Personal loans are loans given to an individual for personal use. This is unlike business or commercial loans that is given for business needs. The reasons for personal loans are always personal such as: Paying your rent, Hospital bills, Buying a new car or TV, buying a computer, school fees, meeting some emergency needs. Generally, this kind of loan is used for your own needs. It is also called private loans. In this article, we will show you where to get personal loans in Nigeria.
Why are personal loans important?
The truth is that sometimes, the economy can make things so difficult. Or sometimes, you may have a lot of things in your hand. Before you know it you are behind on your rent. No one to run to, no money. In a time like that, getting a personal loan can help you out.
You may need a new car, or to rent a new apartment, pay your children’s school fees, personal loans is a very good option in these circumstances.
Imagine you fall sick or someone close to you is down and you need fund to take care of the hospital bills, you can quickly get a personal loan to handle the situation. Sometimes, emergency might happen that requires cash, personal loans can be helpful.
In summary, personal loans are important because they help us when we are in a fix!
Requirement for getting personal loans in Nigeria
When it comes to getting personal loans in Nigeria, requirement varies from one lender to another. Different lenders (banks, micro-finance, cooperative societies, etc) have various requirements. But here are some common requirement when seeking a personal loan in Nigeria.
- Bank account number and BVN
- Proof of Identity (International passport, Driving license, National ID or Voter’s card)
- Proof of address (Utility bills: NEPA bill, Water bill, waste bill, tenancy agreement or any proof of address)
- Passport photograph
- Statement of account or salary slip
- You should be a Nigerian citizen or have a permit to stay in Nigeria
- Employment (Employed or self employed)
Those are the common basic requirements to get a personal loan in Nigeria. Note that some banks or micro-finance banks may only give loans to those who are running an active account with them.
Collateral requirement for personal loans in Nigeria
Collateral requirement for getting personal loans in Nigeria varies according to lenders. There are lenders that do no require any collateral at all to give you personal loans.
Collateral varies from landed properties to any asset of 150% value the amount of loan that you are getting. This is the average collateral requirement.
Like mentioned earlier, a lot of lenders do not ask for collateral but they will require your salary account and some other guarantees.
Interest rate on personal loans in Nigeria
Interest rates for personal loans are influenced by few factors. First factor is the lender. The lender determines how much interest they want to charge for the money they are lending.
Another factor that influences interest rate is the payment terms. If you are paying back in one payment within a short period, the loan should attract little interest. If you are spreading repayment over a long period, the loan will attract a bigger interest. The quicker you pay, the smaller the interest. The longer you spread it, the bigger the interest.
The market also determines the interest rate.
Generally, interest rates will vary from 8% to 30% on average using a combination of the listed factors and more.
Repayment of personal loans in Nigeria
Repayment of personal loans is usually a fixed amount of installments over a period of time. This will depend on your capacity to pay back and the terms offered by the lender.
You can choose to pay back your loan in one installment or spread it for a long time with many installment that is usually monthly.
You can find repayment plans from 1 months to 36 months depending on the lender.
Places you can get personal loans in Nigeria
Here are places that you can get personal loans in Nigeria:
From our investigation, every bank in Nigeria gives personal loans. But what we noticed is that majority of the banks only offer personal loans to its customers.
Follow these steps to get a personal loans from a bank:
- Walk into your bank or any bank
- Locate the customer service desk
- Inform them you want to get a personal loan
- They will intimate you of the process and probably give you a form
- Decide! Based on the information and requirement, you can decide if you will get from them or try another alternatives.
Alternatively, you can speak with your account officer.
2. Micro-Finance Banks
We can confirm that from our research, majority of the micro-finance banks in Nigeria give personal loans to people. Walk into any micro-finance bank close to you and tell them you need a personal loan. They will give you their requirements.
Once you have the requirements, you can always decide if the terms are good enough for you. If you are unsatisfied then try another option
3. Online loans
You can get personal loans online. All you need is your phone or computer with a connection to internet. Most of the online lenders offer collateral-free loans. That means you don’t need collateral.
We have a list of the best places you can get loans online in Nigeria. Go here: Best websites to get loans online without collateral
A cooperative is an association of people who have voluntarily come together for economic, cultural and different purposes. In Nigeria, cooperative societies are a major part of the economy. Majority of them are registered with CAC and operate with well defined rules and regulations.
Cooperative societies give personal loans to its members. You just have to locate one that meets your requirement and join. Then you can access the loan.
5. Family and friends
This is usually the first resort when seeking for personal loans. If you have a wealthy family or friend or someone you are connected to, you can approach them for loans. The reason most will decline is their fear that the lender will not pay back.
You can offer them guarantees including signing agreements. Make sure you pay back!
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