If you find yourself unable to repay a loan from FairMoney, it’s important to understand the various repercussions and consider the available options to address the situation.
Consequences of Not Repaying a FairMoney Loan
- Additional Fees and Debt Accumulation: Late fees and interest on the outstanding balance will accrue, adding to the total amount you owe. FairMoney’s interest rates range from 2.5% to 30% per month, translating to annual percentage rates (APRs) of 30% to 260%. If you miss the repayment deadline, penalty fees ranging from 0.2% to 0.8% per day on the unpaid amount can be charged in addition to the current interest rate.
- Credit Score Impact: Non-payment or late payment of your loan will negatively impact your credit score. FairMoney may report your late payments to credit bureaus, lowering your score and making it more challenging to obtain future loans.
- Legal and Recovery Actions: In severe cases, FairMoney may take legal action to recover the debt, which could include putting a lien on your property or assets. This makes it difficult to sell or transfer ownership. Recovery agents may also be involved, who might use various means to recover the debt, including contacting you repeatedly or visiting your home or workplace.
- Blacklisting: You could be blacklisted, further impacting your ability to access credit from other lenders.
- Strained Relationships: Non-payment can strain your relationships with FairMoney and may also affect your relationships with guarantors or contacts who may be contacted regarding the unpaid loan.
Steps to Take If You Can’t Repay
- Contact FairMoney: The first step should be to contact the lender. They may work with you to find a solution, such as a modified payment plan.
- Explore Repayment Options: Some lenders offer repayment plans to help those struggling to make payments, designed to suit your financial circumstances.
- Seek Debt Counseling: Debt counseling can guide you on managing your finances and negotiating with your lender.
- Legal Remedies and Bankruptcy Options: In dire situations, explore legal remedies like filing a complaint with regulatory agencies or considering bankruptcy, though the latter should be a last resort due to its long-term impact.
Responsible Borrowing Considerations
Before taking a loan, it’s crucial to assess your financial capability to ensure you can meet your repayment obligations. Keep in mind the following:
- Evaluate Finances: Assess your financial situation for responsible borrowing.
- Plan Repayments: Align your repayment plan with your income and loan terms.
- Understand Interest Rates: Be aware of the loan’s interest rates and any hidden fees.
- Borrow Wisely: Only borrow what you need to avoid financial strain.
FairMoney provides loans ranging from ₦10,000 to ₦3,000,000 for Nigerian SMEs, with eligibility based on positive lending history and financial behavior.
The application process is streamlined through their mobile app, and maintaining positive loan repayment behavior can lead to increased loan amounts and longer tenures.
ALSO SEE: What Happens If I Don’t Pay Aella Credit?
Failing to repay a FairMoney loan can have serious consequences, including financial penalties, credit score impact, legal actions, and strained personal relationships. If you’re facing difficulties in repaying your loan, it’s crucial to communicate with FairMoney and explore possible solutions.
Responsible borrowing and timely repayment are key to avoiding these negative outcomes and maintaining a healthy financial profile.