6 Ways on How to Safeguard Yourself Against Personal Loan Scams in Nigeria


How to Safeguard Yourself Against Personal Loan Scams in Nigeria

Securing personal loans has become increasingly convenient in recent times, but alongside this convenience lurks potential risks for borrowers.

Unsuspecting individuals often fall victim to deceitful entities, making it crucial to remain vigilant. This article aims to shed light on various types of loan scams, enabling you to identify and evade them effectively.

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Types of Loan Scams:

How to Safeguard Yourself Against Personal Loan Scams in Nigeria

1. Online Lending Scams:

Some platforms masquerade as legitimate loan providers but intend to harvest applicants’ personal information for malicious purposes. This stolen data may be sold or exploited to access victims’ bank accounts, leading to significant financial harm.

2. Debt Relief Scam:

Fraudsters promise to assist businesses and individuals in settling large debts, granting them extended repayment periods. However, victims are required to pay upfront fees for this service. Once the fee is paid, the scammers vanish, leaving the victim in a worse situation.

3. Upfront Fee Scam:

While lenders may legitimately request insurance, origination, or loan processing fees, scammers often deceive people by collecting these fees and subsequently failing to provide the promised loan.

4. Imposter Scam:

Some criminals pose as lending institutions, tricking loan applicants into providing personal information. Armed with this data, the scammers secure loans in the victim’s name, leaving them burdened with substantial debt.

5. Full-Guarantee Scam:

Certain entities exploit desperate individuals with poor credit reports by promising guaranteed loans in exchange for upfront fees. Victims pay the fee, believing their application is assured, only to be defrauded.

6. Phishing Scam:

Scammers impersonate legitimate financial institutions, soliciting bank account details and security pins from potential borrowers who express interest in a loan. Sharing this information leads to fraudulent activities.


7. First Contact Scams:

Unsolicited loan offers that arrive via phone calls, SMS, or online platforms, without the applicant initiating the process, are red flags for potential scams.

How to Safeguard Yourself Against Personal Loan Scams in Nigeria

How to Safeguard Yourself Against Personal Loan Scams in Nigeria

Safety Measures Against Loan Scams:

1. Transparent Fees:

Request that any processing fees be deducted from the actual loan amount upon disbursement, rather than paying them upfront.

2. Pressure-Free Decisions:

Legitimate lenders won’t coerce you into taking a loan. Always demand clear terms and conditions, and be cautious of offers that seem too good to be true.

3. Credit History Verification:

Reputable financial institutions assess your credit history before approving loans. Promises of 100% approval rates, vague repayment terms, or reluctance to verify your credit report indicate potential scams.

4. Thorough Research:

Check online reviews and verify the legitimacy of the establishment before proceeding with a loan application.

5. Sensitive Information Protection:

Genuine lenders do not require sensitive details like ATM card information during the loan application process. Standard application information includes proof of identity, income, utility bills, and credit reports obtained from credit bureaus.

6. Registered Lenders:

Choose only registered lenders who are insured by the Nigeria Deposit Insurance Corporation (NDIC) and regulated by the Central Bank of Nigeria.


If you suspect involvement in a suspicious transaction, promptly report the issue to your bank and alert the Economic and Financial Crimes Commission (EFCC).

Vigilance and adherence to these precautions will shield you from falling prey to personal loan scams in Nigeria.

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I am a full-time blogger, an educationist and a digital marketer. I am the head of Editorial at Ebira Online Media.


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