How some Nigerians get into chronic debt, and how to get out

Kiki, a young professional in Lagos, was caught up in the allure of the city’s glamorous lifestyle. As she approached her 30th birthday, she felt an overwhelming pressure to celebrate grandly, influenced by her friends and societal expectations. 

Determined to throw an extravagant party, she borrowed an additional 500,000 naira from a friend and even more ₦250,000 from an online lender, hoping that generous cash gifts from her guests would cover the costs.

However, reality soon set in. The gifts were far from sufficient, and Kiki found herself facing a staggering ₦750,000 in debt. Her salary, already stretched thin by daily expenses, could not cover her living costs and the mounting debt payments. 

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The situation worsened rapidly for Kiki. The ₦250,000 she borrowed from an online lender was at a 40% interest rate, which meant she had to pay back ₦350,000 in just a month. Struggling to meet this deadline, she took out another loan of ₦500,000 to cover the first and then continued borrowing to manage the spiraling debt. 

Before long, she found herself drowning in debt of 4 Million. Her lenders began sending harassing SMS messages to her friends, family, and bosses. She contemplated suicide several times due to the relentless pressure. 

Eventually, her employer, troubled by the messages and her low work output, fired her. What began as an exciting celebration had turned into a crushing burden, leaving Kiki feeling as though her world was falling apart. And by age 31, Kiki was a mess.

How to get out of chronic debt 

Recovering from chronic debt involves taking deliberate, strategic steps:

Stop incurring new debt

The first step is to halt any new borrowing. Continuing to take out loans will only compound your financial issues and delay your recovery.

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Negotiate with lenders

Contact your lenders to discuss your situation. Many lenders are open to renegotiating terms or restructuring loans to make them more manageable. This could involve extending the loan period, lowering interest rates, or adjusting repayment terms to fit your current financial capabilities.

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Sell non-essential valuables

Assess your belongings and identify items you can sell to generate funds for debt repayment. This could include valuable possessions, unused electronics, or even downsizing your home or vehicle to alleviate financial pressure.

Report unfair practices

If you experience harassment or unethical practices from lenders, report them to the Federal Competition and Consumer Protection Commission (FCCPC). The FCCPC can help address grievances and ensure fair treatment.

Revise your financial habits and budget

Reevaluate your spending habits and develop a realistic budget based on your current income. Focus on essential expenses and eliminate unnecessary expenditures. A well-structured budget will help you manage your finances more effectively and gradually pay off your debt.

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Take a step towards financial freedom today

Let’s face it – getting caught in a debt spiral is easier than we’d like to admit. Kiki’s story shows how quickly a celebration can turn into a financial nightmare. But here’s the good news: there’s always a way out, even when things seem hopeless.

Remember, debt doesn’t define you. It’s a challenge, sure, but one you can overcome with the right mindset and actions. By putting the brakes on new loans, talking to your lenders, and making some tough but necessary changes to your spending, you can start to see the light at the end of the tunnel.

The journey out of debt isn’t just about money – it’s about reclaiming your peace of mind and your future. It might not be easy, but every step you take is a step towards financial freedom. And trust us, that freedom feels a whole lot better than any lavish party or flashy purchase.

So, whether you’re in Kiki’s shoes or just feeling the pinch of some unwelcome debts, know this: you’ve got the power to turn things around. Your future self will thank you for starting today. After all, the best time to plant a tree was 20 years ago, but the second-best time is now. The same goes for tackling your debt – why not start right now? Start here.