Cigno Loans Review: Unlocking Tailored Financial Solutions

Are you considering taking out a loan with Cigno Loans? Before you make a decision, it’s crucial to understand the potential risks and high costs associated with this payday lender.

In this comprehensive Cigno Loans review, we’ll dive deep into:

• How Cigno Loans works, including their high approval rates and repayment process
• The exorbitant interest rates and fees charged by Cigno, which can lead to repaying double or triple the original loan amount
• ASIC’s legal action against Cigno for alleged illegal lending practices and excessive fees
• Pros and cons of Cigno Loans based on customer reviews
• Regulatory gaps that allow Cigno to operate with minimal oversight and exploit loopholes
• Steps to take if you’ve been overcharged or treated unfairly by Cigno
• An honest assessment of whether you should consider taking a Cigno loan

How Cigno Loans Works?

Do you require a swift infusion of funds to see you through until your next payday? Cigno Loans might seem like a tempting solution. They offer short-term loans from $50 to $1,000 that can be repaid over a maximum of 62 days. The application process is fully online, and if approved, you could have the money in your account the same day. Sounds pretty convenient, right?

Here’s the thing though – Cigno has a very high approval rate. They’ll consider your application even if you have bad credit, receive Centrelink payments, or are currently unemployed. While this might sound great if you’re in a tight spot financially, it’s important to be cautious. Just because you can get approved doesn’t necessarily mean the loan is affordable for your situation.

If you do decide to go ahead with a Cigno loan, the repayment process is fairly streamlined. You provide your bank account details during the application, and the repayments will be automatically deducted on a weekly, fortnightly or monthly basis until the loan is paid off. Just be sure you have enough money in your account on those due dates, as you can get stung with some hefty dishonor fees if a payment bounces.

Not so sure about Cigno Loans? There are other online lending platforms you can consider. Read these articles to know more about them.

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Cigno Loans Interest Rates & Fees

Now, let’s dive into the nitty-gritty of what it actually costs to borrow from Cigno Loans. Brace yourself, because it’s not pretty.

First up, there’s a setup fee of 15% of the loan amount. So, if you borrow $100, you’ll be slugged with a $15 fee right off the bat. But wait, there’s more! Cigno also charges a monthly account-keeping fee of $5.95, regardless of your loan balance.

But the fees don’t stop there. Want your money deposited the same day? That’ll be an extra $16, thanks. Need to change your repayment date or extend your loan? Prepare to cough up additional fees ranging from $22 to $30. And heaven forbid you miss a payment – you could be hit with dishonor fees of up to $79.

When you add up all these fees and charges, the total cost of a Cigno loan can be staggering. Let’s say you borrow $250. By the time you repay the loan, you could end up paying back over $500 – that’s more than double the original amount! In some cases, borrowers have reported paying back 3-4 times what they initially borrowed.

So while the idea of quick cash might be tempting, it’s crucial to understand the true cost of a Cigno loan. When you consider the exorbitant fees and charges, it becomes clear that these loans are not a cheap or sustainable solution for most people.

ASIC Legal Action Against Cigno

Cigno Loans has been in hot water with the Australian Securities and Investments Commission (ASIC) for quite some time now. In 2019, ASIC took action against Cigno, alleging that their loan fees were excessive and breached payday lending laws. As a result, ASIC issued a product intervention order banning Cigno’s short-term lending model.

But Cigno didn’t take this lying down. They quickly changed their lending model in an attempt to sidestep the ban. However, ASIC argues that this new model is still illegal and continues to cause significant harm to consumers.

In fact, ASIC has now taken Cigno to the Federal Court, alleging that the company has been engaging in unlicensed credit activity. The regulator is seeking declarations, pecuniary penalties, and injunctions against Cigno and its director, Mark Swanepoel.

According to ASIC, Cigno used this new lending model to provide loans to over 160,000 Australians, earning more than $78 million in fees. The regulator alleges that Cigno’s fees under this model are still excessive, with some borrowers paying the equivalent of an 800% interest rate!

ASIC Deputy Chair Sarah Court didn’t mince words when discussing Cigno’s conduct. “ASIC is concerned that Cigno’s loan products are designed to avoid consumer protections and prey on vulnerable consumers,” she said.

It’s clear that ASIC is taking a hard stance against Cigno and their alleged illegal lending activities. However, the court case is still ongoing, and the final outcome remains to be seen.

Pros of Cigno Loans

Fast and Easy Application Process: Many customers appreciate how quick and straightforward it is to apply for a loan with Cigno. The online application can be completed in just a few minutes, with minimal documentation required. Customers find the process user-friendly, even for those who aren’t particularly tech-savvy.

Quick Access to Funds: Once approved, borrowers praise Cigno for swiftly depositing the loan amount into their bank account. In many cases, customers receive the money within a few hours of approval, which is particularly helpful for those facing emergency expenses or unexpected bills.

Helpful Customer Service: Several reviews highlight the helpfulness and courtesy of Cigno’s customer service team. Borrowers feel that the representatives are understanding of their situations and are willing to assist them throughout the loan process. Many appreciate the support they receive when they need to adjust repayment dates or have questions about their loan.

Loans for Various Credit Profiles: Some customers are grateful that Cigno provides loans to individuals who may have difficulty securing financing elsewhere due to their credit history. The company’s willingness to consider a range of credit profiles makes it an accessible option for many borrowers in need of short-term funds.

Convenient Repayment Options: Cigno offers several repayment options, allowing customers to choose a plan that best fits their financial situation. Many borrowers find the automatic direct debit feature convenient, as it ensures they don’t miss a payment. The ability to align repayments with their pay schedule is another aspect that customers appreciate.

Cons of Cigno Loans

High Interest Rates and Fees: One of the most common complaints among Cigno customers is the high cost of borrowing. Many reviewers express shock at the total amount they need to repay, which often significantly exceeds the original loan amount. The combination of high interest rates and various fees can make the loans expensive, trapping some borrowers in a cycle of debt.

Lack of Transparency: Some customers feel that Cigno is not entirely upfront about the total costs associated with their loans. While the company does provide information on fees and charges, several reviewers claim that the true extent of these costs is not made clear until they are already committed to the loan.

Difficulty Contacting Customer Support: Despite some positive experiences with customer service, a number of reviewers report difficulties in reaching a representative when they need assistance. Some customers mention that phone calls go unanswered, emails receive generic responses, and the online chat feature is not always helpful. This lack of responsiveness can be particularly frustrating for borrowers who are trying to resolve issues with their loans.

Aggressive Collection Practices: In several reviews, customers describe Cigno’s collection practices as aggressive and inflexible. Some borrowers report receiving constant emails, texts, and phone calls when they miss a payment, even if they are only a day or two late. Others mention that the company is quick to apply default fees and charges, making it even harder to catch up on payments.

Confusion Over Loan Status: A few customers express confusion over the status of their loans, particularly after they believe they have fully repaid the amount owed. Some reviewers mention receiving emails or notifications about additional fees or charges even after they thought their loan was settled, leading to frustration and uncertainty.

Regulatory Gaps

Cigno Loans operates in a regulatory grey area. As a payday lender, Cigno is not bound by the same rules and regulations that govern traditional lenders under the National Credit Act and National Credit Code. This lack of oversight allows the company to charge high fees and interest rates that can exceed the caps set for regulated lenders.

Cigno’s business model seems to exploit loopholes in the payday lending regulations, allowing them to bypass restrictions on fees and charges. For example, Cigno keeps its loan fees under the 5% establishment fee cap and the maximum 24% annual interest rate for loans under 62 days. However, they then charge significant upfront, ongoing, and default fees under a separate contract, leading to total charges that can equate to almost 1,000% of the original loan amount.

The documents reveal that ASIC has attempted to address these regulatory gaps by using its product intervention powers. In 2019, ASIC issued a ban on Cigno’s lending model, but the company quickly adapted by restructuring its loans to circumvent the ban. This highlights the challenges regulators face in keeping up with companies that actively seek ways to avoid consumer protection laws.

Consumer advocates argue that these regulatory loopholes leave borrowers, particularly vulnerable individuals, at risk of falling into debt traps. They call for stronger consumer credit laws and anti-avoidance provisions to prevent lenders from exploiting gaps in the legislation.

Closing these loopholes would help ensure that all lenders, including payday lenders like Cigno, are subject to consistent regulation and oversight, ultimately providing better protection for consumers.

Taking Action if Overcharged or Treated Unfairly

If you feel that you’ve been overcharged or treated unfairly by Cigno Loans, there are several steps you can take to address the issue and seek a resolution.

Review Your Loan Documents

Carefully go through your loan agreement and any related documentation to understand the terms and conditions you agreed to. Pay close attention to the fees, charges, and interest rates outlined in the contract. This information will help you determine if Cigno has adhered to the terms of the agreement or if there are any discrepancies.

Contact Cigno Loans

If you believe you’ve been overcharged or treated unfairly, your first step should be to reach out to Cigno Loans directly. Explain your concerns clearly and provide any supporting documentation. You can contact them via email or phone, though some customers have reported difficulties in reaching a representative. Be persistent and keep a record of your communication attempts.

Seek Free Financial Advice

If you’re unsure about how to proceed or need guidance on your rights as a borrower, consider seeking free financial advice. Organizations like the National Debt Helpline and Financial Counselling Australia offer free, confidential advice to help you manage your debts and deal with lenders. They can also help you understand your options and advocate on your behalf if needed.

Lodge a Complaint with AFCA

If you’re unable to resolve the issue directly with Cigno Loans, you can escalate your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free and independent dispute resolution service that can investigate your complaint and make a determination. Before lodging a complaint with AFCA, you’ll need to have given Cigno a chance to address your concerns.

Consider Legal Action

In some cases, you may want to consider taking legal action against Cigno Loans. This could be an option if you believe the company has violated consumer protection laws or engaged in misleading or deceptive conduct. You can seek advice from a community legal center or a private lawyer specializing in consumer credit issues to evaluate your case and discuss potential legal remedies.

Should You Take a Cigno Loan?

All things considered, I would not recommend taking out a loan with Cigno Loans unless you have absolutely no other options and are in desperate need of funds.

While Cigno may be appealing to those who have difficulty securing loans elsewhere due to their credit history, the high costs associated with these loans can quickly lead to a debt trap. The combination of high fees and interest rates can make it challenging for borrowers to repay the loan, often resulting in a total repayment amount that far exceeds the original loan.

Moreover, the regulatory gaps that allow Cigno to operate with minimal oversight are concerning. The company’s apparent willingness to exploit loopholes in payday lending regulations suggests that they may not have their customers’ best interests at heart. The reports of aggressive collection practices and unresponsive customer service further underline the potential risks of borrowing from Cigno.

If you are considering a Cigno loan, I strongly advise you to explore all other options first. This could include seeking assistance from community organizations, negotiating with existing creditors, or considering alternative low-interest loan options from reputable lenders. It’s also crucial to carefully review the terms and conditions of any loan agreement and ensure you fully understand the costs involved before signing.

Conclusion

While Cigno Loans may seem like a quick and easy solution for those in need of fast cash, the potential drawbacks far outweigh any short-term benefits. With sky-high interest rates, hidden fees, and a business model that exploits regulatory loopholes, Cigno Loans can quickly trap borrowers in a cycle of debt.

If you’re considering a Cigno loan, it’s essential to explore all other options first and carefully weigh the long-term financial consequences.

Remember, there are always alternatives, such as seeking assistance from community organizations, negotiating with creditors, or looking for low-interest loans from reputable lenders. Don’t let the allure of quick cash blind you to the potential risks – your financial well-being is worth more than any short-term fix.

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