How a Quick ₦50k Loan From an App Turned Into a ₦600k Nightmare

Told to golo. The writer asked to remain anonymous. Names and identifying details have been changed.

I want to be clear at the start that I understood interest. I have a degree in a numerate subject. I was not confused about what a percentage was. That is the part people get wrong about this, they assume you did not read.

I read. I just read it the way you read terms and conditions when you need the money on Thursday.

The first loan

Fifty thousand, fourteen days, and a fee that I remember thinking was steep but survivable. My salary was coming. The maths, on the day, was fine.

The salary came late. Not catastrophically, nine days late. But the loan did not have a concept of nine days late. It had a concept of default, and default had its own fee, and the fee compounded on a schedule I had genuinely not modelled because I had not expected to need to.

The second loan

This is the part I would go back and change.

I took a second loan, from a different app, to clear the first one. On paper it was refinancing. In practice I had turned one relationship into two, and the second one had worse terms because I took it in a hurry.

The thing nobody tells you is that the second loan always has worse terms than the first, because you take it under conditions the first loan created.

The calls

Around month four, they started calling my contacts.

Not me, my contacts. People I had listed as references, and then people I had not. I still do not know exactly how they got the second group. I know that a former colleague called me at work to ask, carefully and kindly, whether I was okay.

That call cost me more than any of the fees.

What the number actually was

By the time I finished, I had paid a little over six hundred thousand against an original fifty. I have the spreadsheet. I built it afterwards, which tells you something about when I started taking the maths seriously.

What I would tell you

1. The fee is not the cost. The cost is the fee plus what happens when one thing in your month goes wrong, and something always does.
2. Never take the second loan. Go to a person. It is more embarrassing and enormously cheaper.
3. Check what permissions the app asks for before you install it, not after they call your sister.
4. Write it down the day you borrow, the amount, the date, the total repayable. Not from memory. On paper.

I am out now. It took fourteen months and it is the single most expensive thing I have ever bought, and I did not buy anything.