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Lending5 August 20269 min read

Digital loan APRs in Nigeria: the real cost behind '4% monthly'

We modelled 14 lending apps on identical loan terms. The gap between advertised and effective cost is enormous.

A 4% monthly rate on a 30-day tenor is not 48% a year once origination fees and rollovers are included. On the products we modelled, effective APRs ranged from 30% to more than 260%.

Always compute total repayment divided by amount received, then annualise. Every lender must disclose the total; few make it prominent.