Personal Loans

We know that being in debts can be an overwhelming and weakening experience. But there are intelligent, proven ways to manage your debt and return you to sound financial health. Take a deep breath to examine all your options and pick the ones that can aid you the most.

Regardless of the quantum of debt, everyone with debt obligations has to manage their debts. If you have a small debt, you have to keep up with your payments, so it doesn’t get out of control. On the flip side, if you owe a lot of money, you have to pay more attention to paying off your debt while meeting other obligations.

Here are five ways you can manage your debt

1. How Much Do You Owe?

Please make a list of your total outstanding debts and other monthly financial obligations including their due dates where necessary. Having all the debts at a glance will help you see the bigger picture and stay in focus of your complete debt picture.

It is not enough to create a list and forget about it. Make reference to your debt list periodically and update accordingly, especially as you pay bills. This will help you ascertain the level of your debt at any time.

2. Monthly Early Repayments

Late payments make it more challenging to pay off debts, considering you’ll have to pay the penalty for every payment you miss. It would be best if you tried to make early repayments on your loan as it helps reduce the interest rate on the loan amount due.

If you miss a payment, do not wait for the next due date before you make your outstanding loan amount. It is better to pay as soon as you remember. This will keep you further away from being reported to the credit bureau or ultimately affect your credit score.

3. Plan With a Monthly Budget 

Keeping a budget ensures you have enough money to meet your monthly obligations. You can plan well enough in advance and take early action if it looks like you won’t have enough cash for your bills in the coming month or next. A budget also helps you plan to spend any extra money you might have left judiciously. This extra cash can be used to clear your debt faster.

4. Decide Which Debts to Pay off First

Paying off debts with high-interest rates is often the best strategy because they are more expensive than other debts. Of all your debts, the one with the highest interest rate usually gets priority on repayment because it’s costing the most money.

You can use your debt list to prioritize your debts in the order you want to pay them off. However, you can also pay off the high-interest debts with low-interest loans such as a cooperative loan, this helps in refinancing your bigger loans.

5. Make at least the Minimum Payment

If you can’t afford to pay all your debts, at least make the minimum payment on the loan amount due. Of course, the minimum payment hurts your chance to make real progress in paying off your debts. But, it keeps your debt in check and keeps the loan from going into default.

Conclusion

There are several other ways to manage your debts apart from the ones listed above. The most important thing is identifying your strengths and weaknesses in the management of your debts and work towards them accordingly. Managing your debts and credit score is one simple step to avoiding loan rejection.

In financial terms, a loan is money you (the borrower) receive from a bank or financial institution with an agreement to pay back the principal amount, plus interest within a specified time. 

Loans are useful for the economy because by lending to new businesses; there is an opportunity for more healthy competition, which in turn increases overall cash flow in the marketplace.

Sometimes, the borrower will pledge some piece of property to the lender to secure the repayment of the loan. This property is the collateral. The interest rates paid on loans are also a primary source of income for the bank or financial institution.

Types Of Loans

In Nigeria, there are two types of loans. Secured and Unsecured loans. All other types of loans typically fall under these two categories. Several factors differentiate the different types of loans. These factors also determine the terms and condition of the loans. 

Secured Loans

A secured loan is a loan that has the backing of a collateral, i.e. it is ‘secured’. A typical example is banks requiring loan applicants to present housing documents or proof of ownership of an asset until they repay the loan. The idea is that the lender can sell the asset to repay the loan should the borrower default on payment. Other assets used for collateral are stocks and bonds. Examples of secured loans are Mortgage loans and Term loans.

Mortgage Loans: A mortgage is a type of secured loan in which property or real estate is used as collateral. I.e. The property is ‘mortgaged’ until the borrower pays back the loan. A mortgage loan is also a home loan. You can use it for the purchase of a home.

Term Loan: This is a loan that banks and other financial institutions grant for an amount and repayment terms. The loan typically has a fixed interest rate and which you are to pay over a period. Most loans from financial institutions, especially banks, are term loans.

Unsecured Loans

An unsecured loan, on the other hand, means that nothing is backing up the loan. That is, the borrower doesn’t need to put up any property or asset as collateral. For this category, financial institutions are comprehensive when assessing applicants. They meticulously look through financial records to estimate if the borrower can pay back the loan. Unsecured loans have more risks for the lenders, making the interest rates typically higher than secured loans.

Loans that fall in this category include:

• Personal Loan: This loan is granted to an individual for their personal use. Financial institutions give these loans out depending on the applicant’s credit history and capacity to payback.
• Credit Card Loan: This loan is money a person borrows with their credit card. The card permits them to make purchases when they don’t have cash. The lender provides the cash to make the purchases. However, the borrower is to pay back the loan at an agreed-upon time. 

Loan Considerations

• Interest Rate and Repayment: It is essential to consider interest rates and repayment periods when choosing loan policies. Typically, the higher the interest rate on loan, the longer it will take to pay off the loan. Interest rates can be on either a simple or compound interest basis. Simple interest means a percentage of the principal amount.
• Compound interest: Compound interest, on the other hand, is the interest paid on interest. The borrower not only pays interest on the principal amount, but he also pays interest earned on both the principal amount and on the accumulated interest. Because interest is also earned on interest, earnings compound over time, like a snowball effect. It is favourable if you are the lender but works against the borrower as the more time it takes to pay back the loan, the more money you have to pay back. Time is money in this case.

Conclusion

Loans can be tricky. While they are an efficient one-time solution, it is easy to get sidetracked and lost in a cycle of repayment and debt. Many people lost homes as a result of their inability to pay back a loan. So before you apply for that loan, ensure that you can pay back at the specified time. It is also generally advisable to apply for loans on a strictly ‘need to’ basis, and not see them as a regular financial solution.

Gtbank has a wide range of loan offers to suit both personal and business needs. One might get confused in the process of choosing the right fit. This confusion is why it is essential to use a loan calculator before applying for any loan package.

The loan calculator is a web application that helps you calculate how much your loan payment will be. The loan payment will depend on the kind of loan and its interest rate. To make use of the loan calculator, you input your loan information (Amount, interest rate, a period of repayment). After that, the calculator will help compute your monthly payments, total payments and total interest payments. A loan calculator is an invaluable tool. It enables you to make a more informed decision on what loan package suits you best.

GTBank Loan Packages

1. GT Salary Advance: This package enables you to get up to 50% of your net salary upfront. It is available to customers who have GTB salary accounts only.
   
2. GT School Fees Advance: This loan facility assists in the payment of school fees for any institution in Nigeria.
   
3. Max Advance: The Max Advance facilitates personal loans for members of staff and selected corporate organisations.
   
4. Max Plus: A more robust version of the Max Advance, the max-plus package facilitates a larger loan facility. In addition, it offers more flexibility with its repayment plan. As a result, this package is available for platinum customers only.
   
5. GTB Quick Credit: This loan grants beneficiaries access to the cash they need urgently, and allows them to pay back over a period between 6 – 12 months. Quick Credit gives you funds up to N5million at a monthly interest rate of 1.75%
   
6. Computer Advance: Tailored particularly for youth corpers who have their allowance accounts with GTB. It enables them to purchase mobile devices and payback during their service year.
   
7. GTMorgage: This offers loan facilities to enable customers on a home in selected cities in Nigeria.
   
8. Premium Advance: With this package, an overdraft is placed on your Debit Naira Mastercard, enabling you to make payments even when there aren’t enough funds in your account.
   
9. Travel Advance: This package meets the travelling needs of customers.
   
10. Vehicle Insurance Premium Financing: This is a time loan that enables beneficiaries to pay their vehicle insurance upfront and repay within a year.

How To Apply For A GTBank Loan

To be eligible for the Quick credit loan, here are the following requirements to meet

· You must be 18 years or above.

·A minimum of 10,000 must be what you earn on a monthly basis.

· Do not have any outstanding or current loans from any other banks

To apply, dial the USSD code *737*51*51#. You can also use via the bank’s mobile and online platforms.

Loan Repayment

Quick Credit offers an interest rate of 1.33% per month, and loan repayment can be spread for 6-12 months, depending on the customer’s financial record.

The Quick credit loan package is excellent for both salary earners and self-employed individuals. Its modest rates along with a flexible repayment plan ensure that you are more than able to pay back on time.

What is a Personal Loan?

A personal loan is an amount of money borrowed from a bank or lender that can be used for either robust purchases, clear bills, or any other expensive and emergency occurrence. It can be used for just about anything.

Typically, personal loans are repaid through fixed monthly payments within a year. However, it could sometimes take longer, depending on the circumstances that surround the repayment.

Generally, personal loans are unsecured, which means they do not require collateral. This makes it one of the most accessible sources of fund. Given this, personal loans come with higher interest rates because they are approved based solely on your creditworthiness with no collateral. 

Where Can I Get a Personal Loan?

Typically, there are two main sectors in which you can get personal loans. The first is the regulated sector – they include commercial banks, micro-finance banks, and fintech companies where you can get an instant online loan in Nigeria. These are all regulated by the Central bank of Nigeria. The other source is the non-regulated sector which includes cooperative societies, credit unions, thrift collectors etc. they are not regulated by the Central Bank of Nigeria, but are, however, governed by their regulations and guidelines as a society. 

As stated in our previous article, personal loans are an easy way to secure finances on short term notice. See below five ways personal loans can save the day.

Five Ways Personal Loans Can Save the Day

Unplanned Emergencies: Personal loans help deal with the expenses that emergencies bring. For instance, if there is a medical emergency, you might not be financially capable of dealing with it (which is why health insurance is essential), but choosing to take a loan can save someone’s life.

Large Purchases: Personal loans enable you to make large purchases as soon as you need them instead of saving up for them. Although it comes with fees, it saves your time and money in that you do not have to resort to expensive short term alternatives. This could also work with the Buy Now Pay Later scheme where you can make the purchase and pay in instalments.

Consolidate Debt: If you owe a lot of debts, taking a personal loan is a smart decision. By using the loan to clear your debts, you would have consolidated all your debts and can start paying to one lender instead of many. Although it comes with interest, the interest is considerably lower than your debts.

Start a Small Business: If you’re looking to start a small business but do not have capital, taking a personal loan could be your way out. Depending on how well you manage your business, you should be able to repay the loan in a short period.

Home Renovations: A personal loan is an excellent option if you need to renovate your house on short notice. It is less expensive than other types of loans and allows you to pay in instalments.

Conclusion

There are many other reasons one can take out a personal loan. Regardless of what your reason for taking out the loans is, it must be repaid-with interest eventually. Compared to other forms of loans, personal loans are easy to apply for. We advise that you borrow an amount you can pay back. The things that will significantly impact your life.

Given this, it is essential to utilize this loan resource responsibly and not abuse its privileges. Repayment defaults affect your credit score negatively and questions your character and credibility. However, paying your loans in due time speaks volume. It improves your relationship with any other financial institutions locally or internationally. 

Introduction

The financial aspects of a good education are unavoidable, and while some students may be financially capable, others will have to depend on assistance. Some universities offer scholarships as a means of lessening this burden, but, not all students can qualify for one, and student loans are an alternative for financing one’s education. 

A student loan is a kind of financial investment to assist students with school-related needs. These needs include tuition, books, living expenses and school supplies.

Types Of Student Loans

Typically, student loans have a low-interest rate, and there are two types of rates available. Variable interest and fixed interest. A variable interest is usually lower than a fixed rate; however, they can fluctuate because they depend on the rates in the market. So if the rates are up, the variable interest will increase and vice versa.

Fixed interest rates, on the other hand, remain constant throughout the life of the loan except you consolidate. Lower fixed interest rates are usually higher than the variable rates as you are trading flexibility for stability. Knowing the kind of rates to choose can be a bit of a gamble.

If you want to see the interest you are paying on loan; the fixed rate is for you. Choosing a variable rate means you may pay a higher or lower rate on loan over time, depending on the market forces.

What To Do When Applying

When applying for a student loan, you should plan first. Be sure of the number of years the course you are taking requires and put it into consideration. You should work very hard to finish school at the appropriate time. This meaning doing your everything in your power to avoid an extra year. We most certainly are aware of the implications of an extra year are. Extra tuition fees

Also, think of ways to keep your expenses low so that you can make the most out of the loan. For example, you can share a room with someone or keep your books in good condition so you can resell them at the end of the semester.

Make an estimate of your first salary per annum when you start working. More importantly, try not to borrow more than it. Doing this will enable you to pay back faster and at your comfort. All you really have to do is manage your expenses well. 

Most of the time, students are skeptical about taking student loans because. They are worry because they feel they may not be able to pay back.

However, lenders have the option of paying in installments while in school, or immediately after graduation. Some banks that grant student loans in Nigeria include; Access Bank, KeyStone Bank, Heritage Bank, Ecobank and LAPO Microfinance Bank.

Conclusion

To conclude, when you are taking student loans, be sure to understand the loan terms and try to get as much information before deciding. You should also know the features of the loan and the type of rate interest you want.

Related Post: 5 Ways To Access Student Loans in Nigeria