Let’s dive in!
Life throws financial curveballs.
We don’t see nor expect them.
Whether it’s an unexpected medical expense, a dream business venture, or simply consolidating debt, a personal loan can be a valuable tool.
But navigating the world of personal finance, especially in Nigeria, can feel overwhelming.
This guide will equip you with the knowledge to confidently explore personal loans in Nigeria and find the perfect fit for your needs.
What is a Personal Loan?
A personal loan is essentially a lump sum of money borrowed from a bank, credit union, or online lender.
You repay the loan with fixed monthly installments over a predetermined time frame, known as the loan tenure.
A personal loan has a specific purpose and a set repayment schedule. This can help you stay focused and avoid revolving debt.
Benefits of a Personal Loan
Personal loans offer several advantages:
- Access to Money: They provide you with quick cash to cover unexpected expenses or planned investments.
- Flexible Use: The money borrowed can be used for various purposes, from debt consolidation to medical bills or even starting a business.
- Predictable Payments: Fixed monthly installments make budgeting easier compared to card debt with fluctuating interest rates.
Use Cases for Personal Loans in Nigeria
Here are some common uses for personal loans in Nigeria:
- Debt Consolidation: Combining high-interest debts into one lower-rate loan can simplify repayment and potentially save money.
- Medical Emergencies: Cover unexpected medical bills without straining your savings.
- Education Expenses: Finance tuition fees or other educational costs.
- Home Improvement Projects: Give your home a makeover without dipping into savings.
- Business Investment: Inject capital into your business venture.
Types of Personal Loans Offered in Nigeria
A. Secured vs. Unsecured Loans
- Unsecured Personal Loans: These personal loans don’t require collateral (like a car or house) to secure the loan. However, they often come with higher interest rates.
- Secured Personal Loans: Backed by collateral, these loans typically offer lower interest rates but involve putting an asset at risk if you default on the loan.
B. Term Loans vs. Line of Credit
- Term Loans: This is the most common type of personal loan, offering a one-time lump sum that you repay in fixed installments over a set loan tenure.
- Personal Line of Credit: Functions more like your debit card. You get approved for a maximum amount and can withdraw funds as needed, paying interest only on the used portion. This flexibility can be ideal for ongoing expenses or emergencies.
7 Best Personal Loan Providers in Nigeria
1. GTBank’s Quick Credit
GTBank stands out for its low-interest personal loan called Quick Credit, which has a monthly rate of 1.33%.
This is significantly lower compared to many fintech platforms.
GTBank does not require any collateral for this loan.
This makes it highly accessible to working-class Nigerians. Eligible customers can apply through various channels.
These include USSD code, internet banking, or mobile app.
The age requirement for applicants is between 18 and 59 years.
2. FirstBank FirstAdvance
First Bank of Nigeria Ltd. offers FirstAdvance with a reasonable interest rate of 2.5%.
The loan has additional charges.
These include a 1% fiat management charge and 0.50% credit life insurance.
They are collected upfront and the loan term is set at 30 days.
The loan amount is automatically deducted from the borrower’s account upon receipt of their monthly salary.
3. UBA Click Credit
UBA’s Click Credit is a short-term loan.
It is designed to help customers with immediate financial needs and allows borrowing of up to N5 million, repayable in 12 months at a monthly interest rate of 1.58%.
This loan is free of any associated expenses. It does not require paperwork for application.
Customers can apply via USSD code or online banking services.
You can also check out my guide on how to get a loan from UBA Bank.
4. Access Bank’s Payday Loan
Access Bank Plc offers payday loans at a 4% interest rate.
In addition, they also charge a 1% administration fee and a 0.15% credit life insurance fee.
Salary earners with Access Bank accounts can borrow up to 75% of their salaries.
The loan has a term of 30 days.
Loan applications can be made through the bank’s electronic channels, including its USSD code.
5. Zenith Bank’s Term Loan
Zenith Bank provides short-term loans to salary-earning professionals.
Borrowers can take up to 60% of their monthly salaries at a monthly interest rate of 2.16%.
Moreover, they also pay a 1% flat management charge.
These loans are exclusively available to Zenith Bank account holders.
Don’t know how to apply for a Zenith Bank loan?
I’ve got you. Check out my guide on how to get a loan from Zenith Bank in 2024.
6. Fidelity Bank
Fidelity Bank is a prominent choice for personal and business banking in Nigeria.
The bank is recognized for its rapid growth and customer-focused solutions and offers diverse services, including loans and investment services.
It is celebrated for its commitment to social responsibility and sustainable development.
7. Stanbic IBTC Bank
Stanbic IBTC Bank is part of the Standard Bank Group.
The bank offers personal and business banking, mobile banking, loans, and investment services.
The Stanbic IBTC Bank is also known for reliability and efficiency, which makes it a strong candidate for people seeking comprehensive banking.
FAQs
Which bank gives personal loans faster?
Guaranty Trust Bank (GTBank) is known for its quick loan disbursement. Specifically, their GT Salary Advance loan can be disbursed within 24 hours.
This loan is available to staff with active accounts domiciled in GTBank and does not require collateral.
Who gives the cheapest personal loan?
Guaranty Trust Bank (GTBank) currently offers Nigeria’s cheapest personal loan interest rate.
Their Quick Credit loan comes with a monthly interest rate of just 1.33%.
This rate is significantly lower than rates at other banks and fintech platforms.
This makes GTBank’s loans the top choice for many working-class Nigerians.
Just before you go!
