Online mobile finance providers are everywhere on app stores. These apps offer borrowers loans for personal emergency uses and business uses. The entire business model of these companies is to provide short term loans to their customers and charge an interest on every transaction. But how do these money lenders calculate how much they should borrow each customer, for how long and how much interest they should charge on each loan?

If you have ever taken a loan from an online money lenders, or attempted to take one, you will notice that your loan offer, interest and tenure is usually significantly less than what is advertised on the app.

For example, Xcredit loan app advertises that its interest rate is between 12% – 36%APR, with 0% service fee. Tenure between 91 to 360 days with a maximum loan amount N500,000.
Example: If the loan amount is ₦5,000, the loan term is 180days, and the Interest rate is 12%, the total Interest should be ₦5,000 * 12% = ₦600.

In reality, the majority of loan term offered on the app is usually less than 30 days and most customers don’t get loans anyway near N500,000. The app does advertise that you can build up your loan amount by repaying on schedule, but still most customers don’t see significantly higher loans.

Factors that affect your loan

When you download and install any online loan app, you will notice that the app usually ask for permission to access your contacts list and SMS. This is because the app uses artificial intelligence AI to analyze your data and build both your credit score and credit worthiness.

What the app is doing is going through your SMS to check for bank alerts and determine how much money is coming in and out of your accounts.

Most apps will also ask for your Bank Verification Number BVN to see your credit history with other lenders and to see if you have any outstanding loans you are yet to pay.

How to get higher loan amounts from online apps

The apps are in business to make money, so before they give you a loan, they have to determine if you can repay. They do this by going through your history. You can improve you loan amount by

1. Keeping records of your bank alerts: the AI in the loans have been trained to collect and analyze this data point, the more credit alerts on your phone, the higher your chances of getting a higher loan. Don’t delete your bank SMS alerts.
2. Repay all outstanding loans before applying for a new loan: this should go without saying, the apps will analyze your BVN and if they find that you have outstanding loans from other lenders, it might reject your application or offer you a lower amount.
3. Repay your loans on time: as stated earlier, these apps rely on data, they keep a record of your loan behavior – they know when and how you repay. Repay your loans as at when due to build up your profile.
4. Be patient and establish trust: for practical reasons, you cannot expect to be borrowed millions or hundreds of thousands at your first try. You have to earn their trust first. Start by taking the small amounts you are given and then you can repay on time and qualify for a higher amount.

It can be a bit disappointing after you’ve downloaded a loan app and you are expecting to be offered a reasonably large loan amount, most especially when you are attracted by their ads in the first place only to be offered a small amount less than N5,000. But if you keep your bank alerts records, repay your outstanding loans on time and build trust, you will soon qualify for those big loan amounts that attracted you in the first place.

The post How loan apps calculate your loan amount and how to increase it appeared first on AFRICA EXPLAINED.

What is NowCash Nigeria loan app?

NowCash is a Nigerian fintech that offers short term loans to borrowers through its mobile app. The app is designed with a smooth and easy to use interface that even if people don’t have a bank credit card, NowCash makes instant loans possible for everyone. Powered by AI technology and cloud computing, NowCash conducts sophisticated credit check and risk management while provides people a simple money lending user journey.

How to get a NowCash loan?

Get an instant loan in 5 simple steps:
● Download and install the NowCash Loan App for FREE now from the Google Play store!
● Simple & fast advance loan application process. Apply for money loans based on the amount you need.
● Provide basic information and bank details
● Apply for approval
● The approved amount will be credited to your bank account within 30 minutes.

NowCash loans interest rate?

The Interest rate on NowCash loans are between 12% – 18% APR For example:
if a customer borrows ₦9,000 for 180 days (6 months), the APR is 18%
So the total Interest would be 9000 NGN 18%180/365 = 799 NGN.
The monthly payment would be (9000 NGN +799 NGN )/6 = 1633 NGN.
The total repayment amount would be 9799 NGN. Note, your actual interest rate might differ from these as each interest rate is calculated differently based on your credit score and other indicators.

Loan Term:  91 – 360 days ,  Loan Amount:  Up to ₦ 300,000
There are no long queues, no long wait times, no collateral or guarantors needed. Just your smartphone.

NowCash loan app advantages:

1.Safe, confidential and efficient
2.Low interest rate, long term,flexible repayment plan
3.7*24 hours online review

Is NowCash legit?

Yes, the loan app appears to be legit. No scam claims on their reviews on Play Store thou a lot of customers are complaining of poor customer service and unacceptable loans sent to their bank accounts. One customer complained that the only downloaded the app and didn’t accept the loans they were giving, but the loan was disbursed to their bank account anyways and now they have to pay the interest. Be careful when using this app.

Please read their privacy policy carefully to get a clear understanding of how they collect, use, protect or otherwise handle your Personally Identifiable Information.

NowCash CONTACT and customer service

If you have further questions, you can contact the NowCash customer service via
Email: sumuel.cleb.business@gmail.com
Or visit the head office Address: 52 IJIAYE ROAD OGBA-IKEJA LAGOS

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