How to Borrow Using Your Savings & Investments in Nigeria

Sometimes life brings unexpected bills — hospital fees, school payments, house repairs — and you may not want to touch your long-term investments. The good news is: you can borrow money using your savings or investments as collateral, without selling them or breaking your financial plans.

This guide breaks it down in a simple, practical way so you can understand how it works in Nigeria and whether it’s right for you.

What Does It Mean to Borrow Against Your Savings or Investments?

Borrowing against savings or investments allows you to use what you already have — a fixed deposit, mutual funds, stocks, or government bonds — as collateral for a loan.

Instead of selling your investments and losing future growth, the bank gives you a loan while your money stays intact and continues to earn interest.

It’s one of the smartest ways to borrow because:

• Interest rates are lower than regular personal loans
• Approval is faster since the bank already has your collateral

Assets You Can Borrow Against in Nigeria

1. Fixed Deposits (FDs)

• You don’t break your FD
• Your FD keeps earning interest
• Approval is quick
• Lower interest rates than payday or salary loans
• Minimal documentation

2. Mutual Funds & Stocks

• liquidity of your investments
• Market value
• Risk level of your securities
• It’s easier with more stable funds like money market mutual funds.

3. Government Bonds & Treasury Bills

Banks love government securities because they’re safe.

• Better loan terms
• Lower interest rates
• Higher loan amounts

If you hold FGN bonds or treasury bills, this is usually a strong option.

How to Apply for a Loan Against Savings in Nigeria

• Check which financial institutions offer this type of loan
  Not all banks allow borrowing against investments.

• Assess your assets
  Choose what makes the most sense — FD, mutual fund, bond or stock portfolio.

• Review the terms carefully
  Look at:

  • Interest rate

  • Loan-to-value ratio

  • Repayment structure

  • What happens if you delay repayment

• Submit your application
  You’ll provide proof of investment ownership and basic KYC documents.

• Set your repayment plan
  This protects you from putting your savings or investments at risk.

Benefits of Borrowing Against Savings or Investments

1. Lower interest rates- Because the loan is secured.
2. Your money keeps growing- You still earn interest or returns.
3. Quick approval- Less paperwork and no need for a guarantor.
4. Avoids tax implications- Selling investments may trigger taxes — borrowing doesn’t.
5. Higher loan amounts- More than what you’d get from unsecured loans.

Risks You Should Consider

• Asset loss: If you default, the bank can liquidate your investment.
• Market volatility: If your investments drop in value, your loan terms may change.
• Interest vs returns: Make sure the loan interest isn’t higher than your investment earnings.
• Discipline required: Missing payments can affect your credit and your assets.

Smart Tips for Nigerians Using Investment-Backed Loans

• Compare banks and rates before deciding
• Have a clear repayment strategy before signing
• Keep an eye on the performance of your investments
• If using fixed deposits, consider laddering for easier liquidity

Bottom Line

Borrowing against your savings and investments is a smart way to access cash without breaking your long-term financial plans. When done responsibly, it protects your future goals and gives you affordable access to funding.

But like every financial decision, make sure it aligns with your budget, your timeline, and your risk appetite. A financial advisor or comparison tool like nairaCompare can help you make the best choice.

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