The problem with some loan app in Nigeria
Debt is a major issue for many Nigerians, and loan apps can sometimes take advantage of those who are struggling financially.
These apps may offer quick and easy loans, but one of the main problems is the high-interest rates charged by these loan apps, which can be as high as 20-30% per month.
This makes it difficult for borrowers to keep up with repayments and can lead to a cycle of debt that is difficult to escape.
Additionally, some loan apps have also been known to engage in aggressive debt collection practices, including calling and texting borrowers at all hours of the day and night.
If you are dealing with debt from an unethical loan app, here are some steps that can help you become debt-free.
Step 1: Do not pay debt with debt
Do not try to use a loan from another loan app to pay the debt. You are just digging yourself into more debt and just postposing the heartache that comes with it.
Step 2: Assess your debt
The first step to becoming debt-free is to assess the amount of debt you have. Make a list of all the loan apps you owe money to, including the interest rates and any late payment fees charged.
This will give you a clear picture of the total amount you owe and how much you’re paying in interest and fees.
Step 3: Seek help if needed
If you’re struggling to pay off your debt, don’t be afraid to seek help. Inform your family and trusted friends for support.
Do not let your ego stand in your way of keeping your word and paying your debt.
You can also seek help from external and professional sources such as debt counselors, financial advisors.
Step 4: Reduce your expenses
Create a list of all what you spend money on every month.
You will need to cut off expenses in some areas and reduce expenses in other areas.
Cut off expenses completely on any area that is not for business, work and health.
Reduce expenses in other areas where you can find a cheaper alternative.
After you get out of debt, you can continue your soft life enjoyment.
Doing this will give you a clear picture of where your money is going and how much you can afford to put towards paying off your debt.
Step 5: Create a budget and a debt payment plan
You have reduced your expenses and now you know how much extra money you have monthly.
The next thing to do is to create a budget; this is an important step in becoming debt-free. After that, create a plan on how much money you will put into repaying your debt per time.
Step 6: Negotiate with your Lenders
It’s important to negotiate with your lenders if you’re struggling to pay off your debt. This may come as a surprise but most of those lenders also want to get back at least some of their money.
Many loan apps in Nigeria are willing to work with borrowers to come up with a repayment plan that works for both parties.
Be honest about your financial situation and ask if they can reduce the interest rate or waive any fees. If they’re unwilling to negotiate, consider seeking the help of a financial advisor or debt counselor.
Step 7: Refuse to be bullied by debt collectors of loan apps
This tip is due to the menace of some loan apps and their unethical & unlawful practice all in the name of debt collection.
Do not let them bully you, they care more about not losing their money.
A simple google search will let you know that it is illegal for them to reveal your private information and smear your image all in the name of getting back their loan.
So if you have made the mistake of taking loans from these unethical loan apps, do these:
- Make it clear to them that you will pay, be calm and respectful even when they don’t reciprocate.
- State the date you plan to pay (be certain of this date).
- They will try to threaten you into paying before a particular day, let them know that if they take any action against you, then they would have terminated the contract between you and them, and you will no longer be liable to repay the loan.
- You may have to repeat yourself over and over no matter how many times they contact you in a day.
- Go directly and speak to the loan app’s customer care and state your term so they can inform their debt collectors to back off.
Step 8: Pay more than the minimum
Paying more than the minimum amount due each month is crucial when it comes to paying off debt.
By paying more than the minimum, you’ll be able to pay off your debt faster and reduce the amount of interest you’re paying. If you’re having trouble making the minimum payments, consider finding ways to increase your income or reduce your expenses.
Additional advice on how to avoid falling into debt
- Do not take loans you cannot repay
This is obvious but most people do not follow it. Before you collect any loan, have at least 3 means of paying back the loan before the deadline.
- Use Budgeting apps
They can help you track your expenses and savings. So use them. Even if you think you don’t need them, try them out first before you jump to that conclusion.
- Seek education about personal finance
Go online and search for financial education videos on Youtube, follow social media pages that teach you how to manage your personal finance.
And also subscribe to the Questergate blog so you can get financial education articles as we post them.
Conclusion
Becoming debt-free from unethical loan apps can be challenging, but it’s not impossible. You can take control of your finances and become debt-free by assessing your debt, negotiating with your lenders, creating a budget, paying more than the minimum and seeking help if needed.
By following these steps, you can improve your financial situation and live a more stress-free life.
Also remember to take proactive steps to avoid falling into debt again in the future.