Taking out a loan, more often than not, begins with piecing together all you need to know about getting money in minutes. Without the right information, one will most likely fall prey to the antics of fraudsters.
That is why at nairaCompare, we have listed the best loan companies doing business in Nigeria.
Other than that, what more do you need to know about money in minutes?
Types of loans
You might be in a fix and to access money as quickly as possible. The first thought that usually comes to mind is to seek out a loan.
Generally, loans can be broken down into two major types; secured and unsecured.
Secured loans are those types that require assets to be secured while for unsecured loans, no collateral is required. As a result, unsecured loans attract higher interest rates. Depending on your needs, these can further be broken down into other forms like Personal Loans, Auto Loans, Student Loans, Mortgage Loans, Home Equity Loans, Credit-Builder Loans, Debt Consolidation Loans, and Payday Loans.
For the sake of this piece, we will be focusing on Personal Loans.
What are Personal Loans?
A personal loan is that money you borrow from a bank or other financial institution. It usually comes with a set repayment period and consistent monthly payments. Most personal loans are unsecured, so the borrower doesn’t have to put down collateral to access the money.
One of the biggest advantages of personal loans is that once approved, the borrower can access the money in minutes as it is usually delivered directly to their bank account.
Advantages of Personal Loans
- As a rule, loans are generally made available to anyone over the age of 18, with a personal loan, you don’t need an asset to secure it.
- Personal loans are known to be versatile in their purpose in the sense that you can use the money for almost anything. Always make sure that you are borrowing what you can afford to pay back.
- They usually come with flexible repayment periods. This will vary depending on the amount you borrow and the loan platform.
- You can usually pay them back early without any penalties if your budget changes.
- Personal loans pose less risk than secured loans, as your assets cannot be reclaimed if the debt isn’t repaid.
- They are usually very quick for not only a decision but the money is transferred to your account anywhere from within 15 minutes to the end of the working day.
Disadvantages of Personal Loans
- With personal loans, the borrower is not given the luxury of long repayment times.
- There is also a limited amount borrowers can access. In Nigeria, it usually is around ₦5,000 for first-time borrowers which may not be enough to meet the urgent expense. Although with most loan platforms, the amount is increased for returning borrowers who honour their repayment schedule.
- The interest charges can typically be more expensive than secured loans. For most Nigerian loan apps, it is around 30%.
- You need a strong credit score to access the best interest rates and deals.
- Your monthly payment figure is fixed, so you don’t have the flexibility to pay smaller amounts one month.
Steps to Getting Money in Minutes
The journey to getting that urgent money in minutes may appear easy and well laid out, but there is a lot of thought process that goes into it.
For instance, according to available data, the global personal loans market size was valued at $47.79 billion in 2020 and is projected to reach $719.31 billion by 2030.
To ensure a seamless process, some of the steps you need to take in acquiring a loan in minutes in Nigeria are listed below.
1. Decide What Kind of Loan You Need
As listed earlier, there are a wide array of loan types to choose from, but because of the nature of the urgency, your choices may likely be limited to either a payday or a personal loan.
Generally, you can borrow more with a secured loan and the interest can be lower too. This is due to the increased security the lender has with your home. Consider how much it is you want to borrow while weighing up your loan options.
2. Check Your Eligibility For A Loan
In most cases, the lender determines your eligibility for a loan, but as a borrower looking to access money in minutes, there are steps you can take to ensure that your application is not turned down.
That way, you don’t have to start the process all over again.
One such step includes checking your credit score. An applicant’s credit score is one of the most important factors a lender considers when evaluating a loan application.
Your income and preferred payment plan also determine whether your loan will get approved by the loan company.
3. Proper documentation
When it’s time to formally apply for a personal loan, your lender will request a number of documents to confirm everything from your identity to your residence and employment. The most common documents lenders require as part of the loan application process include;
Proof of Identity:
Most lenders require applicants to provide at least one form of government-issued identification to prove they are at least 18 years old and a Nigerian citizen. This precaution also reduces the threat of identity theft. Acceptable forms of government-issued identification often include an international passport, a driver’s licence, a voter’s card, or a National Identity Number (NIN).
Employer and Income Verification:
A lender typically wants to see that you have the ability to pay back the loan. To do this, they require prospective borrowers to demonstrate their employment history and current earnings as part of the application process.
Proof of Address:
In addition to confirming your employment, most lenders want to know that you have a stable living situation. This may involve providing proof of your address, including a recent utility bill, or a copy of your lease or other rental agreement.
How to decide if a personal loan is right for you
Before taking out a personal loan, there are questions you need to ask yourself.
1. Do I really need a loan?
While it may be tempting to take out a loan to meet that immediate need, it is important to ensure that it is not a frivolous expenditure. Ask yourself whether you really need to borrow before applying for a personal loan.
2. What is the cost of taking a loan?
Add up the total cost of borrowing, including all associated interest rates and fees, before making your decision. Compare different types of loans to ensure you’re getting the lowest possible rate.
Can I afford the monthly payments?
You should always consider your ability to repay your personal loan, which means calculating your monthly payment and factoring it into your budget. nairaCompare has the best personal loan calculator which can help you estimate your monthly payment before committing to a loan.