit the ATM card you have linked to your profile.

when all these fails, some online loan apps in Nigeria are notorious for sending derogatory messages to the contacts of their defaulters. Other trusted apps like Branch, Carbon and FairMoney will pass your contact to a loan recovery company that will call you persistently until you repay the loan. Eventually, if your loan has been long, they will just add you to credit bureau blacklist which will prevent you from getting further loans from other lenders.

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Can I go to Jail for not repaying online loan apps?

In Nigeria, debt is a civil matter, not a criminal matter. Lenders are interested in making money not engaging in long legal cases . However, there are other consequences of not paying an online loan, such as:

  • Damage to your credit score. Your credit score is a measure of your financial history and is used by lenders to determine whether or not to lend you money. If you fail to pay an online loan, your credit score will be negatively affected. This can make it more difficult to get a loan in the future.
  • Legal action. The lender may sue you for the unpaid debt. If you are sued and lose, the court may order you to pay the debt, plus interest and legal fees.
  • Wage garnishment. If you do not pay the debt, the lender may be able to garnish your wages. This means that the lender can take a portion of your paycheck each month to pay off the debt. This mostly applies to salary earners who use their salary accounts to pro process the loan
  • Property seizure. In some cases, the lender may be able to seize your property to pay off the debt. This could include your car, your home, or other valuables. This only applies if the said property was used as a collateral during the loan processing.

Why do loan apps ask for BVN?

Loan apps ask for your BVN (Bank Verification Number) for a few reasons:

  • To verify your identity: Your BVN is a unique identifier that is linked to your bank account. This means that loan apps can use your BVN to verify your identity and ensure that you are who you say you are.
  • To check your credit history: Your credit history is a record of your past financial behavior. This includes things like your payment history, your debt levels, and your credit utilization. Loan apps can use your credit history to assess your creditworthiness and determine whether or not you are a good risk for a loan.
  • To prevent fraud: Your BVN can be used to prevent fraud by making it more difficult for someone to impersonate you and take out a loan in your name.

It is important to note that loan apps are not allowed to share your BVN with third parties without your consent. This means that your BVN is safe with the loan app, and it will not be used for any other purpose without your permission.

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If you are concerned about sharing your BVN with a loan app, you can ask the app how they will use your BVN and what security measures they have in place to protect your information. You should also be aware of the terms and conditions of the loan app before you agree to share your BVN.

Here are some tips for staying safe when sharing your BVN with a loan app:

  • Only share your BVN with reputable loan apps. Do some research on the app’s reputation before you share your BVN.
  • Read the terms and conditions of the loan app carefully. Make sure you understand how your BVN will be used and what security measures are in place to protect your information.
  • Be careful about what information you share online. Only share your BVN with websites and apps that you trust.

Are loan apps legal in Nigeria?

There are a number of loan apps that are duly registered to provide short-term loan services in Nigeria. However, most of the loan apps available on the Playstore are not regulated or registered with the authorities which is why they use less than civil methods to recover their loans. Always do your research on every loan app and read the reviews of other users before downloading an app.

How do I block an online loan app?

You can block an online loan app from auto-debiting your account without consent. After binding your ATM card to your profile, the only way to prevent this is to block and deactivate the ATM card. You can do this through your banks app or simply going to your bank to block your card and request a new one.

Changing your card password does not stop auto debit. Most loan apps will attempt to debit the card you submitted to them even before your due date.

Can loan apps access my contacts even after uninstall?

Yes the still have your contacts, you grant them access to your contacts when you first download the app and most loan apps make a copy of your contacts immediately.

You can still prevent defamation by deleting your WhatsApp picture or limiting access to it to only your saved contacts by changing your privacy settings.

Most loan apps that defame people usually get their pictures from the WhatsApp profile.

Which loan app has the lowest interest rate in Nigeria?

Branch, Carbon, Kuda and commercial bank’s apps have low interest rates. The interest rate on loan apps is not uniform, it is influenced by factors such as credit score and repayment history of each individual borrower.

If you have further questions related to loan apps in Nigeria, leave it in the comment section below and check back on this webpage for updates.

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I did not request a loan, yet money was disbursed to my bank account. what should I do?

Sometimes loan apps do disburse money into a customer’s bank account who did not request one, or a customer might fill out the form and later change their minds due to the high-interest rate or small repayment tenure, yet money will be disbursed into their accounts.
If you are experiencing something similar, immediately deposit back the principal amount that was sent to your bank account to avoid paying interest on it later.

How do I report a Nigerian loan app?

Most of the online loan apps that operate in Nigeria do so without licenses or regulation from any government agencies. In cases of serious rights violations, you can, however, file a complaint with the Federal Competition & Consumer Protection Commission. They are the government agency for customer rights protection in Nigeria and they have been known to take down erring loan apps in the past.

how do I stop loan apps from calling my contacts?

Most loan sharks call their customer’s contacts to intimidate them into repaying their loans. The way to stop a loan app from calling your contacts is to repay your loan on time before you default or you delete all your important contacts before installing the app on your phone.

wrapping up

In conclusion, Nigerian loan apps can be a convenient way to get quick cash. However, it is important to do your research before borrowing from anyone of them.

  • Consider the interest rates and fees: Loan apps typically charge high interest rates and fees, so it is important to understand what you will be paying before you borrow.
  • Understand the repayment terms: Make sure you understand the repayment terms before you borrow, including the length of the loan and the monthly payments.
  • Do some research on the app’s reputation: Do some research on the app’s reputation before you borrow, to make sure it is a legitimate company.
  • Make sure the app has strong security measures in place: Make sure the app has strong security measures in place to protect your personal information.

If you follow these tips, you can help to protect yourself from the risks of borrowing from a Nigerian loan app.

However, it is important to remember that Nigerian loan apps are not a long-term solution for financial problems. If you are struggling to make ends meet, you should seek professional financial help.

There are many reputable financial counseling organizations in Nigeria that can help you develop a budget and create a plan to pay off your debt. With the right help, you can get your finances back on track.

Ibrahim Ismail

A passionate and highly skilled individual who has seamlessly blended the worlds of statistics, technology, and finance.

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