Online lending apps are fast becoming very popular in Nigeria, they have gained a lot of millage in their few years of operations. Their patronage and customers have grown significantly for no other reasons than simplicity and easy access.
Online lending apps offer as low as 5,000 Naira to sometimes millions of Naira to prospects, with tenures within 3 to 12 months depending on the ability of the applicants. These abilities are proven by documents the applicants uploaded for review by the lending app owners.
The simplicity and easy access to loans that is lacking in the conventional banks is what these loan apps has exploited and it is working for them. The conventional bank will make you visit the bricks and mortar with several documentation and approval process before your loan get approved and you also have to pick up an offer and execute loan agreements before your account is credited. But with lending apps, every processing is done online and you may be credited in less than 24 hours depending on what lending app your are patronizing.
Another important reason why these lending apps get their huge patronage apart from the absence of paper documentation is the absence of collateral. Most of the lending app companies depends on the permission you have given to the apps to use your contact and they exploit that as their collateral for the loans you have taken from them. They make calls to your contacts to remind them of your overdue loan obligations when you are not paying as agreed. There had been reports of loan app companies sending nasty and unsolicited messages to contacts of a borrower to harass the borrower into fulfilling overdue obligations.
Apart from easy access and simple collaterals, another thing that makes lending popular among their users is the fact that they offer lower amount to their customers. Lending apps offers as low as N5,000 to borrowers, an amount that conventional banks may never offer. Although interest may be higher with lending apps but their customers seems to be enjoying their simplicity, zero collaterals and the flexible loan amounts on offer.
Some of these lending app companies have however been accused of being overzealous in their approach to recovering their overdue loan obligations. My good friend, Femi Adeoya, owner of www.quickloanarena.com has written extensively on the methods used by these lending apps.
So if you are pressed for funds and you have no choice but to patronize a lending app. Here are the five questions you need to ask yourself before you download and use a lending app in Nigeria
- How Come? – The first question you need to provide an answer to before download that lending app for loan application is how come you have to borrow from a lending app?. Is it that you don’t have an option, you urgently need cash and every other alternatives won’t work?. Is it that you have been denied request by your bank and you have to resort to a lending app or you have not looked anywhere else but just want to try it for the first time?. Whatever your response to these questions are, I will advise you use a lending app as a last resort and not when there are options that are equally feasible.
- How much? – If you must borrow money from a lending app my advice is that you keep the amount as low as possible. You see, most lending app are not tolerant of delayed repayment or non fulfilment of overdue loan obligations, they will simply unleash full recovery mode on you as soon as they notice that you are not paying promptly. They go as far as sending unsolicited and sometimes blackmailing messages to your contacts. Some will go as far as calling you a fraudster. So if you must patronize a lending app, make sure you are requesting for an amount withing your pocket reach if you don’t want to be embarrassed.
- How repay? – Another very important question you need to ask yourself before you patronize a lending app is how you want to repay the loan. You must have a concrete repayment source and plan, do not be too enthusiastic about getting the cash and forgot that it is a loan that must be paid back. Lending apps are not “Father Xmas” who gives for free. They are a business set up to make profit and can be ruthless when it comes to recovery of their loans. Loan repayment is key, just like loans from any other source, they get their profit only after you have paid fully. So get your repayment plan ready before you download that lending app.
- How long? – Just like with loans from any other sources, tenure is as important as your ability to repay the loan. The longer the tenure the more flexible the repayment amount. But my advise for you if you are patronizing a lending app is to be brief with the tenure, choose the shortest tenure that aligns with your repayment ability and liquidate the loan as quick as you can. You don’t want to go broke and still be getting harassment from a lending app.
- How safe? -More important than all other questions is the question of the safety of the information you have provided for these lending apps at the time of registration. Information such as BVN, Card Details, Date of Birth, Bank Account Details, Next of Kin and others are vital information that may be used by scammers to defraud you if it falls into the wrong hands. Be discreet about the reputation of the lending app you are about to release these personal details to to avoid being scammed
