Fintech lending in Nigeria is booming: by mid-2025, over ₦400 billion had been disbursed through digital loan platforms, reflecting a shift towards instant credit solutions and convenience. However, that convenience comes at a cost.

The Federal Competition and Consumer Protection Commission (FCCPC) received over 11,000 complaints between 2021 and 2023 related to harassment, data abuse, and unethical recovery practices by digital lenders. 

Here are five warning signs you should never ignore when borrowing from fintech apps.

What to flag:

• Looking beyond the advertised interest rate, hidden charges like processing fees, daily usage fees, or penalties for early repayment can make the real cost much higher.
• Fintech platforms sometimes compound interest daily, multiplying your debt quickly.

Always calculate the Annual Percentage Rate (APR) and ask for a breakdown of all fees before accepting the loan.

2. Unclear or Absurd Repayment Terms

What to flag:

• If repayment frequency (e.g., daily, weekly) is vague or confusing, that’s a warning sign.
• Watch out for incredibly short repayment windows (e.g., one week on a sizable loan), they can trap you into a cycle of borrowing.

Pro Tip: Ensure there’s a clear, manageable repayment plan and confirm whether you can repay early without penalty.

3. Aggressive Data Harvesting & Permissions

What to flag:

• Legitimate fintech apps only request necessary data. Avoid apps asking for full access to contacts, messages, or location, especially when not essential to the loan service.
• Some apps may access your microphone, gallery, or call logs, wandering into personal privacy risks.

Opt for apps that request minimal permissions: typically your ID, bank account or debit card info, and transaction history. 

4. Poor or Nonexistent Customer Support

What to flag:

• No physical address, no customer service number, or no response when you reach out,that’s not a good look.
• Watch for platforms where the chatbot or helpdesk rarely replies or gives vague, engine-generated answers.

Test customer support first, ask a question, note response time and clarity. If they can’t explain terms concisely, step back.

5. Wildly Generous Credit Limits & Dark Patterns

What to flag:

• If a new lender offers you an unrealistic limit early on, like ten times your application income, be cautious.
• Some apps use grading systems or incentives to make you borrow more than you need, leading to debt spirals.

 Start with the smallest, most manageable loan and only increase limits as trust and repayment reliability build.