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In today’s Nigeria, many people are turning to loan apps and digital lenders to make ends meet. But getting a loan without collateral is still a huge challenge, especially with rising inflation, stagnant incomes, and increasing financial pressure. Here we will discuss the real issues behind borrowing, loan repayments, harassment, and financial literacy.
Survival vs. Strategy: Why most Nigerians are borrowing now
Nigeria’s economy is struggling, and People are now borrowing just to survive, not to grow.” The rise in food prices, cost of living, and fuel expenses has left many Nigerians with little or no savings. As a result, families borrow to pay school fees, rent, and even buy food.
Rather than borrowing to expand businesses or build assets, many people are using loans as a means of survival — a dangerous trend that traps them in cycles of debt.
Why loan repayment is getting harder
As business owners face low profits and employees earn stagnant salaries, repaying loans is becoming harder. Some borrowers even take new loans to repay old ones — a trap that eventually leads to default.
It is recommended to try other income strategies before taking a loan again.”
Borrowing Culture in Nigeria
Unlike Western countries, where borrowing is common and credit scores are normal, Nigeria still sees loans as shameful. Many people borrow in silence and fall into guilt or even depression when they can’t repay.
This emotional burden pushes some people toward betting or gambling in hopes of ‘flipping’ the money quickly. Unfortunately, this often leads to bigger losses.
Loan Harassment and Data Privacy Risks
We’ve all heard the horror stories: borrowers being called out to their contacts, harassed, or threatened when they default. This practise is not just unethical — it’s illegal.”
Some loan apps demand access to your phone’s contacts, photos, and files. When you accept, they can use this information to shame you publicly. Nigerian regulatory bodies like the FCCPC and NDPR are working to stop this, but awareness is still low.
See Also: How to Delete Your Data from Loan Apps on iPhone and Android
Poor Financial Literacy
A major issue is that many Nigerians don’t understand how loans work. They take loans for lifestyle expenses — like weddings, gadgets, or vacations — instead of using them for income-generating opportunities.
“If you earn N200k, don’t live a N300k lifestyle, Budgeting, saving, and borrowing responsibly are habits we all need to learn.
Understand Interest Rates Before You Borrow
Some loan apps charge crazy interest rates and hide their repayment terms. Borrowers only realize the cost after they’ve already spent the money.
Before taking any loan:
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Read the terms and conditions carefully.
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Know the tenor (how long you have to repay).
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Understand the interest rate and whether it’s flat or compound.
Don’t be in a hurry — always ask questions.
See also: How to Identify Loan Scams: 5 Red Flags You Should Never Ignore
Are Salary Earners or Business Owners More Favored?
Many lenders prefer salaried workers because they have steady income and can repay through payroll deductions.
“When you support a small business, you’re supporting a family, maybe even a community.”
Red Flags to Watch Out For
Before downloading any loan app, check for:
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FCCPC approval (visit fccpc.gov.ng)
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Transparency of loan terms
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Data privacy policies
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Reviews from other users
Avoid apps that ask for access to your contacts or gallery before you even get a loan offer.
Read more: List of Loan Apps Approved by CBN
Conclusion
Loans can be powerful tools — if used wisely. But in Nigeria’s current climate, borrowing without collateral comes with risks. Understand the terms, avoid shady apps, and borrow only what you can repay.
FAQs
Can I get a loan in Nigeria without collateral?
Yes, many digital lenders offer loans without collateral using alternative credit scoring methods.
Which loan apps are safe to use in Nigeria?
Use only FCCPC-approved apps with clear terms and no access to sensitive data. FairMoney, and Branch are examples.
What if I can’t repay my loan on time?
Contact your lender immediately. Many offer loan restructuring or short grace periods.
How can I avoid loan harassment?
Never use unregistered apps or allow access to your contacts. Always check if the app is FCCPC-approved.
Why is financial literacy important before taking a loan?
Understanding how interest, repayment schedules, and loan terms work helps you avoid debt traps and use loans for growth.
