How to check if a loan company is legitimate in Nigeria. There has been a tremendous quantum leap in science and technology. In the past, people usually did transactions and took loans physically from the bank or any loan platform, but things have changed.

There has been an influx of so many loan platforms, especially online, and if you do not know how to check if a loan company is legitimate, you’re most likely to fall prey to them.

This is why we have written this article. In this article, we will discuss extensively how to check if a loan company is legitimate, how to spot a fake loan company, and so much more. Please pay close attention to this article, and it may save your business tomorrow. Stay tuned.


It is evident that taking a loan from a platform is one of the best ways to grow your business, especially when there’s a lack of capital, but you must be careful when seeking a loan from all these platforms.

There are many scammers out there with well-organized loan platforms looking for desperate business owners, and if you fall prey to them, you will lose a lot of money.

We will discuss how to spot the fake ones and also how to spot the real ones, stay tuned; you will love this article.

Two Common Examples Of Loan Scams

There are two common types of loan scams you should watch out for. These two categories of loan scams embody all other categories, the two categories of loan scam are;

  • Advance Fee Loan Scams
  • Phishing Scams

Advance Fee Loan Scams

This is a type of loan scam where these scamming companies will promise you a loan but will require money upfront from you, telling you that they want to use it to pay for insurance or for you to demonstrate good faith.

Most times, they usually require that those payments be made through a gift card or prepaid card; this is to enable them to evade some of the cyber security operatives. They will usually ask you to read the card details over the phone.

Phishing Scams

This is a very cunning type of scam. In this scam, someone will try to get you to reveal sensitive and essential information about your bank card before they can give you the loan.

At some point, they may even ask you for critical business information, and when you give them, it will lead to identity theft. It would be best if you were very careful, especially when applying for a loan through an online platform.

How To Spot A Loan Scam

There are warning signs you should watch out for when trying to obtain a loan from any platform, and immediately you spot these signs, you are to stop all transactions and report them immediately. Some of the warning signs are;

  • Requires an upfront payment
  • Request personal and business information
  • Loan approval, regardless of credit
  • Excellent loan term for new and struggling businesses.

Requires An Upfront Payment

This is one of the red flags you should watch out for, and scammers usually insist that you send them upfront before you get your loan.

Sometimes even legitimate loan platforms may ask for upfront, but you should be wise enough to differentiate the two. Scammers usually ask you to pay by a method that is generally difficult to trace, such as a wire transfer or gift card.

Requests Personal and Business Information

This is a very tricky one, and this is because even legitimate loan companies usually ask you to provide some private information such as Social Security Number for a personal credit card or an Employee Identification Number or Taxpayer Identification number for a business credit check.

This makes it hard to differentiate legitimate loan platforms from intended scammers; whenever you’re asked to provide any of your personal and business information by any loan platform, make sure that you’re dealing with a legitimate loan platform. You can check this by checking their background history.

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Read TooList of Fake Loan Apps in Nigeria

Loan Approval Regardless Of Credit

This is something you should watch out for, and most scammers will say that your loan has been approved even if you have a bad credit score.

This is why you should be careful; even when your loan has been approved, make sure that you check your creditworthiness to know if you’re worthy of the loan you applied for; if you are not worthy, you will know immediately that they’re scammers and report them.

Excellent Loan Terms For New Or Struggling Businesses

It would be best if you watched out for this; most legitimate loan platforms require a certain number of business experience before you are eligible for a loan.

They will equally ask you about the background of your company and what you stand for before making consideration if you should be given the loan or not.

But for scammers, this is not so, and scammers will quickly tell you that they will give you any amount of loan you want even though your business is still new or struggling. It would be best if you watched out for this.

How To Check If A Loan Company Is Legitimate

Having discussed some of the ways to identify loan scams, it is pertinent to discuss how to check if a loan company is legit or not.

Stay tuned, and this is one of the most critical aspects of this article; you will learn a lot. Some of the ways to check if a loan company is legit are;

  • Checking for an online presence
  • Research their business location
  • Check with Better Business Bureau

Checking For An Online Presence

Before you do any business with any loan platform online, make sure you do a quick internet search of the company name, and check the news tab in Google to know if the company’s name has been mentioned in a news article before.

You can also check the domain name registration to see if the website has been registered; this will help you know whether it is legitimate. Check too if their security details are up to date, and never enter any personal information about you or your business on any website that is not secured.

Research The Business Location

This is very important; look at the website contact information and check if it has a physical address; you can check that address on Google maps; if you find it on the internet, this means that the company is legit, and you can go ahead and do business with them.

If you do not find it on Google maps, chances are that the loan platform is not legit.

Check With The Better Business Bureau

One of the ways to check if the loan platform you intend to work with is legit is to check the Better Business Bureau website, and this will enable you to learn more about the loan platform, how long they have been in existence, and how well they have served the public, you can then base your judgment on these findings.

Having discussed this, the next thing we have to discuss is some of the most frequently asked questions people may have in mind

Frequently Asked Questions

Who is at risk of a loan scam?

The thing is this, the more desperate you are to get rich quickly, the chances are that you will be scammed easily. You will need to be very careful, especially if you’re looking for any of these;

  • A debt consolidation loan because you are falling behind,
  • A bad credit loan because your credit history is not good,
  • A large loan amount with minimal qualifications, or
  • A business loan even though multiple lenders have turned you down.

Do loan companies ask for money upfront?

Some loan lenders charge an upfront fee which is called an origination fee, before they can process your loan. Legitimate loan lenders don’t ask you to pay the fee directly before you can get access to your money.

Do loan companies check your bank account?

Loan companies do not have any business with your bank account. Any company that requests to check your bank account during the terms of the agreement is likely to be a scam, don’t fall for it.


The same way legitimate loan platforms are providing financial aid to individuals and businesses is the same way wolves are parading themselves as fintech companies.

We carefully outlined how to fish them out in this article and we are confident that you can do that. Meanwhile, feel free to ask your questions in the comments section.