These apps give between N1,000 to even N500,000 some times depending on many factors: the micro loan company, the perceived credibility of the borrower, previous records (if any, if good or bad) and other factors. These micro loans are repayable within periods ranging from days to months. They are many times very useful, I must confess.
Meanwhile, these products have their pros and cons which you must be aware of before dealing with many of them.
THE PROS OF LOAN APPS
1. SPEED
This is the major advantage of these online quick loan apps. They do not waste time. The whole lending process can start and end within 2 minutes and you get the money in your account. The best benefit is that you get the money just right when you need it. Time value.
2. NIL COLLATERAL
This is the second major pro of the online quick loan apps. They give you money without blinking, or without asking for your car papers of property documents. It's collateral-free lending. The lending is based on perceived credibility, trust and character.
3. NIL GUARANTORS
Just like collaterals, guarantors stand to indemnify lenders that should in case a borrower defaults, they shall pay. Alas, these online quick loan apps do not demand for guarantors.
4. EASE AND SIMPLICITY
Unlike many of our traditional banks that demand for all forms of frustrating paperwork and cumbersome procedure, online quick loan apps use processes that are easy, fast and simple.
Some use simple apps you can install, while some others use USSD codes. Yet you get the funds as soon as possible.
5. RELIABILITY
You can be rest assured they will lend to you if you have a clean record.
THE CONS OF ONLINE QUICK LOANS
1. OUTRAGEOUS INTEREST RATES / TERMS
Trust me, many of these companies give loans at crazy interest rates that are unreasonable and are out of this world! Some charge as high as 100% per month. Seriously. But they do this with strategy. They give small amounts so people don't usually feel it. This is not good for the consumers. People still take them many times likely because of desperation, lack of alternative, and possibly the timeliness.
2. EXPOSURE TO SCAM / FRAUD
Patronising these apps exposes you to fraudsters who have saturated the market. According to a report posted on Bestnaija.ng Forum, a series of apps (now taken down) successfully defrauded hundreds of thousands of Nigerians after promising to disburse the micro loans but will not even after taking money as charges from their accounts. And in fact, these fraudsters keep sweeping the balances of victims after card details had been submitted in good faith. So, the risk is high.
3. INFORMATION THEFT AND MISMANAGEMENT
While patronising these apps, many information are requested from the applicants the safe handling of which is not guaranteed. Personally Identifying Data like date of birth, phone numbers, BVN, Card numbers etc are submitted. There's no guarantee that these data are safe. So it is not unlikely that victims fall to trap of identity theft, fraud and blackmail.
4. OUTRIGHTLY BLACKMAIL AND DEFAMATION
Up till now, many online loan apps will blackmail and defame their customers once they feel they are defaulting, even after a day. This is very bad. Even though the authority of the nation has termed this as unethical, many loan app companies still do it. This causes many emotional and reputational damages to the victim who may be struggling to repay on time.
This is EMERGENCY SITUATION because of the damage it does. In fact, I learnt of a victim who had financial issues and was pleading with the company to be patient, only for them to initiate defaming text and WhatsApp messages to all his contacts tagging him: CHRONIC FRAUDSTER, DEBTOR AND CRIMINAL. For not paying up as and when due.
The young man almost committed suicide.
5. UNAUTHORIZED AND/OR CRIMINAL ACCESS TO DATA
Well, many say they gave the consent, but that still doesn't make it right. Many of these loan apps will gain access to your entire address book, your messages and so on. These behaviours are harmful app behaviours. These data stolen are usable against any victim. So, beware!
The above list is far from complete. But the moral of the whole thing is:
WEIGH THE RISKS. COMPARE THE PROS AND THE CONS.
Then you can decide to patronise which ones.
Fact is: there are some that are good to patronise while some are no-go areas. Courtesy of azaland.com
In my next post, I will share a good list of them in each category. Stay tuned.
Feel free to react below. Share your opinions and experiences.
