Popular List of illegal loan apps in Nigeria Banned (Fake Loan App Exposed)

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The digital lending industry in Nigeria has witnessed a rapid growth in recent years, as more Nigerians turn to online platforms to access quick and easy loans. However, not all loan apps are legitimate, safe, or regulated. 

Some loan apps are illegal, fraudulent, or predatory, and they exploit unsuspecting borrowers with exorbitant interest rates, hidden fees, and unethical recovery methods. In this blog post, we will expose some of the popular list of illegal loan apps in Nigeria, and how to avoid them.

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What are illegal loan apps?

Illegal loan apps are online platforms that offer loans to Nigerians without complying with the regulatory framework and guidelines issued by the Federal Competition and Consumer Protection Commission (FCCPC) and the Central Bank of Nigeria (CBN). 

These loan apps operate without proper registration, licensing, or authorization from the relevant authorities, and they violate the consumer rights and protection laws of Nigeria. Some of the common features of illegal loan apps are:

• They charge outrageous interest rates, ranging from 30% to 1000% per annum, and sometimes even higher.

• They impose hidden fees, such as processing fees, service fees, late payment fees, rollover fees, and prepayment fees, that are not disclosed upfront or in the loan agreement.

• They have short and inflexible repayment terms, usually between 7 to 30 days, and they do not offer any grace period, extension, or restructuring options.

• They access the personal data, contacts, and social media accounts of the borrowers, and they use them for verification, marketing, or harassment purposes

• They employ aggressive and abusive recovery methods, such as sending threatening messages, calling repeatedly, contacting family and friends, publishing names and pictures on social media, or reporting to law enforcement agencies.

How to identify illegal loan apps?

There are some signs and indicators that can help you identify illegal loan apps and avoid falling victim to their scams. Some of them are:

• They do not have a physical address, a customer service number, or an official website, and they only operate through mobile apps or social media platforms.

• They do not have a clear and transparent loan agreement, and they do not provide any terms and conditions, privacy policy, or disclosure statement.

• They do not require any verification, documentation, or collateral, and they approve loans instantly or within minutes.

• They do not have any reviews, ratings, or feedback from previous or existing customers, or they have negative or fake reviews.

• They do not have any logo, trademark, or branding, and they use generic or similar names to other popular or legitimate loan apps.

What are the consequences of using illegal loan apps

Using illegal loan apps can have serious and negative consequences for your financial, personal, and mental well-being. Some of the consequences are:

• You can lose a lot of money, as you will have to pay back the principal amount plus the high interest and fees, which can exceed the original loan amount.

• You can damage your credit score, as illegal loan apps may report your default or late payment to the credit bureaus, or they may prevent you from accessing other legitimate loan apps or financial services.

• You can expose your personal data, contacts, and social media accounts to hackers, fraudsters, or identity thieves, who can use them to steal your money, impersonate you, or blackmail you.

• You can face harassment, intimidation, or defamation, as illegal loan apps may send you threatening messages, call you repeatedly, contact your family and friends, publish your names and pictures on social media, or report you to law enforcement agencies.

• You can suffer from stress, anxiety, or depression, as illegal loan apps may cause you emotional distress, fear, or shame, and affect your mental health and well-being.

How to avoid illegal loan apps

The best way to avoid illegal loan apps is to do your research, compare your options, and verify the legitimacy and credibility of the loan apps before applying for a loan. Some of the steps you can take are:

• Check the list of approved loan apps by the FCCPC and the CBN, and avoid any loan app that is not on the list or that has been delisted or banned by the authorities.

• Read the loan agreement carefully, and look for any hidden fees, charges, or clauses that may be unfavorable or unfair to you.

• Review the loan app’s website, app store page, and social media accounts, and look for any red flags, such as lack of contact information, poor design, spelling errors, or suspicious links.

• Read the reviews, ratings, and feedback from other customers, and look for any positive or negative experiences, complaints, or recommendations.

• Ask questions, seek clarifications, or request for more information from the loan app’s customer service, and see how they respond, communicate, and address your concerns.

What are some of the popular lists of illegal loan apps in Nigeria?

According to the FCCPC, as of September 2023, there are 37 illegal loan apps that have been delisted and removed from the Google Play Store for violating the regulatory framework and guidelines for digital lending in Nigeria. Some of the popular list of illegal loan apps in Nigeria are:

• Hen Credit Loan App: This loan app offers loans ranging from N5,000 to N150,000, with interest rates from 24% to 36% per annum, and repayment terms from 91 to 365 days. However, this loan app is not registered, licensed, or authorized by the FCCPC or the CBN, and it has been accused of accessing the personal data and contacts of the borrowers, and sending them threatening messages and calls.

• Cash Door App: This loan app offers loans ranging from N2,000 to N100,000, with interest rates from 30% to 50% per annum, and repayment terms from 7 to 30 days. However, this loan app is not registered, licensed, or authorized by the FCCPC or the CBN, and it has been accused of imposing hidden fees, such as processing fees, service fees, and late payment fees, that are not disclosed upfront or in the loan agreement.

• Eaglecash App: This loan app offers loans ranging from N5,000 to N50,000, with interest rates from 36% to 60% per annum, and repayment terms from 14 to 30 days. However, this loan app is not registered, licensed, or authorized by the FCCPC or the CBN, and it has been accused of employing aggressive and abusive recovery methods, such as contacting the family and friends of the borrowers, publishing their names and pictures on social media, or reporting them to law enforcement agencies.

Conclusion

Illegal loan apps are online platforms that offer loans to Nigerians without complying with the regulatory framework and guidelines issued by the FCCPC and the CBN. These loan apps exploit unsuspecting borrowers with exorbitant interest rates, hidden fees, and unethical recovery methods. 

On this article, we have exposed some of the popular list of illegal loan apps in Nigeria, and how to avoid them. For more information and resources, you can visit the websites of the FCCPC, the CBN, or the NIBSS

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