Is loan shark legal in Nigeria?

Asked by: Green Jast I  |  Last update: December 22, 2022
Score: 4.5/5 (27 votes)

They are not only loan sharks in Nigeria, they are also illegal fake loan apps which most of them have been banned by Nigerian authorities, Google Play Store, Apps Store, but somwhow most of them still find a way to lure unsuspecting borrowers into their loan trap net and at the end shame and defame them.

What do loan sharks do if you don't pay?

Loan sharks may use intimidation and force if you don't pay back the loan, which authorised lenders would never do. This could be in-person or online via threatening messages, for example. Your loan never gets paid off.

Is it a crime to borrow from loan shark?

If you've borrowed money from a loan shark, the most important things to remember are: You've not done anything illegal and you won't get in trouble with the police. It's illegal to lend money without a licence, but it's not illegal to borrow money from a loan shark. You don't have to pay the money back.

What happens if online loan is not paid in Nigeria?

Failure to pay back a loan could result in court charges in Nigeria, but not much is known about this: and for good reasons. Loan defaulting is a civil matter and not a criminal offence, so you typically won't go to jail for defaulting on a loan.

Are loan sharks licensed?

They're unlicensed moneylenders who charge very high interest rates and sometimes use threats and violence to frighten people who can't pay back their loan.

How Nigerian loan sharks cyberbully and trap customer in debt

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What happens if you don't pay a loan?

However, if a loan continues to go unpaid, expect late fees or penalties, wage garnishment, as well as a drop in your credit score; even a single missed payment could lead to a 40 to 80 point drop. With time, a lender might send your delinquent account to a collections agency to force you to pay it back.

What happens if you loan someone money and they don't pay back?

If the person you loaned money to is financially unable to pay and can prove it (whether through bankruptcy or a record of other financial problems), you may be able to write the unpaid debt off as an expense on your taxes. According to the Internal Revenue Service (IRS), this is called a bad debt deduction.

Can loan apps block my BVN?

A loan app cannot 'BLOCK' your BVN, they can only prevent you from getting further loans from their platform or getting loans from other loan app.

How do I stop loan apps accessing my contacts in Nigeria?

Please kindly go to settings in your android phone, click on app & notifications. Scroll down to app permission and deny them access to your contacts, sms, photo gallery and storages on your phone, they won't be able to reach out to your contacts anymore or post your pictures.

Can loan app access my contacts if uninstalled?

Can a loan app access my contacts if uninstalled? A loan app cannot access your contact list if you already uninstalled the app from your phone. However it's likely your contacts have been downloaded and stored in the app's database outside your phone if you ever collected a loan from them.

How do I fight loan shark harassment?

How Do I Avoid Loan Sharks and Illegal Lenders in the First Place?
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How to Fight Loan Shark Harassment?
  1. Do not make any further payments to the loan shark.
  2. Secure your personal information if you've given them to loan sharks.
  3. Report the loan sharks to the authorities.
  4. Do not give in to the loan shark's threats.

Can I report a loan shark?

Loan sharks prey on desperate people and their activities must be reported. If you wish to lodge a complaint, you need to complete Form 29. This is available on the website ncr.org.za. You can also get one by emailing [email protected] or by calling 011 554 2700.

What happens when you don't pay online loans?

Non-payment of loans simply equals to lower credit scores, which will eventually disqualify you from making any secured loans in the future. If your loans reach a default, expect to get really bad credit scores that will also disqualify you of any financial assistance when you most need it.

How much does a loan shark charge?

How Much Do Loan Sharks Charge? Loan shark interest rates are extremely high, sometimes up to 300-400% interest on the loan. For example, if you were to obtain a Merchant Cash Advance (MCA) of $40,000, you may be presented with a payment breakdown of $16,000 in interest and fees (aka a factor rate of 1.4).

Where do loan sharks get their money?

Key Takeaways. Loan sharks lend money at extremely high interest rates and often use threats of violence to collect debts. They are often members of organized crime syndicates.

Can loan apps access my gallery?

It is advised to avoid taking loans from these applications as they charge 30% to 35% rate of interest per annum and also harass borrowers by way of taking access to their contacts/photos/gallery and sending messages to people known to them.

Does Fairmoney send messages to your contacts?

You can enable or disable access to this information at any time, through Your Device settings. **We will NEVER communicate with any person from your contact list.

Can I go to jail for not paying online loans?

2. Can you be arrested and sent to jail if you fail to pay your debt? Many borrowers default on a loan every day, and the common question they ask is whether nonpayment of the loan will result in imprisonment. The answer is no.

Can CBN block my BVN?

Can BVN be blocked? The CBN can decide to blacklist or block an individual's BVN if the agency discovers illegal transactions or reports from credible sources of the account's involvement in fraudulent activities.

How can I block my FairMoney account?

Such Users can notice their wish to delete the information from FairMoney account by sending an email to [email protected]. However the User who has availed or loan is approved from any of our lending partners, then the User account information cannot be deleted.

Can someone go to jail because of debt?

Can a person be imprisoned by non-payment of debt? Put in simple words, no person can be compelled to pay debt by threatening the latter with the filing of criminal actions. Suits arising from non-payment of debts are only civil in character which cannot be a ground for criminal action.

What to do if someone refuses to pay you back?

CIVIL SUIT: The lender can file a civil suit for recovering the money he owed through promissory note or loan agreement. He can do so under Order 37 of CPC which allows the lender to file a summary suit. He can file this suit in any high court, City Civil Court, Magistrate Court, Small Causes Court.

What can you do if someone owes you money and refuses to pay?

Write to the debtor and ask for your money. Get an order from the court to take part of the debtor's wages or money from their bank account. This is called garnishment . Get an order from the court to take or sell the debtor's personal property or land.