Desperation can drive people to take extreme actions that they might not otherwise consider, and this includes taking a loan from loan sharks.
Loan sharks, the worst place or company to collect a loan especially if you’re in Nigeria.
In this post, I will explain the reasons why you should avoid taking loans from these loan sharks, especially if you are not sure that you will repay them in due time.
I know that it’s a lot easier to collect a loan from these loan sharks, which makes lots of people get loans from them, but honestly, for your peace of mind, you should avoid them entirely.
Let’s proceed to the reasons why you should avoid these loan apps.
Reasons to avoid loan sharks apps
Below are the reason to avoid loan sharks;
- They can be aggressive and uncivilized.
- They charge exorbitant interest rates.
- Illegal Practices.
- Loan sharks don’t offer consumer protections.
- Lack of transparency.
- Personal Safety Risks.
- Limited Financial Options.
- Damage to Credit Rating.
Now let me explain them one after the other.
1. They can be aggressive and uncivilized
This is one of the major reasons to avoid loan sharks; they can be very aggressive and uncivilized when you fail to repay the loan.
Loan sharks are known for using intimidation, threats, and even violence to collect debts. They may harass you or your family, causing immense stress and fear. Unlike legitimate lenders, they do not have to follow fair debt collection practices.
For Example.
If you fail to repay the loan in due time, they have access to your contacts, and what they will do is to start calling and texting your contacts that you’re a fraudster and a debtor.
Most times they use whatsapp to send multiple messages to your contacts tagging you a debtor and a fraudster with your picture attached to the message.
Also, they will even go ahead and call some of your contacts that you borrowed money from.
It would be so shameful if your boss in the office or your big uncles and aunties happened to see those messages or receive such calls. To make matters worse, they can send five messages or call up to three times a day.
It’s so depressing.
I’m saying this because this happened to a close family member of mine, and it really depressed the guy.
2. Illegal Practices
These loan sharks are purely illegal because many of them are not registered.
Not registered means they do not have a physical office or address where you can easily find them. Because they are not registered, they operate however they please.
Loan sharks operate outside the law, meaning they don’t follow the regulations that protect borrowers.
They may not provide clear terms or contracts, and they can change the terms of the loan at will, leaving you with no legal recourse.
3. Lack of transparency
Lack of transparency is another reason to avoid loan sharks.
There’s no transparency in their dealings, especially with the way they steal theur users contacts information without the consent of the user.
Aside from this, loan sharks often do not provide clear, written agreements especially the ones here in Nigeria.
This lack of transparency means you might not fully understand the terms of the loan, including the total amount you’ll need to repay and the timeline for repayment.
This usually causes many people to fall for their antics.
4. They charge exorbitant interest rates
Whenever I see the interest rates that these loan sharks are asking for, I laugh so hard, especially at those collecting the loans from them.
Exorbitantly high interest rates are the reason why many fail to repay the loan.
Because it’s so easy to get a loan from them compared to banks that require a guarantee, people ignore the interest attached to these loans and go ahead to collect loans from them.
But the issue will now be:
Can you repay the loan in due time?
If you fail to repay the loan, then you will understand why they are called loan sharks.
5. Loan sharks don’t offer consumer protections
Because loan sharks operate illegally, you have no consumer protections if something goes wrong.
If you have a dispute, there’s no regulator or ombudsman to turn to, leaving you vulnerable to exploitation.
As I mentioned, these loan sharks don’t have a physical office or address, nor do they have a customer service representative other than their uncivilized, unethical representative who harasses people and hurls insults at them.
If you have an issue you want to resolve, there’s nobody to call or send a message.
Even a proper email address they don’t have.
There are situations in which their users have repaid the loan, but they are still harassed unnecessarily.
6. Personal Safety Risks
Because loan sharks operate outside the law and they are not registered, often engage in criminal activity, dealing with them can pose a significant risk to your personal safety.
They might resort to violence or coercion to get what they want.
Yes you heard me.
However, I’m yet to see them action.
I’ve heard them make countless threats to call DSS, the police, or even soldiers on their loan defaulters, but I’m yet to see that happen.
Most times I see their threats as a big empty threat simply because they are thieves also.
7. Damage to Credit Rating
While loan sharks don’t usually report to credit bureaus, if you default and the debt becomes public or legal action is taken, it can severely damage your credit rating, affecting your ability to borrow from legitimate sources in the future.
8. Limited Financial Options
Once you take a loan from a shark, you may find it harder to access legitimate financial services. Reputable lenders may see your association with illegal lenders as a red flag, further limiting your financial options.
For these reasons, it’s important to avoid loan sharks apps and seek financial assistance from legal, reputable sources like banks, credit unions, or licensed lenders who operate within the bounds of the law and offer fair terms.
Don’t Miss:
When you defaulted
This is where the issue will arise when you default on paying the loan.
You will receive countless numbers of calls and text messages accompanied by insults and threats.
But;
Kindly ignore them.
I repeat this again: ignore their insults and threats, and better still, delete the app from your phone.
You can send text messages to your WhatsApp contacts to ignore their messages, and you can claim that they are scammers.
However, I recommend that you pay off the loan you took out before deleting the app from your phone.
Don’t give a damn about what they say or the threat they will issue to you because they are empty threats.
They will not do anything because they are not registered with the Central Bank.
Sometimes they will threaten to block your BVN, but I’m telling you that no loan app company can block your BVN.
All the insults and threats is to scare you or put fear into you so as to make you repay the loan you collected from them.
That’s all.
They won’t do anything.
Absolutely nothing.
However, it is good to repay the loan and move on with your life, although it is quite painful to repay the loan after all the insults and threats.
How to report a loan shark in Nigeria
The only way to report a loan shark in Nigeria is by using social media platforms such as Twitter and Facebook.
Also, you can use platforms like WhatsApp and YouTube to warn people about loan sharks.
Aside from using social media platforms, there are no means to report these loan sharks because they do not have a physical office or address.
Even the account number they are using is a third party’s account.
Because they are illegal and not registered with the Central Bank, it is quite difficult to report them, and this is why you should avoid unregistered loan apps in Nigeria.
Report a loan shark to police? I’m telling you that reporting them to the police will not yield anything because of the way the operate.
I say this from experience.
This is why you need to avoid them or better still ignore their threats and insults.
At the beginning of the post I stated that desperation for money can make someone collect loan from loan sharks apps because it’s way too easy to get a loan from them, but the truth is that they don’t worth your stress at all.
So these are the eight reasons to avoid loan shark apps, especially in Nigeria, if you value your sanity and self-respect.