Borrowing from one loan shark to pay another is the new addiction of most Nigerians. Due to the harsh economic situation in the country, most Nigerians now take online loans not necessarily for business, but just to survive.

Loan sharks are unregistered and unregulated financial service providers that usually give short term loans to anyone in need of quick money. They charge extortionist interest and resort to character defamation to recover their loans plus interest.

These loansharks have caused unimaginable grief and distress to borrowers who were unable to repay their loans, they usually resort to sending embarrassing messages to family and friends. If you’re in the neverending circle of borrowing from one loan app to pay another just to avoid the embarrassment, here are practical steps you can take to stop yourself from taking further loans.

Blacklist yourself from loan apps

If you’re in a neverending circle of borrowing, the first thing you’ll want to do is to blacklist yourself and take away your ability to access any loan shark. To do this, simply take a loan from any of them, then immediately payback the principal sum you were borrowed without the interest.

This will essentially make you unqualified to get any loan again in the future because no matter how unsophisticated these loan apps might look, they still run background checks on their potential borrowers. They do this through your Biometric Verification Number BVN and once your BVN showed that you have outstanding loans to settle, it will be difficult for you to get further loans. We recommend you take such a loan from Fairmoney, Branch, Carbon or any other loan app that doesn’t send threatening messages to their customers.

Join a support group

Joining a support group and reading about the experiences of other people will motivate you to stop patronizing loansharks. Make no mistake, people have lost jobs and contracts, families have been shattered all due to the activities of these loansharks. If you’re able to read the stories of other people and how they were able to dig themselves out of debts, maybe you can do it too.

Join this Facebook group where people share their terrible experience with most of the loan apps that operate in Nigeria.

Plan your finances well

The neverending circle of borrowing from one loanshark to pay another usually start with poor financial planning. If you can take control of your finances, then you might have no need to be borrowing in the first place.

Cutout unnecessary spending, have a monthly budget immediately you receive your salary and try to stick to it, save and invest as much as you can, and most importantly, improve your financial literacy by reading blogs like this and watching videos that teach financial literacy.

How do I stop loan apps from calling my contacts?

Technically, you can’t. You give them permission to your phone book immediately after you installed their app on your phone. The only work around is to have fake contacts on your phone at the point of download and installation. You can delete all your family and friends numbers from your phone and replace it with random numbers.

Some have suggested that you go to settings in your android phone, click on app & notifications. Scroll down to app permission and deny them access to your contacts, sms, photo gallery and storages on your phone, they won’t be able to reach out to your contacts anymore or post your pictures.

But this is unlikely to work as they would have copied your contacts once you give them permission after installation. The picture they send their defamatory messages with is usually they selfie they ask you to take during registration.

Can a loan app blacklist my BVN?

Yes, loan apps can blacklist your BVN when you default on your loan or didn’t payback your loan on time. They usually share the information with First Nigeria Credit Bureau or Mwanga – a debt recovery contractor thereby significantly reducing your chance to get a loan in the future unless if cleared. A blacklisted BVN can also affect your chances of getting a job or renting a property if your employer conducts a background check on you.

Can you be arrested or sent to jail for not repaying a loan in Nigeria?

No, loan defaulters will not be arrested or sent to jail in Nigeria. It is the usual tactics of loan apps to threaten their defaulting customers with arrest or jail time. But these apps themselves are mostly illegal that operate without license or respect for the rule of law. For example, CBN policy mandates that the minimum tenure for a short term loan should be at least 60 days, but most loan app in Nigeria offer loans for between a week, two weeks and maximum 30 days. The worse they can do is to blacklist your BVN with the consequences highlighted above but you will not go to prison for not repaying a loan app in Nigeria.

In conclusion, loan sharks are bad and can leave you in neverending circle of debt. You can take practical steps from stopping the circle by blacklisting yourself and taking away your ability to access further loans, joining a support group and improving your financial literacy to help manage your finances.

The post How to stop borrowing from loan apps appeared first on AFRICA EXPLAINED.

But with the proliferation of these loan apps, it has created an avenue for fraudsters to prey on unsuspecting borrowers. One of such apps they use is called Cashloan app on Google play store.

Cashloan app describes itself as a quick online loan app, and so far has over 10k downloads.

It says if you you downloan the APP and register an account, you can get a loan between NGN 5,000~~NGN 500,000.

The app further gives details of it’s loan as follows:

Loan Amount: ₦20,000 ~ ₦300,000
Loan Term: the shortest is 91 days, the longest is 365 days
Loan interest: It depends on the customer’s risk profile and loan period. The interest rate is from 12% to 25% per annum.
Service charge: 0%.

For example:
If you apply for a loan of ₦30,000, the term is 180 days and the annual interest rate is 15%.
So the daily interest rate=15%/365=0.041%, the interest for 180 days =₦30,000×15%/365×180= ₦2,214, the totally repayment=₦30,000+₦2,214= ₦32,214.f you choose a 12-month loan and borrow NGN 20,000, cashloan charges an interest rate of 2.08% per month. And the interest rate is 25%, we would charge you N5,000 as interest of 12-month repayment period. Total amount of repayment is NGN 25,000.

These claims are untrue. The app collects your details like other apps but makes you a loan offer that is too good to be true and then ask you to make a deposit of small amount like N3,000 to get N100,000 loan. ones you get tempted and make the payment, you have been scammed!

Here is how the scam works; when you download the app you will be prompted to provide your KYC details like every other loan app, then you will be asked to bind your ATM card to your account as a means of repayment. The app will then make you a loan offer that is too good to be true but asked to make an upfront part payment of your loan.

This is the scam Cashloan does, ones you make your upfront payment the app will start to malfunction and will not take you any further instead it will redirect you to the advert of other loan apps.

Is Cashloan legit?

No, Cashloan is a scam app that doesn’t give loans to customers, the app has all the known features of a scam app. The app asks you to make upfront and refer you to other money lenders.

Read what other users are saying about this app, it is mostly complains from people who have lost money to the scam app and other potential victims whose app malfunctioned before they make their payments. The address on the app is also fake, and no functional developer contact on the app.

How to detect a fake loan app

Note that loan apps in Nigeria operate unregulated, they are mostly unlicensed by the CBN and Google play store is merely a library for apps, it does not carry out verification before allowing them on it’s platform. So you are responsible for your own security when you download and use them. You can stay safe by looking out for the following red flags:

1. Loan apps asking for KYC information including your BVN and asking you to bind your ATM card to your account is normal, but when an app is asking you to make upfront payments or pay for processing fee, such an app is most likely a scam.
2. Always read other customer’s review on play store or read reviews on websites like this before downloading any loan app.
3. If an app does not have a contact phone number, or the phone number is not functional, that is a red-flag.
4. Pay attention to fake reviews on Google playstore, most of this apps pay spammers to write reviews for them. Most of the reviews will be from foreign accounts and will mostly give the app a five star without any reasonable comment.
5. Dont part with money for what ever reason before getting your loan.
6. The online loan industry in Nigeria is highly dysfunctional, read this investigative report before you take any online loan.

The post CashLoan App Review: This app is a scam appeared first on AFRICA EXPLAINED.