Fake loan apps in Nigeria have become a major concern for individuals seeking financial assistance through digital means. Many Nigerians have been scammed by these fraudulent apps that deceived them into providing their personal and financial information.
In recent years, the number of loan apps that are not legit loan apps in Nigeria has increased, making it difficult for users to differentiate between genuine and fraudulent platforms.
The proliferation of fake loan apps in Nigeria is unsurprising, considering the country’s high demand for quick loans. Many Nigerians need financial assistance, and these fraudulent apps exploit this vulnerability.
They promise quick loans without collateral and offer attractive interest rates, which can be too good to be true. Unfortunately, most users fall prey to these fake loan apps and lose their hard-earned money. One of the reasons fake loan apps in Nigeria are thriving is the lack of proper regulation in the financial sector.
The Central Bank of Nigeria (CBN) has warned Nigerians to be cautious when using digital financial services and only to patronize licensed institutions. However, this warning seems to have fallen on deaf ears as many Nigerians continue to use these fake loan apps.
After carefully analysing the different loan apps in Nigeria, our Fintech experts have identified the fake from the authentic ones. This blog post will list fake loan apps in Nigeria and discuss how to identify them. We will also provide tips for protecting yourself from these fraudulent apps.
It is essential to be aware of the risks associated with fake loan apps in Nigeria and take necessary precautions to avoid being scammed.
List of Fake Loan Apps in Nigeria
- Kashkash
- Lioncash
- 9Credit
- Cash mall
- LCredit
- 9ja Cash
- Palmcash
- GoTocash
- Cash wallet
- Gocash
- GGmoney
- Naira plus
- Fast Money
- Ncash
- ForNaira
- Ease Cash
- Cash Lion
How to Identify Fake Loan Apps in Nigeria
Here are valuable tips for identifying fake loan apps in Nigeria and protecting yourself from their deceptive practices.
1. Abusive Collection Practices
Abusive collection practices are not only unethical but also illegal in Nigeria. Fake loan apps use these practices to scare their customers into making repayments, even when they cannot do so. The apps use methods such as sending threatening messages, making continuous phone calls, and even contacting family members and friends of the borrower. Gocash has a habit of sending threatening messages to borrowers who still need to pay back their loans, and they also take money from their ATM cards without saying how much.
This can have serious consequences for borrowers, including defamation of character, mental health issues such as anxiety and depression, and increased financial problems. A young man who fell victim to their traps said they sent messages to his boss calling him a fraud, which cost him his job.
In contrast, legitimate loan companies have clear guidelines for recovering loans from their customers. These companies are willing to provide flexible payment options to accommodate their needs.
This makes it highly important to be aware of the collection practices of loan apps before engaging their services.
2. Hidden Loan Conditions
Fake loan applications in Nigeria often use misleading marketing tactics and false promises to lure customers into taking out loans without fully disclosing the loan conditions. In their advertisements, they promise low-interest rates, longer repayment timelines, and many other things to entice customers but do not give the full terms and conditions.
They are notorious for hiding loan conditions in fine print, making it difficult for customers to understand the terms and conditions of the loan. Before using a loan app in Nigeria, understand the loan conditions and carefully read the fine print.
3. Unsecure Websites
Fake loan apps may use unsecured websites to cut corners and save costs on cybersecurity measures, which should be a red flag for users. To protect yourself, be sure to check that the website has a valid SSL certificate, which can be verified by looking for the “https” prefix in the website address and the lock icon in the browser’s address bar.
It is also a good practice to keep your device’s software up to date and use anti-virus software to prevent malware infections. It is important to note that using a loan app with an unsecured website could put your personal and financial information at risk.
4. No Regard for Solvency
Fake loan apps often offer loans without regard for the customer’s ability to repay. They may approve loans with high-interest rates and fees, knowing that the customer will not be able to repay the loan and use abusive collection practices to recover the funds.
While this may look enticing to customers and be less stressful, it can lead to financial distress for the customer, as well as damage to their credit score.
It is essential to use reputable loan apps that conduct proper checks to ensure the customer’s solvency and offer reasonable loans that can be repaid. This will help avoid falling into debt traps and financial difficulties caused by fraudulent loan apps.
5. Negative Customer Feedback
Negative customer feedback can reveal much about a loan app, including its reliability, customer service, and loan terms. When reviewing customer reviews, pay attention to users’ recurring complaints or issues. The customer feedback for the Nairaplus loan app is very bad; they have nothing good to say about it, that is why it is on this list.
If there are many complaints about hidden fees, unresponsive customer service, or threatening messages, it may indicate that the loan app is fake or unreliable.
6. The Loan Company is Unregistered
Legitimate loan companies are registered loan apps in Nigeria with the relevant regulatory authorities in Nigeria, such as the Central Bank of Nigeria or the Securities and Exchange Commission.
For example, Nigeria’s Ncash loan app and similar loan apps need to be registered, and there needs to be an official oversight. So, never take a loan not registered with the CBN and SEC.
7. Repayment Period
Fake loan apps in Nigeria often have a very short repayment period, like 24 hours, which is unrealistic for borrowers and puts undue pressure on customers to repay the loan within an unreasonable time frame. They prey on unsuspecting customers in desperate need of funds and pressure them into making hasty repayment decisions.
For example, the 9Credit loan app has strict rules for repaying loans. If you don’t pay on time or miss payments, you might have to pay extra money as a penalty. This can be tough for people who have money problems they didn’t expect. Also, the loan duration for Cash Lion app is only 7 days, and it comes with undisclosed fees as well.
Legit loan apps, on the other hand, typically offer a more flexible repayment schedule, taking into account the borrower’s income and ability to pay back the loan.
It’s important to note that while short-term loans with a quick repayment period do exist, they are often accompanied by very high interest rates and fees.
8. Unavailability on Google Play Store or App Store
Legitimate loan companies are available on Google Play Store and the App Store. On the other hand, fake loan apps are often never available on Play Store or App or have been removed from the fraudulent activities Store to avoid being regulated or for them to be taken down or blacklisted. GoCash loan app breaks both Nigerian lending rules and Google’s rules for lending apps, it is one of the loan apps that call your contacts in Nigeria.
9. Request for Sensitive Financial Information
Fake loan apps often request sensitive financial information such as bank account details, BVN, and ATM card information. Legitimate loan companies would never request such information from their customers.
This is, without a doubt, one of the primary indicators that cast doubt on the sincerity of the offer. When someone asks for your password or other sensitive information, it’s always suspicious.
A reliable financial institution will never request this type of information. It is best to delete the app and report it to the authorities if you receive a request like this.
10. Interest Rates
In Nigeria, fake loan apps charge insanely high-interest rates and fees that are unrealistic and unaffordable. These exorbitant rates given by the app to borrow money in Nigeria can trap unsuspecting borrowers into a cycle of debt, making it difficult for them to repay the loan. Just like the Kashkash loan app, it provides a wide range of interest rates for online loan apps in Nigeria, spanning from a minimum of 0.1% to a maximum of 30%. 9ja Cash also gives borrowers loans with high interest rates and not-so-great repayment periods.
Legitimate loan companies charge reasonable interest rates and fees that align with industry standards. These rates are fair and transparent and consider the borrower’s creditworthiness, loan amount, and repayment period. Before applying for a loan, compare the loan app’s interest rates and fees with those of other legitimate loan companies to ensure they are reasonable.
11. Lack of Proper License
Every legitimate lending institution must be accredited by either the National Information Technology Development Agency’s (NITDA) register of monitored businesses or the Central Bank of Nigeria’s (CBN) registration.
This reduces the chance of being exploited and expedites the detection of fraud attempts. Ensure the lending platform is listed as authorized in the Nigerian registry of financial agents. You can view the list of accredited financial institutions from the Central Bank of Nigeria.
12. No Valid Contact Information or Physical Address
The Fake loan apps in Nigeria often lack proper contact information or a physical address, making it difficult to reach them in case of any issues.
Legitimate loan companies have a physical address and contact information that customers can use to reach them.
Before applying for a loan, ensure that the loan app has a valid physical address and contact information that you can use to reach them in case of any issues.
What to Do When you Download a Fake Loan App
Immediately remove any fake loan apps you may have downloaded from your device. Along with changing any passwords you may have used on the app, you should also contact your bank to stop authorized payments.
What you should do if you downloaded a fake loan app is as follows:
1. Remove the application from your device.
2. Delete the email address used to register for the loan application.
3. Modify the passwords for any other accounts that might have been breached due to registering for the fake loan app.
4. Report the scam to the Nigerian Communications Commission and the police (NCC).
How To Stop Fake Loan Apps from Accessing Your Contact
Most loan applications, particularly fake ones, can be embarrassing and annoying. Some of them use violence and abuse to get their loans back. They threaten them after accessing your contact list. Some might even go so far as to criticize you and cause harm.
You should be cautious when granting apps access to your contact list and other personal data. Avoid downloading apps you are unsure of, and try to pay back your loan by the due date to prevent loan apps from accessing your contact information.
If you have already downloaded the app, you can use the instructions below to limit access to your contact list.
- Open the settings on your phone.
- Select Apps from the Settings menu.
- select “permissions”
- To remove permissions, select the loan app and,
- Pick Contacts from the permissions menu.
Features of Legit Loan Apps
With the rapid growth of the digital lending industry, it has become increasingly important to differentiate between trustworthy loan apps and those that may pose a risk to users’ financial security.
By understanding the essential features of reliable loan apps, you can make informed decisions and ensure a safe borrowing experience. These are the features of Legit loan apps:
- Registered and licensed by relevant authorities.
- Transparent terms and conditions.
- Secure application process.
- Quick approval turnaround.
- Reasonable interest rates.
- Diverse loan options.
- Responsible lending practices.
- Strong data privacy measures.
- Responsive customer support.
- No upfront fees.
- Flexible repayment options.
- Loan tracking features.
- Positive reviews and ratings.
- Potential physical presence.
- Compliance with regulations
Conclusion
In conclusion, identifying fake loan apps in Nigeria is essential to avoid falling victim to their fraudulent activities.
Following the tips outlined in this article, you can protect yourself from these unscrupulous loan apps and choose legitimate loan companies offering affordable loans and excellent customer service. Always remember to do your due diligence before.
Frequently Asked Question
Which loan app is the best in Nigeria?
Carbon is among Nigeria’s top loan apps, offering competitive interest rates, flexible terms, and additional financial services. It’s a popular choice for borrowers seeking reliable lending solutions.
Is Easy credit loan app a legit?
Yes Easy Credit ia a legit loan app, with more than a million downloads and a 4.0-star rating on the Google Play Store. Many online reviews are positive, suggesting it’s trustworthy. Additionally, it’s certified by the Central Bank of Nigeria (CBN), further enhancing its credibility.
Is Okash registered with CBN?
Yes, OKash is registered with the Central Bank of Nigeria (CBN). It is presented by Blue Ridge Microfinance Bank Limited, a financial institution duly licensed by the CBN. This registration ensures that OKash operates within the regulatory framework set by the CBN, enhancing its legitimacy as a personal loan platform for Nigerian mobile users.
Is Xcash loan app a scam?
No, the Xcash loan app is not a scam. It is described as a legitimate and reliable app that lends money to people. It operates within the framework of providing loans to users who meet the necessary requirements and follow the app’s instructions.
What happened to Lcredit loan app?
LCredit loan app was removed from the Google Play Store due to a decision made by Play Protect, an Android security system. Play Protect detected privacy infringement concerns associated with LCredit, including unauthorized access to users’ data and potential defamation. As a result, the app was taken down from the Google Play Store to protect users’ privacy and security.
