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5 Reasons Why You Should Never Pay Any Loan App That Has Defamed You

Online loan apps have become common in Nigeria, offering quick loans to people who need money urgently. However, many of these apps operate outside the law and use harmful tactics to recover their money. One of their worst strategies is defamation. They shame borrowers by sending threatening messages to their contacts or spreading lies about them on social media. If you have ever been a victim of this, then you should know one thing: you don’t need to pay back any loan app that has defamed you.

Paying after being publicly disgraced only rewards their unlawful behavior and keeps them in business. Instead of giving them more power, here are five solid reasons why you should never pay back a loan app that has already tarnished your name.

1. They Are Loan Sharks Operating Illegally

Legitimate lenders follow regulated processes set by the Central Bank of Nigeria (CBN) and other financial authorities. They would never resort to blackmail or defamation to recover debts. On the other hand, loan apps that shame borrowers belong to the category of loan sharks. Loan sharks operate without proper licenses and use threats, harassment, and defamation as tools to force repayment.

Once a loan app crosses the line by defaming you, they have already acted illegally. At that point, paying them is no longer necessary. Instead, they should be reported to the Federal Competition and Consumer Protection Commission (FCCPC), which has already shut down several apps guilty of such practices. By refusing to pay, you are standing against their illegal operations and sending a strong message that borrowers will no longer be intimidated into submission.

2. Paying Them Only Makes Them Richer and More Dangerous

Loan apps that defame borrowers usually charge outrageous interest rates. Their business thrives because people, out of fear and embarrassment, still pay them even after being humiliated. Every time you pay them back, you are not just settling your loan—you are enriching their system of abuse.

The danger here is that once you pay, they will see you as vulnerable and may continue to lure you into borrowing again. They profit when borrowers get trapped in an endless cycle of debt. Their exorbitant charges and abusive recovery strategies are designed to keep people hooked and scared. By refusing to pay after they have defamed you, you are cutting off their means of exploiting you and stopping them from getting wealthier through intimidation.

3. It Doesn’t Affect Your Credit Score

One of the main fears borrowers have is damaging their credit score. However, illegal loan apps that defame people are not linked to recognized credit bureaus in Nigeria. They have no connection with the CBN and do not have the authority to report to any official credit registry. This means that their threats of ruining your credit profile are false.

When they spread damaging stories, call you a fraudster, or make outrageous claims, they are simply trying to scare you. Paying them back after such harassment is like encouraging their unlawful methods. Your creditworthiness is only affected when you deal with legitimate lenders, not with faceless loan sharks. So, even if you refuse to pay after being defamed, it won’t stop you from accessing loans from registered banks, microfinance institutions, or CBN-approved platforms in the future.

4. They Should Recover the Money From the Public They Defamed You To

One of the most damaging tactics used by these apps is sending defamatory messages to a borrower’s contacts. Sometimes, they go as far as posting shameful statements about borrowers on WhatsApp groups or social media. Their intention is to embarrass you until you give in and pay.

But here’s the truth: once they have broadcast your name and image to others, they have already taken the matter beyond you. If they are bold enough to inform your family, friends, and even strangers about your loan, then they should also turn to those people to recover their money. After all, they have already shifted the responsibility by dragging your reputation through the mud.

Paying them back will not erase the lies they have spread. If anything, it will prove that their intimidation works. The logical response is to let them carry the burden of their own misconduct, not you.

5. Paying Back Cannot Undo the Damage Done

The greatest reason you should never pay a loan app after being defamed is that the damage has already been done. Once your name has been dragged through the dirt, no amount of repayment can repair the harm to your dignity, reputation, or mental health.

These loan apps thrive on fear, and they know most people will do anything to stop further embarrassment. But what they never admit is that once they have exposed you, the harm is permanent. Paying them does not delete the messages they sent to your boss, your colleagues, or your relatives. It does not erase the screenshots that might have been shared around.

Instead of giving them money, protect yourself by gathering evidence of their defamation and reporting them to the FCCPC. By refusing to pay, you take back the power they tried to strip away with their threats.

Loan apps that defame borrowers are nothing more than loan sharks preying on people’s fear. They use unlawful tactics to force repayment, but once they have defamed you, they have already crossed the line. Paying them back only rewards their misconduct, enriches their fraudulent system, and leaves you vulnerable to more debt. If you ever find yourself in this situation, know that the damage cannot be undone by giving them money. Instead, report them to the authorities and let them face the consequences of their actions. They feed on fear and ignorance, but the best way to defeat them is to refuse payment after defamation.