We take a proper look at the things you need to consider before taking a loan in Nigeria.
Online loans are becoming more popular than you might think. These loan apps offer quick loans that don’t require collateral or minimal documentation, despite the tough economic times in the country.
Many of the negative stories that you may have heard about them are true. They often use less civilized methods to recover loans. Most loan apps have ridiculously high interest rates for a short time, and almost all aren’t registered or regulated.
These are the answers to factors to consider before taking a loan from loan applications in Nigeria.
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Can a loan application block my BVN
The Biometric Verification Number (BVN) is an 11-digit unique number that uniquely identifies each Nigerian when they interact with the country’s financial infrastructure. This number is administered and controlled by the CBN, in collaboration with licensed commercial banks.
Can a loan application block your BVN if you are not paying your loan on time? Technically, the answer is no. In cases where you have violated serious laws, only the CBN can blacklist the BVN. However, loan apps can blacklist your BVN and prevent you from applying for loans through other apps.
An app for loan cannot ‘BLOCK’ a BVN. They can only stop you from getting additional loans through their platform, or loans from any other loan app.
What happens if I am unable to repay my online loans?
The loan company will continue to contact you even before the due date. They will begin adding late fees to the balance after your due date. The loan company will then attempt to debit your ATM card linked to your account.
Some online loan apps in Nigeria send derogatory messages when all else fails. FairMoney, Carbon and Branch will pass your information to a loan recovery agency that will continue calling you until you pay the loan back.
Can I go to Jail if I don’t pay online loans?
You cannot be sent to prison for not paying your loan repayments. The loan company wants their money and you can’t repay them if you are in jail. Although loan sharks can threaten customers with lawyers and prison term, they are not allowed to send people to jail.
Why does a loan application ask for BVN information?
Your BVN is your unique identifier that links to all transactions you make in Nigeria. It is easier for loan apps to identify loan defaulters in Nigeria and deny them loans because everyone has one. The information you give these loan applications access to is a major factor to consider before taking a loan.
Some loan apps can be legally registered and regulated as microfinance institutions by the CBN. However, the majority of online loan apps in Nigeria are unregistered and illegal. This list shows approved loan applications by the CBN in Nigeria.
How can I stop an online loan application?
Most likely, you want to stop the loan application from taking money out of your bank account without consent. You can only stop the ATM card from being linked to your account by blocking and deactivating it. This can be done through your bank’s app, or by simply visiting your bank to request a new card.
Changing your card password does not stop auto debit.
Are loan apps able to access my contacts even if I uninstall them?
Yes, they still have your contact information. You grant them access when you first download the app. Most loan apps also make a copy immediately.
What loan app offers the lowest interest rates in Nigeria?
Low interest rates are offered by branch, carbon, Kuda, and commercial banks’ apps. The interest rate charged on loan applications is not uniform. It is affected by the credit score of each borrower and their repayment history.
You can leave any questions regarding loan applications in Nigeria in the comments section. Also, keep checking this website for new updates.I didn’t request a loan but money was transferred to my bank account. What should I do?
Sometimes, loan apps will disburse money to customers who didn’t request one. Or, customers might fill out forms and change their mind later due to the high interest rate or short repayment term, but money will still be sent to their bank accounts.What should I do if I have mistakenly paid more than I borrowed on a loan application?
Perhaps you are supposed to repay N12,000 but accidentally sent N120,000 to your loan application’s account. You should ask for another loan in the amount you have overpaid. This is N108,000. In such cases, it is often difficult to get reimbursements. This is why you should always be careful before verifying any transaction.
Mr Olawale Olokede is a registered loan officer and worked for over 10 years as a senior financial consultant for accounting, finance and business management firms in Nigeria. Mr Olawale Olokede implemented and supervised financial and loan solution to Lagos based small and medium scale businesses after lecturing at the Lagos Business school. He is channeled his writing skills and passion for blogging to set up Lending Naija with over 50 reviews on different loan application and downloads.