In today’s financial world, getting a loan goes beyond just clicking away on your keypad. Thankfully, there are tips that help you find the best instant loan company in Nigeria.
With loan companies springing up by the minute, despite becoming a highly competitive market, some borrowers have been known to have had unsavoury experiences at the hands of lenders.
Below are some tips that can help you get started with finding the best instant loan offer available.
1. Know Where You Stand With Your Credit
In Nigeria, as with other places all over the world, lenders are known to work only with those with a good credit score and high income. People with low credit can also access loans but at higher rates.
In finding the best loan company to serve your needs, it does a lot of good to check your credit and review your financial situation so you can apply with lenders catering to borrowers like you.
Maintaining good credit is one of the best things you can do to maintain your financial stability.
If your credit is presently in a bad state, be sure to build a better credit score.
2. Know all about loans and lenders
A loan can be the sum of money individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events.
Loans are generally classified into two; secured and unsecured loans.
A secured loan is one that is backed by some form of collateral while an unsecured loan means that the borrower does not have to offer any asset as collateral.
Armed with this knowledge, it also comes in handy to know who your lenders are and what kinds of loans are on offer.
3. Be Aware of Restrictions
Some lenders are known to place a restriction on their loan terms. These restrictions are in the form of a maximum loan amount an applicant is authorised to borrow. Maximum loan amounts are used for standard loans, credit cards, and line-of-credit accounts.
4. Consider Your Bank or Credit Union
The activities of online lenders in Nigeria are becoming more prevalent. While they are known to provide loans at the snap of a finger, sometimes it is also OK to check with the traditional bank or credit union when finding the best loan.
The banks and some credit unions are known to have lower fees and better interest rates on personal or payday loans and can make them available in an instant.
5. Use a Personal Loan Calculator
A personal loan calculator is an online tool that helps calculate the amount a borrower has to pay every month to repay the loan. The loan calculator considers such factors as the loan amount, interest rate, and loan tenure to compute Interest payable till the loan tenure.
The importance of a Personal Loan Calculator is that it can give concise visuals to help determine what monthly payments and total costs will look like over the life of a loan.
nairaCompare’s Personal Loan Calculator can help you through this process.
6. Consider Peer-to-Peer Lending Platforms.
Peer-to-peer P2P lending in Nigeria is a method of meeting urgent financial obligations. Through it, individuals can borrow and lend money without the use of banks as an intermediary.
Other than loans, P2P can be done over a variety of services ranging from sharing data, ride-sharing, and others.
It also comes in as an alternative to a loan when funding that equipment purchase.
While it is still finding its feet in Nigeria, a number of platforms are known to offer P2P services.
7. Find a lender that offers Credit Builder Loans
Credit builder loans are loans with an easy approval process that are designed specifically for people who need to build credit. These kinds of loans are for those who don’t have a strong credit history.
How this works in most cases is that you borrow the desired amount but can’t access it until you’ve paid the full amount back.
The money you borrow is put into a savings account for you while you make monthly payments based on your interest rate and the amount borrowed.
8. Avoid predatory lenders
Predatory lenders are those who impose unfair, deceptive, or abusive loan terms on borrowers. In many cases, these loans carry high fees and interest rates, strip the borrower of equity, or place a creditworthy borrower in a lower credit-rated loan, all to the lender’s benefit.
Predatory lenders often use aggressive loan collection tactics that may embarrass you as a borrower.
Make sure you find out as much information as you can about a loan giver to avoid a situation like that.
9. Get your documentation right
Having settled for a loan company, your lender will request a number of documents to confirm everything from your identity to your residence and employment.
In general, you’ll need to provide basic personal information, how much you want to borrow, and the purpose of the loan.
Some of the documentation loan platforms require may include:
- Proof of Identity – Driver’s license, State-issued ID, or Passport
- Employer contact information
- Income Verification
- Bank statements for self-employed
- Proof of Address
Bonus tips for getting the best loan offer
Now that you have put the above tips into practice and have settled for a particular loan company, there are still a few hurdles to cross.
The following tips will ensure that you get the best loan offer from the company you settle for.
Minimum loan amount
In Nigeria, depending on the specific lender, the minimum loan amount o offer could be anything between ₦ 1,500 and ₦ 5,000. It has been advised that if your loan requirement falls within that range, you are better off borrowing from a friend or family member.
If it’s not an emergency, you could just save up till you get the required amount to meet the need.
Definitely, you will be paying an interest rate based on the amount you’re borrowing. And, this rate determines how much your total loan will cost you in the end.
The interest rates on personal loans are typically between 9% and 13% for individuals with excellent credit. However, you can do a calculation of what your total payment would amount to, so you can know if it’s worth it.
You may be able to receive rate discounts if you’re a preexisting customer or set up automatic payments.
Other than interest rates, most loan offers come with added charges. Some of such fees are hidden from the borrower. Be sure to read up on the loan on offer thoroughly to see if any such fees exist. Some of such charges could include an origination fee which is an upfront fee to process your loan, a prepayment penalty, a late-payment fee, and an insufficient-funds fee.