For some reasons, most people in Nigeria now prefer to use loan app without credit check because of some personal reasons well known to them.
Nevertheless, using a loan app without credit check has both negative and positive impact on the borrower and sometimes, the negative impact might overweigh the positive impact.
So in this article, we will take time to explain what credit check is, why it is necessary, why you should always allow or disallow it, and the legit loan apps in Nigeria that don’t do credit check.
At the end of reading this, you’ll get to know:
- What no credit check loan apps mean to borrowers
- How loan apps approve loans without Credit Bureau checks
- Top loan apps in Nigeria that don’t require credit check
- Basic requirements for no credit check loans
- Pros and cons of borrowing without credit check
- Risks and hidden dangers to watch out for
- How such apps secretly assess your profile risk without you knowing
- What happens if you default on a no credit check loan
- Whether you should use no credit check loan apps
Understanding What Credit Check is?
A credit check is a an automatic tech system that lending companies use to checks your borrowing history with Nigerian Credit Bureaus to decide if you qualify for a loan or not.
When a credit check is run on your profile, all details about how you handled your past loans and bills will be retrieved from your credit history from Credit Bureaus like CRC, FirstCentral, or CIBN.
The major CBN licensed Credit Bureaus in Nigeria that most loan apps use include:
- CRC Credit Bureau Limited
- FirstCentral Credit Bureau Limited
- CreditRegistry Credit Bureau Limited
Information that loan apps check when running a credit check on your profile include the following:
- Past loans behaviours
- Loan repayment history
- Current outstanding debts
- History of defaults or late payments
- Your Credit score rating
- Check your BVN (Bank Verification Number) records across all banks
Why do loan apps do credit check?
The main purpose for checking credit score is to know if you use to pay back your loans on time. Good repayment record is equal to fast access to loan, fast approval and higher loan amounts.
Bad loan record will likely lead to rejection or smaller loans. Other purposes for checking your credit score include:
- Setting your interest rate (usually follows the pattern of – the better your score the lower the interest)
- Deciding your loan limit (the maximum amount you can borrow as a first loan)
- Determine the best repayment tenure for you
- Reducing collateral or guarantor needs
- Flagging fraud risk profiles (multiple applications on so many loan apps could be flagged and triggers rejection)
- Deciding debt recovery approach
How Do Loan Apps Approve Loans Without Credit Checks?
Loan apps without credit check loans usually skip the Credit Bureau review and use other information like your phone data, BVN activity, and bank data to determine your creditworthiness.
Why No Credit Check Loan Apps Could Favour you
Like we said earlier, using a loan app without credit check has both negative and positive sides, some of the positive side of it include:
- Access to loans even with bad loan records
- You bypass Credit Bureau blacklists if you had bad loan history
- Suitable for first-time borrowers with no credit history
- Past debts stay private
- No credit score damage if your loan application is rejected
- Chance to rebuild trust if you have previously defaulted
- You can borrow from multiple apps at once without being exposed for too much borrowing
Bad side of using No Credit Check Loan Apps
Most loan apps that don’t require credit check have outrageously operational policies and using them could expose you to:
- Extremely high interest rates
- Very short repayment tenure (usually 7-14 days)
- Harassment and threats from recovery agents.
- Unauthorized access to phone data and gallery.
- Hidden charges and processing fees.
- Loan disbursement without your consent.
- Aggressive debt recovery practices
- Risk of data theft and identity fraud.
- Cycle of debt from rollover loans.
- Illegal interest compounding.
- No legal protection if terms are violated.
Are they loan apps in Nigeria that don’t credit check
Yes, there are loan apps in Nigeria that don’t require credit checks. Most of such loan apps depend on phone data, bank inflow, or NIN/BVN verification for cross checking profile instead of Credit Bureau history.
Top Loan Apps in Nigeria That Don’t Require Credit Check
All legal loan apps in Nigeria require BVN verification due to CBN/FCCPC rules. Below are few loan apps in Nigeria that may not credit check for first time borrowing which is usually a small amount:
1. QuickCheck
- Phone data analysis
- Bank transaction history
- Identity verification
2. Branch
- NIN verification
- Phone data
- BVN verification
3. Okash and Easemoni (via Opay)
- Opay transaction history
- Bank account transaction history
- Phone number verification
- Device data
4. Aella Credit
- Bank account verification
- Debit card linking
- Grant permission to phone data access
5. KiaKia
- Peer-to-peer risk scoring
- Bank statement analysis
- Phone number verification
- BVN verification
6. Eyowo
- Phone number verification
- Wallet transaction history
- BVN verification
Other Requirements for No Credit Check Loans
Note that all legal lenders in Nigeria are required by CBN and FCCPC to fulfil some initial checks before offering loans to borrowers. Although they may not credit check you, you will still need the following to access their loan packages:
- You must be above 18 years old
- Your loan account must be BVN and NIN verified
- Complete KYC verification
- Verified phone number
- Pass Facial Verification
- Link a bank account with good transaction history
- Financial history showing financial inflows and outflows
- Permission to access your phone data, contact, location, media, etc.
Conclusion
Using loans without credit check could help you to bypass the Credit Bureau creditworthiness check especially if you are owning other loan apps but that doesn’t mean you can get a loan and refuse to repay and go free forever.
While these apps may not have the need to check your creditworthiness on Credit Bureau they still have other legitimate and legal way to trace your financial activities to determine whether you are worthy for a loan or not.
On the negative side, people who use such apps may never build a good credit score. Also, if you default on a loan app that doesn’t do credit check, the app can still report you to Credit Bureau.
So using a loan app without credit check should be for convenience and not an attempt to trick the lending system to take loans without repayment while piling up bad credit score for yourself in the future.
See Also:
Note: even if you borrow from loan app without credit check, the loan app can still report you and implement:
- BVN enforcement on repayment.
- Debt reporting to Credit Bureaus.
- Income verification checks
- Identity check
- KYC verification
- Official recovery channels.
So borrow wisely and borrow what you can afford to repay.
