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What are the risks and issues that need to be noted for loan applications without BVN?

In Nigeria, the Bank Verification Number (BVN) is a unique identifier that has become an essential requirement for accessing financial services. It is a biometric authentication system that connects all bank accounts owned by an individual or company. However, some loan application processes do not require borrowers to provide their BVN. This article explores the risks and issues associated with applying for loans without BVN.

Risk of Identity Theft

Without a BVN, lenders cannot authenticate the identity of the borrower. This situation presents a significant risk of identity theft since anyone can use another person’s details to apply for a loan. Fraudsters can use stolen identities to obtain loans, leaving the real owners of the information to face debt recovery efforts.

Higher Interest Rates

Loan applications without BVN usually attract higher interest rates than those that require it. This is because without BVN, lenders cannot verify the borrower’s credit history, which increases their perceived risk. The lender may impose higher interest rates to offset that risk.

LairaPlus Loan App

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In Nigeria    V1.0.1.2

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Limited Loan Amounts

Another issue that results from a lack of BVN is the limited amount of credit available to borrowers. Lenders may be hesitant to offer large amounts of money without being able to verify the borrower’s identity and creditworthiness.

Difficulty in Recovery Efforts

If a borrower defaults on a loan obtained without BVN, it may be challenging for the lender to recover the funds. Without BVN, the lender cannot track down the borrower’s other bank accounts or assets. This makes it difficult to enforce debt recovery measures.

Legal Implications

Lending without BVN is considered illegal in Nigeria. Both the borrower and the lender can be charged with an offense and face legal implications. If a borrower defaults on a loan obtained without BVN, the lender cannot take legal action against them.

In conclusion, while it is possible to apply for loans without BVN, it is not advisable. The risks and issues associated with such applications outweigh any perceived benefits. Borrowers should always ensure they provide their BVN when applying for loans to protect themselves from identity theft, high interest rates, limited loan amounts, and legal implications. Lenders should also ensure that they comply with the BVN policy to avoid any legal repercussions.

LairaPlus Loan App

Free

In Nigeria   V1.0.1.2

5.0 (1 million +)

Security Status

in Nigeria

LairaPlus APP

Best loan app

in Nigeria

Free

In Nigeria   V1.0.1.2

5.0 (1 million +)

Security Status

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