How to spot fake loan apps – 5 Steps

Did you know that there are more fake loan apps out there than legit loan apps? This article will open your eyes to ways you can spot fake loan apps.

The uprising of digitalised finance within the economic sector of the Nigerian society has made the issue of accessing monetary loans a more easier and convenient opportunity for many. Though this can be attributed to the fast-paced systems of the modern world, many financially incapable Nigerians can now leverage this advancement to secure urgent loans to meet their immediate needs, emergencies and other unexpected contingencies.

Getting loans these days is just as easy as from a few clicks from a smartphone or any digital device which has made the number of loan apps to greatly increase and escalate within Nigeria, providing ready made credit facilities to the needy.

However as plentiful as many loan apps that we now have available, with the advent of loan apps being on a rampant increase, it is important to note that this prevalence comes with its own associated risks usually in the form of fake loan apps. Ranging from common issues of loan scams and fraudulent loan apps, the issue of fake loan apps is a great plague to the loan credit system.

Through sophisticated deceptive measures, these fake loan apps usually maim and exploit their unsuspecting loanees, causing them financial and intellectual identity loss and theft. Individuals who have fallen victim to these loan apps usually find it very difficult to regain their financial security as they usually fall into the traps of fake loan apps when they are at their most vulnerable, hence to effectively protect oneself and his finances, it is very important that one is able to identify these fraudulent, fake loan apps.

It is for this reason that this blog article has been written to provide an insightful knowledge that online users and all Nigerians alike can use to recognize and spot fake loan apps. This will be crucial to safeguarding your financial information from any fraudulent loan app activity. But before we proceed, let’s discuss what loan apps are.

What are loan apps?

Loan applications are mobile software that provides credit facilities to its users in such a way that users can easily apply for loans. These apps essentially solve the traditional problem that most people encounter, moving all the way to commercial and microfinance banks to secure loans using lengthy, not to mention stressful paperwork related processes that are necessary to validate these loans.

With the advent of loan apps, this hurdle has been significantly improved, with loan credit facilities easily available and accessible to all people, just as far as a click away from your mobile devices.

Though the hassle of paperwork and other documents required to secure traditional loans has been eliminated via loan apps, these apps still require that you provide your personal information which must be cross-referenced with necessary documentation to verify your identity. It is after the user’s Identity has been approved and verified that you can apply for any loans.

Key features of Loan apps.

1. Clear terms and conditions:

Legit and authentic loan apps usually state their contractual terms and conditions associated with any loan approval in a transparent manner. Key details such as interest rates, repayment terms and methods, loan amount, due date and other critical information should be well communicated to the user before the loan is approved for the right choice to be made.

2. Financial Regulatory compliance:

Loan apps are usually licensed, with their activities being adequately checked by relevant financial agencies to ensure they operate within the jurisdiction of the law. This will ensure that the loan applicant’s interests are being protected with their rights properly recognised and given to them. Credible loan apps usually bear certificates or licenses from these regulatory agencies on their websites and applications.

3. Top-notch security processes: A typical loan app should be able to provide and maintain good security measures via strong encryption and other related sophisticated methods to prevent data breaches and scams. Good loan apps usually display unique certifications that show their high level of data security. A typical example of this is the SSL-secure socket layer. And in other cases, loan apps can display their privacy policy to its users to inform them on how their data is being collected and protected.

4. Positive customer reviews and online ratings: Reliable apps, not just loan apps in this context, usually have a vast number of good, positive reviews from their users about the app’s functionality and its service. This provides good, qualitative insights regarding the performance and credibility of such applications.
So before you install a particular loan app, make sure to check the user reviews and ratings on the app store before you download. If it meets your satisfaction level, you can then proceed with the loan app.

What are fake loan apps?

Fake loan apps are malicious apps that imitate legitimate loan apps in appearance, but operate with the sole purpose of stealing personal and financial information, your money, and other resources. Some of these loan apps even go as far as mimicking credible and well recognised loan apps, borrowing people money and demanding large add-ons and interest rates that will greatly surpass what  would be charged on normal loans.

With the convenience that loan apps offer to people, seemingly increasing its users and customers base is what has attracted fraudulent scammers who create these fake loan apps to maim and exploit off unsuspecting targets.

They mainly target the ignorant folks or people struggling with urgent expenses and desperately need to make ends meet.

How to spot fake loan apps

Listed below are common signs that one can use to identify fake loan apps before one falls into their deceptive traps.

1. No proper licensing

It is very important to know that legitimate loan apps are usually registered and regulated first by the CBN- the Central Bank of Nigeria. So one should first check any potential loan app for the CBN logo before any transaction.

Fake loan apps usually operate without any prior licensing or registration from the government or its agencies. There are various financial agencies and authorities established by the government to monitor and track loan apps activities like the most notably, the Federal Competition and Consumer Protection Commission-FCCPC.

So always verify if the particular loan app is registered under such agencies before you proceed, as the absence of these licensing authorities simply signifies that the loan app is a fake.

2. Request for advance payments

Fake loan apps most commonly ask for upfront fees or processing charges for loans to be swiftly approved, which are usually extorted from unsuspecting victims. This is a rather distunguishing characteristic as legit loan apps never ask for any fee or charge before processing your loan. Rather than this, they remove any incurred fees from the loan amount or add it to the overall amount to be repaid, which is usually clearly stated for the users to know.

So, in the case that any loan app is requesting that you first pay a certain processing or registration fee before your loan can be processed, just conclude within yourself that it’s a scam.

3. Lack of physical offices or contact information

Another contrasting factor to note is that authentic loan apps usually provide a confirmable physical address, contact phone number, email address or a customer care representative’s line that can be easily contacted in case of any underlying issues or complaints.

Fake loan apps don’t usually want to be tracked for their malicious and dubious activities, hence they usually lack this contact information, or in some cases, they use fake, vague addresses and contact information which cannot be easily accessed. To address this issue, always ensure to verify the contact information you were provided with from alternative sources and in cases you were not provided, conclude it’s a fake loan app.

4. Unexpected Loan Offers

Most fake loan apps usually operate using pop-up ads, bearing offers of unrealistic amounts with seemingly no collateral. These loan offers are unsolicited and might suddenly pop up in ur emails, SMS, Facebook feed, and other social media. These fake loans are usually in most cases scams in disguise, with sophisticated phishing attempts to steal your data and information once you apply for these offers.

You should know that legitimate loan apps would never approach you with loan offers and things would rather be the other case around. Just know that is a juicy loan offer pops up, that seems too good to be true, it probably is and that’s a fake loan app.

5. Lack of a professional app layout and design

While this is not a pretty solid indicator of a whether a particular loan app is a scam or not, it however a feature worth mentioning as many fake websites usually have poorly designed templates for their apps. This is because they know that desperate people who need loans won’t put much attention on the site poorly designed or visible errors just because of their pressing need.

This is however in sharp contrast to legit loan apps who heavily invest in their app design and optimally improving their app user experience. Ranging from bad spellings, bad quality images, grammatical blunders, and non-functional links are common signs that the app is most likely a scam.
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Conclusion

We can now conclude from the above-written blog article that transparency and credibility are two key factors that most legitimate loan apps heavily prioritize regarding their investments. So as a Nigerian that is faced with some financial difficulties and wants to resort to loan apps, in your search for the ideal choice, you should know that being properly informed will help to keep you away from fake apps amongst the authentic ones.

Always insist on safe, well-detailed loans with a good repayment plan and interest rate before committing at all.  Choose wisely and always ascertain the validity of a loan app before you make use of it.

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