Damilola* is a 27-year-old writer residing in Lagos. Speaking with PiggyVest, he disclosed details about the darkest time in his life, which involved a heavy debt and a succession of loan apps. He told us how his debt ballooned and how he managed to survive the unsavoury experience

How did you enter the snare of loan apps?

In 2021, I was having financial difficulties, but I wasn’t the type to reach out to friends to ask for help. In fact, I was the one friends came to. So when I found myself in this crisis, I didn’t know who to call.

It didn’t help that nearly every time I went on WhatsApp, I’d see “I no dey do transfer o,” or “Carry your own cross” as status updates. It seemed like the universe was telling me, “Solve your problems yourself.” Adopting that as my mindset led me into the trap.

That sucks.

Yeah. That’s how my misadventure with loan apps began. The thing is, most people who get involved in this mess don’t always start out with malicious apps. They start with the more credible ones. I took what I thought I could repay, even though the interest was…interesting. 

I did it once, paid back; I did it again, paid back again. It began to feel like a friend you could run to in difficult times. Except for the interest. 

Yes. The interest.

That is something people in bad situations are blind to: because of the interest – you’re likely living on a specific amount of money each month — your income keeps thinning. Let’s say you earn ₦70k, which is what I was making then, and you take a loan of ₦25k with an interest of ₦10k. Your income is automatically ₦60k because you’ve lost ₦10k in the process. 

But you still have problems worth ₦70k, and your budget is tailored to this amount. That puts things out of balance, so you’ll find yourself borrowing more to make up. And that incurs more interest. Ergo, less income. The vicious cycle continues.

That’s quite the insight. 

Suddenly, you’re always in the red. That’s what happened to me. I had a lot I needed money to do at the time, so I had to rely on loans to solve my problems. Soon enough, my salary was insufficient to service my loans, so I had to seek out help from other loan apps.

Oh no.

From one app, to two, to four. At the peak of this mess, I owed about 10 apps. Trust me, I was crazy; I was definitely not thinking clearly. Borrow ₦30k from here, and then have to pay back ₦45k at the end of the month. To pay off the ₦45k, I had to open a new app and borrow ₦50k, then had to pay back ₦75k at the end of the month.

My debt was compounding. I found myself in a bigger mess than when I started. I thought I could manage it, but it spiraled. At the height of it, I was in ₦1.2 million debt. I would get calls that would send me straight into a panic attack. 

They would send texts to my contacts, and send different kinds of threats to me. It went on every month, and they threatened me until I paid. 

That had to be your lowest point.

Oh, but there’s more. 

What?

Oh, yes. I even found myself in a group of debtors, and that’s when I learnt that some people do these things intentionally – borrow from loan apps with no intention of paying back. They just borrow and break their sim cards, without a care in the world. 

A majority of people don’t belong to this category, though, it’s the interest that just complicates things for us. 50% interest is insane.

How did you get out of this?

When I realised it had become an addiction, I started actively trying to get out of it. It became clear that I was taking these loans because that was all my mind and body were programmed to do whenever I needed money.

So, I did what I should’ve done in the first place — I trusted my friends. I first stopped taking loans from new apps. Then, I reached out to my friends. It was tough because everyone has their own problems. But, in this situation, free money helped a lot. [Laughs] 

My friends rallied around to clear all of my debts. I finished paying them off early this year.

What did you learn from this experience?

If we showed more care to those we say we care about, many people would not find themselves in deep trouble. It takes a bit of sacrifice, but it’s something we owe ourselves. 

Another thing: If you can’t get the money you need from the people around you, don’t conclude that loan apps are the solution. You don’t know how much loans influence your spending and consumption habits and mindset. Before you know it, loans become your source of cash flow for even your smallest needs and stuff that you can forgo. I needed a detox.

Finally, if you always need extra cash from outside your income to compensate for your needs, then you absolutely need to increase your income and your earning power. I had to quit my job and find something more lucrative. But this also meant I had to skill up to be ready for opportunities. Right now, I’m a freelancer, and I’m better off.

I’m really glad you escaped this trying situation.

Thank you. The whole thing launched me into the deepest depression of my life. I’ve heard stories of people taking their lives because of shame. It was crazy, but I thank God I was able to get out of it.