More people are taking online loans than you probably imagined. with the harsh economic realities in the country, these loan apps provide quick loans without asking for collateral and minimal documentation.
but also a lot of the ugly stories you might have heard about them is most likely true. Some of them often deploy less than civilized tactics to recover their loans, most loan apps charge ridiculously high interest rate for a short period of time and virtually all of them are not registered or regulated.
Here are some answers to questions you might have regarding loan apps in Nigeria.
- 1 Can a loan app block my BVN?
- 2 What happens if I cant repay my online loans?
- 3 Can I go to Jail for not paying online loans?
- 4 Why do loan apps ask for BVN?
- 5 Are loan apps legal in Nigeria?
- 6 How do I block an online loan app?
- 7 Can loan apps access my contacts even after uninstall?
- 8 Which loan app has the lowest interest rate in Nigeria?
Can a loan app block my BVN?
Biometric Verification Number BVN is a unique 11 digit number that identifies every Nigerian as the interact with the country’s financial infrastructure. The number is given and controlled by the CBN in association with licensed commercial banks.
So can a loan app block your BVN for not repaying your loan? technically the answer is no. Only the CBN can blacklist your BVN in cases were you seriously violated the country’s laws. Loan apps however can block your BVN on their app and even prevent you from getting loans from other loan apps.
A loan app cannot ‘BLOCK’ your BVN, they can only prevent you from getting further loans from their platform or getting loans from other loan app.
What happens if I cant repay my online loans?
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. others like Branch, Carbon and FairMoney will pass your contact to a loan recovery company that will call you persistently until you repay the loan.
Can I go to Jail for not paying online loans?
No you cannot go to jail for defaulting on your loan repayment. The loan company want their money, and when you’re in jail, the you definitely cant repay. Tho some loan sharks have been known to threaten their customers with lawyers and jail term, they cannot send anyone to prison.
Why do loan apps ask for BVN?
Your BVN is your unique identifier linked to every transaction you perform in Nigeria. Because every Nigerian only has one it makes it easier for the loan apps to identify loan defaulters and deny them loans.
Are loan apps legal in Nigeria?
Some loan apps are legally registered and regulated by the CBN as microfinance institutions. But majority of the online loan apps that operate in Nigeria are illegal and unregistered. See this list of CBN approved loan apps in Nigeria.
How do I block an online loan app?
You probably want to prevent the loan app from removing money from your bank account without your 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.
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.
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.
Maybe you’re supposed to pay back N12,000, but you mistakenly sent N120,000 to the loan app’s account. In such a situation, you should request another loan in the amount that you overpaid. That is N108,000 in this example. It is usually difficult to get reimbursements in such cases, which is why you should be very careful and double-check before confirming any transaction.
It is standard practice that most loan apps increase the loan amount for their customers when they repay on time, but they are not under any obligation to do so. There are a few reasons why a loan app might not increase your loan amount even after repaying on time;
Their loan limit: Most loan apps have a loan limit which they cannot borrow you above that amount. for example, if the loan limit on an app is 50k, they will not increase your amount even after you repaid your previous 50k on time.
Availability of funds: loan apps have certain amounts they have programmed their computers to borrow customers, the system might limit your loan amount if their are plenty borrowers also applying. So your loan amount might not increase through no fault of yours.
Loan history with other lenders: Your loan amount might not increase if you have outstanding loan with other lenders or you refused to pay other lenders on time. your general loan history can affect your loan amount because loan apps want to do everything to be sure that you will pay them back in time.
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.
Loan apps like Carbon and bank apps are the best because they offer safe and reliable online loan services in Nigeria. Other legit and CBN-licensed online loan apps can be found on this list.
No online loan app will give a loan without BVN. Your 11 digit BVN is your unique identifier used by financial service providers to identify their customers. They use the BVN to check a customers credit report – how early they repay their loans when given and if they have any outstanding loans they are yet to repay. The BVN is an extremely important KYC document requested by all loan apps before giving a loan.
Okash loan app from Opay gives customers loans without binding card. Most loan apps do however require card binding as a means of repayment and so they can autodebit the card when the tenor is due. You can prevent autdebit on your card by going to the bank to have the ATM card blocked. Card blocking can also be done online.
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.
can loan apps access my bank account to withdraw money?
No, they can only access the ATM card you bind to your account during registration. Most loan apps will remove their money from your account on or before your deadline day. To prevent this, you can block your ATM card and request a new one from your bank.
Global Standing Instruction GSI is a tool initiated by the CBN to help creditors recover their loans from debtors without notifying the debtors. It means creditors can take money from any account linked with their debtor even from accounts in other banks. Loan apps in Nigeria cannot use GSI recovery to recover their loans because most of them are not registered with the CBN. GSI recovery mandate can only be issued by the CBN.
Most Nigerian loan apps are unlikely to borrow you up to 100k at first application. You can however build your credit score by repaying your loan on time. Most loan apps offer revolving loans which increase every time you repay your previous loans.
Online loan apps are designed to provide quick cash for emergency use only. Most online loan apps have a loan repayment of between 7 to 30 days. If you want a loan with longer repayment term, consider taking a business loan from your commercial bank.