Can you go to jail for not paying a personal loan in Nigeria?

Asked by: Ms. Coralie Lehner  |  Last update: September 25, 2022
Score: 4.1/5 (63 votes)

Loan defaulting is a civil matter and not a criminal offence, so you typically won't go to jail for defaulting on a loan. But there's a chance of that happening, especially if the court finds that you're willfully refusing to pay. Lying when getting a loan could be termed fraud, which is a criminal offense.

Can someone be jailed for debt in Nigeria?

It is illegal and unconstitutional to involve the Police in recovering debts. The Nigerian Police Act contains the duties of the police and at no point did it saddle them with the responsibility of arresting a debtor on the instruction of a creditor, when the debtor fails to liquidate his debts.

What happens if I don't pay my loan in Nigeria?

Aside from confiscating your collateral, your name will be blacklisted and sent to regulatory bodies like CBN and the Credit Bureau. You will no longer be able to take other loans or take on most government responsibilities. Your credit score will also plunge.

What happens if you default on a loan in Nigeria?

Also, if the creditor gets a judgment against you, it can result in your tax refund or wages being garnished. For some types of loans, defaulting can result in you becoming ineligible for any other loans.

What legally action can be taken if loan is not paid?

Breach of contract when it comes to loan repayment itself is not a crime but lenders can approach a civil court in order to recover the same. If a loan has not been repaid for more than 180 days, the lender is allowed to file a case against the borrower under Section 138 of the Negotiable Instruments Act of 1881.

Can I go to jail for not paying a personal loan in India | personal loan court case

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What is the punishment for personal loan defaulters?

Personal loan defaulters will be acquitted under section 420 of the India Penal Code, i.e. Life Imprisonment. This will have a negative impact on the credit history and hamper the ability to apply for a personal loan in the future. The best option is to avert default payments by maintaining emergency funds.

Can you be jailed for not paying loan?

2. Can you be arrested and sent to jail if you fail to pay your debt? Many borrowers default on a loan every day, and the common question they ask is whether nonpayment of the loan will result in imprisonment. The answer is no.

Can loan apps block my BVN?

So can a loan app block your BVN for not repaying your loan? technically the answer is no. Only the CBN can blacklist your BVN in cases were you seriously violated the country's laws.

What happens if you don't pay back a personal loan in Nigeria?

Failure to pay back a loan could result in court charges in Nigeria, but not much is known about this: and for good reasons. Loan defaulting is a civil matter and not a criminal offence, so you typically won't go to jail for defaulting on a loan.

How do I stop loan company calls in Nigeria?

To do this, simply scroll down to app permission and stop loan apps from accessing your contacts, sms, photo gallery and storages on your phone, they won't be able to reach out to your contacts anymore or post your pictures. They would only have your number and have only you to deal with.

Can loan apps track you?

Can loan apps come to my house? A loan app cannot come to your house. However if you already downloaded their app and collected their loan, they can access your contact list, databases, BVN, profile details and can report you to the credit bureau and blacklist your name against your BVN if you default on your loan.

Is loan default a criminal offence in Nigeria?

There is no place in Nigeria, where owing debt is a crime. Even, owing and refusing to pay is not a crime. While this may be rude, immoral, sinful and uncivilised, it is not yet a crime in Nigeria. It is not criminal rather civil in nature and can only be taken to civil courts and other dispute resolution platforms.

Can BVN be blacklisted?

As important as this number is, some citizens can run into trouble with theirs, either as a result of some of their actions or through no fault of theirs – their BVN can be blacklisted.

Is police a debt recovery agent?

In addition, several courts have ruled that the police are not debt collectors and should not be involved in activities that involve debt recovery. For instance, in the case of McLaren & Ors V Jennings (2002), the appeal court ruled that debt collection is not part of the duties to the police.

How long can they chase you for debt?

For most debts, the time limit is 6 years since you last wrote to them or made a payment. The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

How can I get out of debt in Nigeria?

10 Ways to Get Out of Debt Faster in Nigeria
  1. Create a Debt Payment Plan. ...
  2. Don't take on Any More Debt. ...
  3. Pay More Than the Minimum. ...
  4. Create an Emergency Fund. ...
  5. Live on a Bare Bones Budget. ...
  6. Avoid Debt Settlement Organisations. ...
  7. Negotiate a Lower Interest Rate with Your Bank. ...
  8. Be Accountable to Someone Else.

Does Fairmoney send messages to your contacts?

You can enable or disable access to this information at any time, through Your Device settings. **We will NEVER communicate with any person from your contact list.

What happens if we are not able to pay personal loan?

When a loan becomes NPA? When dues are not paid for more than 90 days. After this, bank will have to issue you a '60 day notice' under SARFAESI Act. In this notice period, the loan defaulter can payback the dues and close the case.

What happens if you don't pay back a personal loan?

Defaulting on a personal loan could result in:

Trouble securing credit in any form for years to come. Difficulty locking in a good interest rate even if you're able to secure credit in the future. Wage garnishment, if the loan was unsecured. Seizure of assets, if the loan was secured.

Can loan apps access my gallery?

It is advised to avoid taking loans from these applications as they charge 30% to 35% rate of interest per annum and also harass borrowers by way of taking access to their contacts/photos/gallery and sending messages to people known to them.

Can CBN block my BVN?

Can BVN be blocked? The CBN can decide to blacklist or block an individual's BVN if the agency discovers illegal transactions or reports from credible sources of the account's involvement in fraudulent activities.

Can debt collectors take you to court?

Debt collection agencies may take you to court on behalf of a creditor if they have been unable to contact you in their attempts to recover a debt. Before being threatened by court action, the debt collection agency must have first sent you a warning letter.

What happens if you ignore debt collectors?

Ignoring or avoiding the debt collector may cause the debt collector to use other methods to try to collect the debt, including a lawsuit against you. If you are unable to come to an agreement with a debt collector, you may want to contact an attorney who can provide you with legal advice about your situation.

Can a loan company threaten you?

Even if you do, debt collectors aren't allowed to threaten, harass, or publicly shame you. You can order them to stop contacting you.