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10 Reasons Why You Must Avoid Loan Apps in Nigeria

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Many Nigerians have been hooked by how easy it is to apply for loans online. After reading this article, you will see why you must avoid loan apps!

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If Akpabio were to review the choice he made a month ago to bring his sick mother back to life, there is no doubt he would avoid anything that has to do with online loan apps.

 The 23-year-old Akpabio, who hails from Umuahia in Abia State, was racing against time to save his mother’s life. She was lying seriously sick on a hospital bed in Lagos, waiting to be transfused with a pint of blood. He kept his mother from the cold hands of death but did not escape the tragedy that struck after.

What Happened?

He could not repay the loan with which he bought the blood that got his mother back on her feet.

The promising young man, an Engineering student in Uniben, regretted the day he downloaded the NCash online loan app on his android cell phone.

This is a fictional story, but trust me, it pretty much sums up what some people experience when they use these loan apps. Please continue reading.

Akpabio was coerced into borrowing ₦25,000 to buy the blood and was required to pay back ₦34,100 within six days or risk being shamed and humiliated by the debt recovery officers of the loan apps he used.

Sadly, with the interest of ₦9,100 on a loan of ₦25,000 in six days, bringing the total amount repayable to ₦34,100, Akpabio could not meet his repayment obligation.

The young man who was full of life was hoping to travel abroad for a greener pasture, based on a promise made by a good uncle. He traveled to the village to see his uncle when he was expected to repay the loan. On his way, he made frantic efforts to repay through an online transfer of the money to his lender, but due to network problems (not a new Nigerian reality), he could not do so successfully. On getting to his village, Akpabio wasn’t still able to repay his loan until the next day when he got a message from the Loan App’s customer care officer reminding him to pay.

Following the inability of Akpabio to respond accordingly, the debt recovery officers started indulging in shaming acts, including sending negative messages to Akpabio and others in his contact. In the messages, Akpabio was called a fraudster, and people were advised not to have anything to do with him.

 Regrettably, the negative messages got to the man to sponsor his trip abroad, who changed his mind after reading that Akpabio was a fraudster. He distanced himself from Akpabio because of these messages.

Akpabio’s dream was shattered after many failed attempts to make his uncle see the situation from another lens. He broke down emotionally and slipped into depression. And that was the last straw that broke the camel’s back.

Not too long after that, his blood pressure went up abysmally, leading to his death. Because of this loan app, he watched a life-transforming opportunity slip off his hands, coupled with the shame that followed. 

To unravel what might have happened to Akpabio and how the acts of shaming and embarrassing debtors affect them, a clinical psychologist, Dr. Candyfidel Onwuraokoye, said such an experience could trigger depression, which, if not addressed immediately, can prove fatal.

“The impact of the abnormal treatments on these online loan applicants is the possibility of the abused developing traumatic stress disorder. Remember that they are already stressed before seeking a loan to clear their heads. Causing them more stress may trigger this condition, and where help didn’t come immediately, it could prove fatal.”

 “This can even lead to suicidal tendencies and actual suicide. Perhaps, that could explain what happened to Akpabio and may still happen to more people if this debt recovery approach is not addressed,” he said.

Many other Nigerians have suffered the same fate in the hands of online lenders. It is what many people go through daily to make ends meet, unfortunately, the regulatory bodies are yet to really address the anomalies.

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Google Already Frowned At These Loan Apps

The policy guidelines for loan apps on Google Playstore mandate that they give their users a window of 60 days between the time a loan is approved and the time it is due back.

Although the apps that cater to Nigerians advertise these regulations, their actual repayment terms are shorter.

The High-Interest Rates Offered By These Apps

Additionally, clients are unaware of the exorbitant interest rates until after these loan apps have disbursed loans. Consumers frequently fail to realize when their personal information and contacts are being collected since loans are swiftly paid.

This information enables loan apps to pursue defaulters by posting their images online and bombarding their friends and family with information about the case.

Applying for Loans on these Loan Apps

Applying for loans on these apps and websites is super easy.

These predatory loan apps pose as platforms where you can apply for quick loans without putting up sensitive information other than your bank account number (BVN) and granting permission to store your photo, contacts, and files on the device.

To you, your BNV is a piece of harmless information. But what happens when you cannot pay on time? Or when something happens to your phone or bank account, for example?

The worst part is that these loan apps sometimes function with no licensing, expired licenses, or neither in some situations. 

Why Nigerians Keep Using the Loan Apps

Despite these reservations, many Nigerians borrow money from these apps for different reasons, like funding a business idea, school fees, medical emergencies, and repaying current loans. The worst of them is borrowing money to feed.

Nigerians embrace the online lending option because the loan apps do not demand paperwork, as against bank loans.

You Must Avoid Loan Apps / Loan Sharks

Although the Federal Government has started moving against some of these loan apps, many of them are still at large, doing a lot of harm than good.

Beyond the crackdown, it is vital to analyze how the nation came to be in this mess. Simply put, it is difficult. The unsavory tendency of people to borrow subsistence amounts from dishonest loan companies, who treat them poorly when they default, stems from a lack of resources among the general public.

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The unfortunate truth is that many Nigerians are finding it more and more difficult to survive due to the shattered economy, even though some affected individuals were the victims of their avarice. The challenging economic environment is causing businesses to fail and industries to close. According to the National Bureau of Statistics, about 42.5% of youths are unemployed.

unemployment rate in Nigeria, according to the National Bureau of Statistics

10 Reasons Why You Must Avoid the Loan Apps

  1. Their interest rates are very high.
  2. Your image can be tarnished if you are unable to pay on time.
  3. You are at risk of increased blood pressure because knowing what you will face if you cannot repay your loan is enough to worry you.
  4. These loan apps do not care about your data/privacy.
  5. They are not worth it.
  6. The time bracket for repayment is very short.
  7. If you are unable to pay, you WILL be threatened by them.
  8. Depression does not look good on you.
  9. When you delay payment, your repayable amount keeps increasing.
  10. Abeg, place a premium on your peace of mind.

Conclusion

What do you think?

Have you used any of these loan apps before? Please share your experience or advice below.

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