Over the last few decades, there has been an increase in the number of loan platforms in Nigeria, from banks to private individuals.

To further make it easy for people, there has been an increase in the number of online banking and loan platforms which makes it easy for anyone to obtain a loan from any of his preferred platforms in a matter of minutes.

This, as an advantage, has equally been a source of disadvantage for so many people. With an increase in technology comes an increase in internet fraud; what this means is that a lot of people have fallen victim to online scammers, and we are here to address this issue through this article.

In this article, we will answer this burning question in the mind of anyone who wants to obtain a loan from any platform, especially as a newbie. We will answer some of the frequently asked questions and read through this article with rapt attention for a complete understanding to avoid falling victim.

Overview Of Nigerian Loan Companies

Before the last five decades, the number of loan platforms in the country was not much, and applying for and obtaining a loan from any available platform was usually an uphill task.

One of the reasons that made it difficult, then, is the fact that you must have collateral before you can obtain a loan from any platform. This makes the loan application process to be complicated, and only a selected few in the country have y ever applied and got approved.

However, as Nigeria advances in the race for technological advancement, there is a surge in businesses; what we mean is that there has been an increase in the number of companies over the last five decades.

Hence, there became a greater need for individuals to obtain loans from platforms to grow their businesses; this was the beginning of internet banking and loan platforms.

The government did not pay lip service to the needs of the people. Instead, the government did its best to establish a government-owned loan platform that gives any Nigerian the privilege to obtain a loan from the platform without needing collateral.

Individuals, too, started creating an online banking app approved by the Central Bank of Nigeria, which gives users access to obtain loans from the platform without the need for collateral. Over the years, there has been a significant advancement in the banking sector, such that you do not need to be there physically to obtain a loan or need collateral or paperwork to get a loan. This process has become one of the fastest ways of obtaining a loan.

If you apply and are successful, within a few minutes, your loan will be deposited into your bank account.

However, as in other countries, so is Nigeria; it didn’t take long before the process became corrupted; internet fraudsters found a way to lure people into paying them a tremendous amount of money as an upfront fee before they could be given a loan.

This has put fear in the minds of many people, and one of the most frequently asked questions of anyone who wants to borrow money from any loan platform, especially when it has to do with an online banking platform, is the question, “do loan companies ask for money upfront!” And in this article, we hope to answer this question satisfactorily. Stay tuned.

Do Nigerian Loan Companies Ask For Money Upfront? 

Having discussed the metamorphosis of the loan and banking sector over the last few decades, we need to answer this question satisfactorily.

If you want to obtain a loan from any online banking platform and you are asked to pay an upfront fee, have it in mind that the loan platform is a scam.

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Furthermore, one of the ways you can know if they are real is through the medium of payment and transactions, there are legitimate loan platforms that will ask you to pay an upfront fee, but they will not request a bank transfer. Instead, it will be included in your loan amount and subtracted when you pay back the amount you owe.

However, this is not the case for online scammers, and you should be on the lookout when any online loan platform asks you for an upfront payment; when they do, ask them for a medium of payment if they request gift cards or any other heinous medium of payment, bear it in mind that the loan platform is not legitimate and as such should be reported immediately.

Having answered this, by now, you will know how to spot a fake online platform through this process above, but note that some loan platforms require an upfront fee, but they usually include it in the amount of money you borrowed from the platform; this is a significant difference.

Tips On How To Use Credit The Right Way

  • The first thing you need to do before you think of applying for a loan through any of the banking sectors is to check your report and credit score. Your credit score is what will determine if you will be eligible to obtain money from any loan platform; this is why it is crucial to make sure that you have a high credit score.
  • The next thing you need to do is to find out the type of loan available and the amount you qualify for; you can do this by asking the loan service provider to make sure you take only the amount you can conveniently pay back at the agreed period.
  • Another notable mistake is that people do not think critically before obtaining a loan from any platform. That you are eligible to receive a loan does not mean you should; before you receive a loan from any loan platform, you must make sure that the reason behind the loan you wish to obtain from the platform is apt and that you can pay back within the agreed period.
  • Learn not to overuse credits and loans; what we mean is this, there are times you may be eligible to obtain more money from a loan platform, more than you need, be disciplined enough only to take that which you need for your business, this will enable you to pay back faster before the terms of the agreement ends.

Read through this part of this article well for a better understanding so as not the fall prey to internet fraudsters.

Frequently Asked Questions 

Do you pay an upfront fee for a loan?

You do not need to pay an upfront fee for a loan, in any occasion where you have to, the upfront fee will be added to the amount of loan you obtained from the platform.

An upfront fee is distinguished from a commitment fee and the interest rate paid on a loan.

What do banks look at before giving a loan?

There are two most important areas the bank looks at before giving you a loan, and they are your income and employment history.

They check your income to know if you can pay back the amount you wish to obtain from the platform, and they check your employment history to see if you are eligible for the loan you want to apply for on the platform. Income amount, stability, and type of income may all be considered.

What do I do if I get scammed by a loan company?

If you ever get scammed by any loan company online or offline, you can do the following;

  • Construct a narrative. Start by writing down your story.
  • Report the crime to the FTC.
  • File a complaint with the IC3 (Internet Crime Complaint Center).
  • File a complaint with the Consumer Financial Protection Bureau (CFPB). …
  • Call the Police.


Legit loan companies do not ask for upfront before issuing loans. Any company seeking an upfront is fake and a loan shark.

We believe that this article has been helpful to you. If you have any questions, feel free to use the comments section. We shall see to it.