TECHNOLOGY

Review: Fairmoney offers fast loans but with arbitrary interest rates

With the current economic realities, many Nigerians now depend on loans to survive. As dangerous as leaving on credit may be, it is life-sustaining for many who would have remained helpless while their payday was still a long way off. This is why the loan apps with their brutal recovery method are more like a necessary evil at this point.

In Nigeria, FairMoney today is one of the popular loan apps used by Nigerians to access direct loans without collateral. Fairmoney CEO Laurin Hainy made it clear that the app aims to provide a platform that ordinary citizens can use to fund their dreams and businesses to move up the ranks.

The app uses artificial intelligence to analyze your banking information and validate your BVN to make credit decisions based on your credit score. The loan is 100% online, no collateral is required and you can apply at any time and any day of the week.

In terms of design, the app is made to be easy for every user. The dashboard is simple and straightforward and navigating the app is also quite easy. Loan and repayment application can be made through simple quick steps.

FairMoney offers loans between N1500 and N500,000 with repayment periods from 61 days to 180 days at monthly interest rates ranging from 10% to 30%.

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The FairMoney app is undoubtedly one of the most used by Nigerians as it has been downloaded 5 million times and is still counting. But among these millions of downloads are customers who had to download the app and later remove it from their phone out of frustration or disappointment with the app.

Nairametrics spoke to some users of the app and here’s what they have to say about their experience with the app:

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What the users say

Olaleye Precious says her experience with the app was good at first, until she started noticing an increase in the amount she had to pay as interest on her loan. Asked about her experience with the app, she said, “What the app promised was that the sooner I pay back my loans, the better the credit score, which will also help me get a lower interest rate, but I’m not. I noticed that interest continues to rise after each loan, even though the loan is the same amount.”

For Samuel Ishola, his challenge with the app is the difficulty of linking his debit card to the app. “Every time I try to pair my verve card it doesn’t show up after all the many steps of entering all the many numbers on the card then they charge me N50 naira but it doesn’t pair. I cannot apply for a loan without linking my card. It’s really frustrating,” he says.

Olalekan Yusuf says the app has been great at providing instant loans, but he is unhappy that the app has not improved its loan status despite adhering to repayment deadlines. “I have to believe that if I pay back loans quickly, I’ll qualify for a higher amount of loan, but that hasn’t happened. I am still limited to an N10,000 loan despite not being in default. This is my only problem with the FairMoney app,” he said.

Google Play Store Reviews

In the app store, the app receives a mix of positive and negative reviews: Here’s what some users have to say about the app:

Obinna Ofodile: “The transaction speed on the app is good, but the interest on loans is too high. I got a loan of the same amount twice, the interest of the first was high and the interest of the second was even higher. I do not understand why. I also didn’t get a discount for early repayment of the loan as promised on the app.

James Divine: “Over 3 consecutive days I have sent and received over 25 emails linking my card. I enter my card details to link, but after following the process I get a message that my card is linked to a pending loan. I uninstalled and reinstalled the app a dozen times now still the same old story. I have successfully removed the card from my payment options. This would have been impossible if I really had a current loan. Disappointed!”

Sharon Akere: “FairMoney sends me regular text messages inviting me to apply for a loan and once I complete the details of my application I get an error saying “we have a problem now, please download a newer version to enjoy Our services”. I can’t count the number of times I’ve applied for a loan. This is really bad because I wonder why they can’t leave me alone. I keep getting invitations and eventually I can’t get a loan.”

Esosa Vincent: “The payment term is too short and the interest is too high and if you ask for an extension, you have to pay the renewal fee first before they extend your loan term, which is bad and annoying.”

Tomilola Ogunade: “Your app is great, but I’m a little disappointed because I repaid a loan of N30,000 with interest, making it 38,100 in a month and you reduced my next loan approval to N10,000. That is ridiculous. Meanwhile, the last loan I paid I was supposed to pay on August 8, but I paid you on July 29 only so that you could even reduce the loan to a ridiculous amount. That’s not fair.”

bottom line

The interest on the FairMoney app loan is undoubtedly high. However, given the high risk that the company also takes when extending loans to unsecured people and the high probability of default by the recipients, this may be justified. Limiting some people to a certain loan amount can also be a way to minimize the risks.

Nairametrics Review

Based on the user experience and our analysis of the app, we rate the FairMoney app with a 7 out of 10.

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