Here’s What Happens If Online Loan Is Not Paid In Nigeria

Online loans have become a popular means of accessing credit in Nigeria, particularly for individuals who may not have easy access to traditional banks or financial institutions. While online loans can provide quick and convenient access to funds, there are consequences to defaulting on these loans.

In this blog post, we will explore what happens if an online loan is not paid in Nigeria. We will discuss the legal implications, consequences on credit scores, and steps to take to avoid defaulting on online loans.


Legal Implications Of Defaulting On Online Loans In Nigeria

In Nigeria, defaulting on an online loan can result in legal action taken against the borrower. Most online loan providers have terms and conditions that state the consequences of defaulting on a loan. These terms typically state that if the borrower fails to repay the loan as agreed, legal action can be taken against them.

Online loan providers can use legal means to recover the money owed, such as seeking a court order to garnish the borrower’s wages, or by sending debt collectors after the borrower. Debt collectors can be aggressive in their pursuit of debt owed and may contact the borrower’s employer, family, and friends in an attempt to recover the debt.


In extreme cases, defaulting on an online loan can result in the borrower being arrested and charged with fraud. In Nigeria, fraudulent practices are taken seriously, and defaulting on a loan can be considered a fraudulent act.

Consequences On Credit Scores

Defaulting on an online loan can have severe consequences on the borrower’s credit score. Most online loan providers report to credit bureaus, and a missed payment or default will reflect negatively on the borrower’s credit report.


A low credit score can make it challenging to access credit in the future, as banks and financial institutions use credit scores to assess the creditworthiness of individuals. A low credit score can also result in higher interest rates for loans and credit cards.

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Steps To Take To Avoid Defaulting on Online Loans

To avoid defaulting on an online loan, there are several steps borrowers can take:

  1. Read the terms and conditions carefully: Before taking out an online loan, it is crucial to read the terms and conditions carefully. This will help the borrower understand the consequences of defaulting on the loan.
  2. Borrow what you can afford to repay: Borrowers should only borrow what they can afford to repay. Before taking out a loan, it is important to assess one’s finances and determine if the loan repayment is feasible.
  3. Communicate with the lender: If a borrower is unable to make a loan repayment, it is essential to communicate with the lender as soon as possible. Most lenders are willing to work out payment plans or extensions if the borrower is upfront about their financial situation.
  4. Budget and plan: Borrowers should budget and plan for loan repayments. This will ensure that loan repayments are not missed and that the borrower stays on track with their finances.

Related: 4 Latest Loan Apps In Nigeria (May,2023)


In conclusion, defaulting on an online loan in Nigeria can have severe consequences. It can result in legal action, negative impact on credit scores, and difficulty accessing credit in the future.

Borrowers must read the terms and conditions carefully, borrow only what they can afford to repay, communicate with the lender if necessary, and budget and plan for loan repayments to avoid defaulting on online loans.