Understanding Migo’s Policy for Contacting References if Loan Payments Are Missed
Migo, a fintech platform offering quick, unsecured loans in Nigeria, requires borrowers to provide personal references during the application process. Some people have concerns about Migo contacting their references if they default or miss payments on their loan.
This comprehensive article examines Migo’s policies around contacting personal references, under what circumstances this occurs, how borrowers can prevent it, and some precautions users should take when providing references.
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Overview of Migo Loans
Founded in 2013, Migo provides collateral-free consumer loans from ₦1,500 to ₦500,000 to working professionals in Nigeria. Applicants undergo automated credit screening using alternative data like mobile phone transactions rather than pay slips.
Once approved, the loan amount is instantly disbursed to the borrower’s bank account. Repayment periods range from 1-6 months depending on the loan tenure, with the principal and interest payable in equal installments.
Migo allows borrowers to repay through various channels including bank transfer, debit card, mobile money, USSD, cash deposit and more. They aim to provide quick access to credit even for unbanked populations.
Migo’s Reference Contact Policy
Like many lenders, Migo requires two to three personal references from borrowers during loan application, which is standard practice. However, Migo maintains that contacting references is a last resort used only under specific conditions.
According to their official website and loan agreement, Migo may contact your personal references only if:
- Your loan repayment is past due after the scheduled payment date
- Migo has been unable to reach you directly through repeated phone calls, SMS, emails, or other channels
- A period of time has passed since the payment due date
- Contacting the references is a necessary step in the overdue account collection process
Even in these cases, Migo states they will disclose minimal information, like that you have an outstanding loan and are unreachable, and will not reveal sensitive details. The message to your reference will contain instructions to get in touch with you or Migo to resolve the situation.
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How Borrowers Can Avoid References Being Contacted
Migo reassures that contacting personal references is not an action they take lightly. There are steps borrowers can take to prevent this from occurring:
- Always provide accurate personal contact details during loan application so Migo can reach you directly. Update them if your number changes.
- Respond promptly to calls, messages, emails from Migo. Being unreachable exacerbates the situation.
- Repay the loan diligently by the stipulated due dates to maintain your account in good standing. Even if facing delays, partial payments help.
- Inform Migo immediately if you foresee any difficulty with repayment before the loan becomes past due. Discuss options openly.
- Avoid taking the maximum loan amount permitted if uncertain about repayment capacity. Take only what you can comfortably pay back.
- Build open communication with Migo and update them proactively on repayment status.
Essentially, by keeping channels open and making some effort to repay or inform Migo of hardships before accounts become delinquent, borrowers can avoid getting their references contacted.
Reflecting Carefully Before Providing References
When providing personal references during a Migo loan application, borrowers should reflect carefully on a few aspects:
- Inform the individuals that you have listed them as a reference for your loan application. Make sure they are comfortable with this possibility before submitting their details.
- Only provide reference details for individuals with whom you share a good relationship and are able to contact if needed. Listing contacts you are not on good terms with or cannot easily reach can backfire.
- Be prudent about which contacts you list as references, keeping privacy considerations in mind. Listing employers or public figures when unnecessary may not be advisable.
- Provide references who you are confident will respond constructively if contacted and will preserve discretion.
- If unable to identify suitable references, discuss options with Migo rather than listing unreliable or unreachable contacts.
Conclusion
Migo emphasizes that contacting personal references is a last option used only after all other efforts to reach a borrower about a past due loan have failed repeatedly. By making repayments on schedule, maintaining communication with Migo, and exercising due thought when providing references, borrowers can avoid the need for Migo to contact references altogether. However, this provision protects lenders against substantial losses from unreachable defaulters.
Frequently Asked Questions
Can I remove or change my listed references later?
Yes, you can request Migo to modify your references after loan approval by contacting customer support.
Will Migo call my workplace if I miss payments?
No, Migo states they will not contact your employer or co-workers regarding loan defaults or collections.
Can I take a Migo loan without providing references?
References are mandatory for loan approval purposes. However, alternatives can be discussed if you have constraints.
Who can I list as a reference?
Ideal references are personal contacts like family, friends, or community members who know you well, can vouch for you, and can be easily contacted if required.
Can I take legal action if Migo contacts references improperly? You may explore legal options if references were contacted prematurely without sufficient attempts to reach you first regarding an overdue loan.
Let me know if you need any clarification or have additional questions about Migo’s policy on contacting personal references!