Olamide Famuwagun

Loan Calculator – How to calculate interest on loan

April 26, 2023 by Olamide Famuwagun

Before obtaining a loan, there are a good number of considerations that you should have made. At the top of this consideration list, is the question of “How do I repay the loan?” If you have a solid answer to this, then you are most certainly ready to take the loan after all other requirements fall into place. However, to properly answer that question, you need to know how much you would repay after interest and other applicable fees. Therefore, this emphasizes the need for a loan calculator, which tells you what and how much you would pay occasionally, within the repayment timeframe.

Can I Afford a Loan?

Obtaining a loan that you do not have the direct capacity to repay within a reasonable time frame is tricky. Today, most financial institutions would not even give you sums they know you cant repay. This is why they set your maximum loan amount, based on your monthly income. You wouldn’t give someone earning N50k per month N5 million in loan, would you? A loan calculator helps you get a proper view of the total loan package, including important details like sum after interest, and minimum monthly payments.

How do I calculate the interest cost on a loan?

At the point of application, the institution indicates the applicable interest on the loan, leaving you to accept or reject. Therefore, you can estimate the interest value through a mathematical calculation, to discover the amount you would repay. However, for a much easier procedure, you can simply use a loan calculator to calculate the exact value. This is one of the benefits of a loan calculator.

What is a loan calculator used for?

Basically, a loan calculator is a tool that helps you predict how much a personal loan would cost you to repay. It displays the total amount you’d repay, interest inclusive, and also the minimum monthly amount you’d need to remit to pay up within the loan repayment tenor. Therefore, what you have to do is input the details of your loan in the calculator, and it handles the rest. You can use a loan calculator across a wide array of loans, including mortgages, auto loans, personal loans, and other fixed loan types.

Where can I find a loan calculator?

Currently, most financial institutions that offer loans also give customers access to a free loan calculator on their website. Therefore, you can simply visit their site and make use of it. However, in case when they don’t, you can make use of the online software https://www.calculator.net/loan-calculator.html. The site allows you to calculate loan rates by supplying the details of the loan in the available boxes and clicking calculate. In a second or two, your figures would be ready.

Conclusion

Loan calculators have made loaning so much easier, as you do not have to sit to solve math in order to know the exact sum you’re to pay back. Instead, with a loan calculator, you can even check other parameters that would give you a better perspective towards the loan. The Credit Bureau has a list of all loan defaulters, you should calculate your loan and pay up on time.

Access bank mobile app – How to get a loan through the app

April 24, 2023 by Olamide Famuwagun

Loans serve so many purposes in our personal lives and the economy as a whole. They are so important, that even the government obtains loans too. However, some loans are very difficult to access, while others are so much easy. More so, one of those loans that are very easy to access is the Access bank app. Knowing how to get a loan with access bank mobile app is a lifesaver and compulsory knowledge for every customer.

An overview of Access bank mobile app

The access bank mobile application is a very popular app among the bank’s customers. This is because it allows you to perform so many transactions in one place. Therefore, having the mobile application is basically walking with a pocket-friendly access bank service. More importantly, the apps allow users to borrow quick loans when they need money.

Access Bank app Information

Version – 4.1.1.0

Last Update – 8th of January 2021

Number of Downloads – 1,000,000+

Download Size – 35.62MB

App Provider – Access Bank Plc

Release Date – 13th of December 2013

What loans can I obtain from the access bank mobile app?

Access bank mobile application allows you to borrow a single type of loan, which is the Payday loan. Also, although this loan is available to all customers of the bank, you have to meet certain criteria to actually become eligible to borrow. In addition, Payday loans are reserved for employees whose salary account is domiciled with the bank, which is basically them allowing you to borrow from your salary ahead.

What are the eligibility requirements to qualify for the access bank app loan?

The eligibility requirements for you to qualify for a payday loan are:
You must be an employee with a steady monthly income within the past six months
Your salary account must be domiciled with the bank
You must not have previously outstanding loans

What are the features of payday loan?

Payday loan on the access bank app has the following features:

A flat monthly interest rate of 4%

Management fee of 1%, which is deducted as soon as they disburse the loan
Loan would mature upon the next pay, or after a maximum of 31 days, whichever comes first
Credit life insurance fee of 0.15% which is also deducted at the point of loan disbursement
Loan repayment would be deducted from your salary account or accounts that are linked to your BVN

How do I access loans on the access bank app?

Simply follow the process below to apply for a payday loan through your access bank application:

Firstly, download the access bank application from Google or Apple store if you haven’t, and log in. Also, if you haven’t created an account, you would have to sign up, which can be done by clicking the signup button and following the prompt
On successfully logging in, click the menu button and select Loans and investments
Select Payday loans from the next available options
Next, the system would tell you the maximum amount which you are eligible for and also list the terms and conditions of the loan
If okay with the terms and conditions, input the loan amount you desire and click on request loan. Note that this amount must not be more than your maximum eligible loan sum.
Lastly, they would disburse the loan into your account within 24 hours if successful.

Conclusion

Obtaining a loan through the access bank application is very easy and straightforward. Therefore, as long as you meet the eligibility requirements, feel free to log in and obtain a loan as the need arises.

Nigeria’s Best and Fast Loans in 2024

April 17, 2023 by Olamide Famuwagun

Today, unlike several years back, we now have a growing list of fintech companies giving out quick and affordable loans to their customers. Gone are those days when we used to have few Fintech companies giving out loans. Although we have a lot of lending organizations at the moment, the fact is, they offer exceptional services to others. This is in terms of their loan tenor, repayment schedule, minimum and maximum loan amount, etc.

In this article, to ensure that you have access to the best lending services, we will be reviewing Nigeria’s best and fast loans. You can count on this article to provide you with all the information you need regarding the subject.

Top 10 List of Nigeria’s best and fast loans

Loanspot
Carbon
Branch
Nodcredit
Aella Credit
Quickcheck
Fairmoney
KashKash
Okash
Palmcredit

1. Loanspot:

Loanspot is one of the best lending platforms in Nigeria. They provide businesses, entrepreneurs, and everyday individuals with instant online loans that will enhance the quality of their livelihoods. This platform is designed in such a way that it connects you with several lenders across Nigeria in minutes. As of the time of this article, Loanspot has helped over 180, 000 individuals get access to credit products.

2. Carbon:

Formerly known as Paylater, Carbon exists to provide its users with instant online loans in minutes. They access your loan worth using your BVN to determine how much you can access. If you satisfy all their requirements you can access up to N20 million. Their interest rate is flexible and it ranges from about 5%-15%

3. Branch:

Branch is one of Nigeria’s best platforms that offer quick and affordable loans. On the Branch mobile app, you can access loans from N1,000 to N200,000 within minutes and with a repayment period of 4 to 40 weeks. Their interest rate is affordable as it ranges from 15%-34%.

4. Nodcredit:

NodCredit is another online platform that offers both employed, and self-employed, business people and corporates quick loans. As a first-time borrower, you will have access to about N10,000 to N50,000. Once you certify all their requirements, they will disburse your loan into the account you provided during your registration.

5. Aella Credit:

Aella Credit is one of Nigeria’s best platforms for getting fast loans. They are an app-only platform where you can access quick online loans. If you meet their lending requirements, you can access loans up to N700,000 with an interest rate between 4% -29%

6. Quickcheck:

They design the Quickcheck mobile loan app for individuals and businesses who need access to quick financial credit. On this platform, you can access up to a minimum of N30,000 without collateral for a duration of either 15 or 30 days. Basically, the duration of the loan depends on your creditworthiness and how long you have been using their services.

7. Fairmoney:

Fairmoney is a mobile app that provides you with short-term loans that you can use in settling your urgent needs. If you pass the verification stage, you will have access to the amount that tallies your credit score. They decide all these in less than 5 minutes.

8. OKash Loan:

The OKash Mobile application is an efficient way for you to access credit anytime and anywhere. They are an automated lending platform that is dedicated to increasing access to credit by financially under-served individuals in Nigeria. If you meet up with their eligibility requirements, you will receive the loan in your account in less than 5 minutes.

9. Palm Credit:

Palm credit is one of the oldest and most reliable lending platforms in Nigeria. They have been around for a while and they make it easy for you to access their loan options anytime and anywhere within minutes. If eligible, you can access up to N100,000 on the mobile app within minutes of application.

10. Jumia Loan:

This is a quick cash loan platform from Jumia that provides users with instant cash loans. You can access these loan options using the JumiaPay Android app that you can find on the google play store. They offer fast loans and their interest rates are affordable.

Conclusion:

The lending platform that makes our list of Nigeria’s best and fast loan companies is our top pick in 2022. If you need quick loans, you can leverage any of their lending options. Forex loan is also a loan service available in Nigeria.

Real estate developer loans in Nigeria explained

April 12, 2023 by Olamide Famuwagun

Real estate is one of the oldest and most profitable investment sectors in the world. It has practically existed since the inception of man, as people have always seen the importance of a property. In 2020 the global real estate investment market is worth about $9.6 trillion (from 2019), growing by almost $1 trillion in 2018. To make the market easier, and quality property more available, there are real estate developer loans that investors can obtain.

What are real estate developer loans?

In the case of Nigeria, these are loans available to any real estate company in Nigeria. It comes into play when a property developer spots a piece of land with significant potential but is short of funds to acquire it. In such a situation, the developer can simply obtain a loan to acquire and develop the property. Although property developers find it easy to obtain loans, it is often difficult for early developers. In reality, this is because they do not have a track record of successful development to earn the trust of loan givers.

What are the conditions for obtaining a real estate developer loan in Nigeria?

The governmental parastatal in charge of this loan is the Mass Housing Scheme (MHS), which is in partnership with the Federal Mortgage Bank of Nigeria. Furthermore, the loan works like a double lease system, where the developer obtains lands and titles from the government and provides the necessary infrastructure. They then lease sub-lease this property to the ultimate beneficiaries (citizens).

Eligibility requirement for real estate developer loans in Nigeria

According to the official release, a developer must certify certain criteria. For a developer to qualify for any real estate loans, the developer must meet the following minimum requirements:

The loan is for residential housing estate development only, at an interest rate of 10% per annum. Also, it has a maximum tenor of 24 months subject to revision.
The Bank finances Infrastructural facilities (up to 70% for private developers only), while Housing Corporations and government-owned development projects are to provide 100% infrastructure. Furthermore, the developer is expected to submit a financial plan and budget for the provision of infrastructure in the housing estate.
The proposed estate must have a good title that can be sub-leased to individual allottees/purchasers of the housing units
Housing units under the proposed project must fall within the target price of not more than N5.0 million. This is so that they can be affordable to NHF contributors/buyers within the range of low-to medium-income earners. Also, these units shall be in line with the type plans specified by FMBN. In addition, the developer must finance units falling outside the target type plans.
There must have been a firm commitment from buyers/allottees of the housing units. Therefore, for this purpose, a named accredited Primary Mortgage Institution is to be identified in order to facilitate the introduction of the project to prospective buyers/allottees who must be contributors to the National Housing Fund (NHF). Also, the associated PMI must confirm the relationship and forward a marketing plan for the disposal of the housing units.
You must provide a financial projection to suit the proposed financial arrangement on the project. In addition, the projection must include the developer’s equity participation in the project at the present rate of 10% p.a.
The Security for the Loan is an acceptable Bank guarantee.

What documents are to be submitted to the bank?

Certificate of incorporation.
Photocopy of Articles of Memorandum of Association of the company (estate developer) with certified true copies of Forms CO2 and C07 attached.
Evidence of registration with the National Housing Fund as an employer and up-to-date remittance of employees’ contributions to the Fund.
Payment of a non-refundable application fee of N20,000.00 (Twenty thousand naira only) for applications for amounts below N50 million and a multiple of N20,000.00 on every further N50 million.
Evidence of the membership of the Real Estate Development Association of Nigeria (REDAN) and financial contributions.
A viable facility management for the proposed Estate and Programme for its sustainability.
Any other relevant information that may facilitate quick consideration of the loan.

What documents are required to obtain real estate developer loans?

You would need to submit the following documents to obtain a real estate developer loan:

List of Board of Directors (Names, Position and Profession in Table form)
Technical Team if different from management staff.
List of Shareholding Profile of the Board of Directors and Others.
Audited Annual Accounts with the signature, seal and certification stamp of the Auditors, for the previous three (3) years.
List of Management Staff including rank, designation, profession, qualification and years of experience.
Photocopy of registered title document on the land for the proposed project
List of Projects Executed by the developer indicating Location, Name of Estate, House Type, number of housing units and cost.
Photocopy of Tax Clearance Certificate of the organization for recent three years.
Approved building and layout plans.
Resolution of the Executive Council as well as a motion of the State House of Assembly approving the application for a loan from FMB for State Housing Agency.
The Company’s Board Resolution to borrow, signed by the chairman and company’s Secretary.
The paid up share capital of the company shall not be less than a quarter of the loan amount applied for.
Valuation Report signed by a registered Valuer on the proposed project.
Priced Bill of Quantities (BOQ), signed by a registered Quantity Surveyor, giving detailed cost estimate on the various housing types/units.
Feasibility and Viability Development Report.
Cash Flow Projection stating the current interest rate of 10% for the loan as well as proposed periodic repayment.
Project Work Program/Plan.
Detailed/Budgeted Cost and source of fund for the Estate Infrastructure and Amenity facilities.
Letter of marketing commitment from a Primary Mortgage Institution (PMI). This institution would be responsible for the disposal of the houses to the NHF contributions/allottees.

Conclusion

As long as you are a registered property developer, you can always access real estate developer loans to help finance your investments. Also, note that all applications go to the federal mortgage bank of Nigeria or any other licensed institution it puts in charge.

Rent loans in Nigeria – What you should know

April 10, 2023 by Olamide Famuwagun

Housing, more accurately captured as shelter, is one of the three basic needs of man for survival. Without a shelter over your head, there’s pretty much nothing else that can go well. This is because it’s from the comfort of your home that you can earn a living to provide for your other basic amenities; food and clothing. Furthermore, rent is pretty expensive, especially when you live in a major city. If you cannot afford one, there are rent loans in Nigeria that could help you meet your immediate needs, and allow you to pay up over time.

Rent loans in Nigeria

Saving up for annual rent is outrightly a challenge for many Nigerians. The situation of things in the country is hard enough, with frequent inflation pushing up the prices of goods. Therefore, this has left the country with a large percentage being poor, and individuals turning to family and friends to borrow in order to meet their needs. However, in the end, these families and friends also have needs to meet, therefore leaving most to figure out things for themselves.

As a way out, you can simply opt for one of the rent loans in Nigeria. Currently, you can easily obtain a loan of up to N5 million at competitive rates. There are several third-party institutions that connect citizens in need of rent loans to financial partners willing to provide it.

Which institutions offer rent loans in Nigeria?

There are a good number of institutions that offer rent loans in Nigeria to individuals in need. Some top examples of these organizations are:

Credit nigeria
Paymyrent
Sparta capital limited
Resort savings and loans plc
Kwaba

How do I apply for a rent loan in Nigeria?

Most rent loan providers in Nigeria have their individual approach as to how customers are to apply for a loan. Therefore, you can simply visit the company’s website or any of its physical offices to inquire, and an agent would be on ground to put you through. However, most of them require that you provide important details like:

Bank account and BVN details
Means of identification
Company details (for the employed)
Business details and proof of steady income (for business personnel)

Conclusion

With the numerous institutions providing rent loans in Nigeria, you should not find it difficult to pay your housing bills. However, keep in mind that these institutions need you to show that you can repay the money before approving your loan. Therefore, you must have a business with regular cash flow or a job that offers a fixed salary. There are also loan options available for Lease and Hire Purchase.

Renmoney loan calculator

April 7, 2023 by Olamide Famuwagun

Microfinance banks in Nigeria and all around the world, have a major goal to provide banking services to the unbankable. This is exactly what renmoney symbolizes, as they provide many services for low to medium-income earners. More so, loans remain one of renmoney’s strongest points, as they offer quick, 24-hour available loan services with other benefits. However, one of their even more prized assets is their loan calculator which helps you simulate a loan tenure before borrowing.

What is a loan calculator?

A loan calculator is an online simulation software that takes into account the details of your loan and gives a corresponding breakdown. Essentially, it shows important details like monthly repayment, which would help the user decide if the loan is a good idea. Renmoney loan calculator is one of the top among Nigerian microfinance banks and is free for everyone looking to simulate a loan.

What are the benefits of using renmoney loan calculator?

The benefits of using a loan calculator are:

It offers a complete breakdown of the loan repayment over its tenure
The calculator is free to use
It has a simple interface and is very easy to use
Renmoney calculator helps you know whether you can repay a loan or not within the specified duration

How much can I borrow from renmony?

Currently, renmoney offers loans of up to a mouthwatering 6 million, which is pretty impressive for a microfinance bank. Also, this loan is available to employees and self-employed personnel with proof of income.

How do I use renmoney loan calculator?

Renmoney loan calculator is a very simple tool to use, as it doesn’t offer too many confusing elements. The calculator contains the following options:

How much do you want to borrow?
For how long?
Purpose of the loan

Therefore, all you need to do is to input the amount you intend to borrow, and then select the duration and purpose of the loan. After this, the loan calculator gives an estimate of your monthly repayment, which is found at the bottom end of the calculator. Therefore, it gives you an insight into monthly repayment, allowing you to judge if you can pay back or not.

Conclusion

Renmoney loan calculator is one of the easiest to use. Also, like all loan calculators, it gives you an insight as to how much you would need to repay monthly. Therefore, using the calculator helps you avoid loans that you cannot afford to repay within the given tenure.

Startup business loans in Nigeria – Where and how to get it

March 31, 2023 by Olamide Famuwagun

The growth and expansion of a country’s economy largely depends on the prosperity of businesses in it. Therefore, the more businesses prosper, the more likely it is for the economy as a whole to blossom. However, these businesses need money to startup and thrive, especially in a country like Nigeria, where regulations are not exactly favourable. The need for startup business loans in Nigeria cannot be overemphasized, and if you are a business owner, you should check out the institutions that offer them. With access to proper loans, businesses would easily survive and thrive in the nation. You can check out this post on business ideas in Nigeria.

Where can I get startup business loans in Nigeria?

Some several institutions and individuals offer startup business loans in Nigeria, which you can benefit from. However, many of these investors secure collateral at first, or not, depending on their mode of operation. Generally, you can get a startup business loan in Nigeria through any of the following means:

Angel investors

Angel investors are individuals or bodies that invest and help build startups in exchange for a certain percentage of shares or return on investment. In time past, angel investors have helped many startups get on their feet all around the world, and are a good option for your business. Also, they provide other experiences that would benefit your company as a whole.

Crowdfunding

crowdfunding is now a very popular means of raising money for startups all around the world. It does not require paperwork or traditional loan application and repayment, and often times not referred to as a loan. Crowdfunding simply allows you to create an open floor for investors to buy into your idea rather than sourcing for a single investor yourself. Also, there are numerous crowdfunding sites to choose from, with some good examples being Kickstarter and Indiegogo.

Venture capitalist

this is another good way to raise funds for your business. Venture capitalists are institutions that provide funds for high-growth and risk potential startups. Also, these institutions often focus on specific industries and have a short return on investment window that is between 3 to 5 years.

Factoring/ invoice advances

this process is quite tricky and involves a provider giving you the money on billed-out invoices. After fronting you, you are required to pay back once the customer settles the bill. Importantly, this system creates a win-win situation for all parties, especially you who require a business loan.

Grants

grants are available to startups whose services would mostly solve an economic problem or are research-related. Also, they are given by governmental bodies and some individuals. Some examples of these are the Small Business Technology Transfer (STTR) programs, and Small business Innovation Research (SBIR).

Institutions that offer startup business loans in Nigeria

There are three main institutions that offer startup loans in Nigeria. They are:

Commercial banks

commercial banks are arguably the top institutions that provide startup business loans in Nigeria. However, a majority of them require collateral as well as other strict requirements. As a result, this makes things difficult for businesses, especially startups looking to obtain a loan. Furthermore, they offer the highest loan amount too, because they are able to secure an equivalent value in assets from you.

Microfinance banks

microfinance banks are, in some way, a watered-down version of commercial banks. This is because they offer more or less the same services, but not at an equivalent capacity. In reality, microfinance banks offer you loans with less stringent rules and collateral requirements. However, they also offer lesser maximum loan amounts than commercial banks.

Development banks

some examples of development banks are the bank of industry, the African development bank, and the African agriculture development bank. They offer loans with collateral or not, depending on the nature and the amount involved. Also, these institutions focus on SMEs, which makes them favourable for startup business loans in Nigeria.

Conclusion

You can obtain startup business loans in Nigeria from either of the options discussed above. However, these institutions have different requirements and loan access conditions in place before granting your request. To obtain a loan, simply walk into any of these institutions and speak to an agent. He or she would run you through the process.

How to apply for a business loan in Nigeria

March 29, 2023 by Olamide Famuwagun

Businesses thrive on the availability of funding, which essentially provides the muscle to wrestle competitors and meet customer demands. However, these funds are not always available, as not every entrepreneur starts a business with bottomless pockets. As a result, knowing how to apply for a business loan in Nigeria is one of the most important parts of being a business personnel. In this regard, this article explores the procedures and eligibility requirements to successfully apply for a business loan in Nigeria. See some top business ideas in Nigeria you can start exploring.

How to apply for a business loan in Nigeria

Before applying for a business loan, it is necessary that you put together all the documents that you would need. The complete process of how to apply for a business loan in Nigeria simply includes:

Step 1 – Confirm your credit eligibility:

many financial institutions determine who they would and wouldn’t offer loans based on creditworthiness. Therefore, your company’s creditworthiness goes a long way in determining the success of your loan application. Furthermore, you can access this value through the CRC Credit Bureau. It is called the Credit Information Report (CIR). Essentially, your CIR comprises your credit transaction history and tracks all your previous and current loans. Also, it shows your loan repayment pattern and a poor pattern usually means they would turn your loan request down.

Step 2 – Compile all relevant business documents:

no financial institution offers loans without documentation. Rather, what varies is the documents they request. You can do yourself and your business a lot of good by compiling all the possibly needed documents before proceeding to apply for the loan. In addition, the documents usually include the following:

Personal and business tax statements for 1 – 2 years.
Bank account statement for the past year
Proof of ownership or title documents for any asset owned.
Business plan (especially if you are looking for funding for your business idea)
CAC business registration documents, shareholders’ agreement document
List of staff members on the payroll in the last year
Document showing income statement in the last 2 years

Step 3 – Research adequate loan companies:

The next step after determining your creditworthiness and gathering the necessary documents is to research loan companies. Several loan institutions have different eligibility requirements and conditions that surround their loans. Therefore, the trick is in you discovering the best that suits your needs. Also, consult with professionals and experts in your field to get guidance. Don’t go in blind, rather, select the best type of loan for your need.

Step 4 – Proceed to application:

The application process totally depends on the financial institution. Therefore, proceed to get the loan application form and fill it out. Also, it is important that you read the loan agreement form carefully before signing. This agreement contains late payment penalties, a breakdown of monthly payments, and hidden charges of the loan. In essence, you should do this to know when to seek legal counsel if unclear about clauses in the form. On submission, the institution then proceeds to carry out a credit check with the bureau.

Step 5 – Provide extra documentation:

Adding extra documentation to your application always makes it look more credible. Essentially, it involves you writing something like a personal statement or business plan and submitting it along with the loan application. Also, you can include other documents like your business model, financial statement and overall plan. This would increase your chances of securing the loan.

Conclusion

Loan application and disbursement procedures could take time, therefore, it may be wise to apply for a loan at a sufficient time before you actually need it. Also, numerous financial institutions offer loans suitable for different needs. The federal government has ensured Nigerians have access to loans via the development bank. In the end, it’s all about finding the most favourable for your company.

Types of loans In Nigeria

March 27, 2023 by Olamide Famuwagun

In financial terms, a loan is a 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

There are two types of loans in Nigeria. 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 conditions of the loans.

Secured Loans

A secured loan is a loan that has the backing of 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 pay back.
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.

Other Categories of Loans that you should know about

Asides from the two major types of loans, we can also classify loans according to the following categories:

According to the mode of repayment

Single payment loans:

Just as the name implies, this loan allows you to borrow a certain sum of money, and repay at once. However, it also requires you to pay the amount in full at a go, and within a fixed time.

Monthly payment loans:

Monthly payment loans take the opposite turn compared to single payment loans and allow you to repay gradually. Furthermore, it is scheduled in such a way that you repay a fixed amount every month depending on the loan principal and interest. Also, the date on which repayment starts are fixed during the loan process.

Salary advance loans:

This loan tends to short-frame financial needs that arise before your paycheck. Also, it works by businesses subscribing to personal loan companies, therefore, giving their staff access to loans as a result. The loan is repaid by deduction from the staff’s next salary. Generally, salary advance loans come with high-interest rates and fees.

According to rates

Fixed rate loans:

Fixed-rate means that the loan keeps the same interest rate throughout the span of the loan. Asides from this, it could be any of the types of loans explained in this article.

Variable rate loans:

This is the opposite of fixed-rate loans because it comes with varying interest rates. Also, the interest rates are estimated based on certain changes to the underlying interest rate index. However, the rate has upper and lower limits, which cannot move beyond a time frame.

Installment loans:

Instalment loans are repaid with a set of scheduled payments. Usually, these loans could span really long (up to 30 years) or as little as a few months. A good example of an instalment loan is a mortgage. In essence, you borrow and pay up gradually.

Convertible loans:

These loans have a flexible nature and can be changed from one type to another. This means that they could start as a fixed-rate loan, but later switched to a variable loan depending on the situation.

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 a 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 work 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 it 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.

Startup Business Loans with no Collateral in Nigeria

March 24, 2023 by Olamide Famuwagun

A large portion of the loan unavailability in Nigeria is not actually because there are no loans. In reality, loans are readily available for businesses in the country. However, these loans have strict criteria and qualification requirements. Therefore, it is for this reason that they appear to be unavailable. One of the strongest barrier startups face is in providing collateral for a loan. This is because startups, most times, do not have existing assets, which disqualifies them from the majority of commercial loans. However, here’s a list of institutions that provide startup business loans with no collateral in Nigeria.

Top 13 Institutions that offer startup business loans with no collateral in Nigeria

The institutions that offer startup business loans with no collateral in Nigeria are:

1. Grofin:

this is an institution that provides investment services to businesses all around Africa and the Middle East. Also, their coverage includes South Africa, Nigeria, Ghana and Ivory Coast to name a few, and funds small and medium-sized enterprises. In context, Grofin offers a maximum amount of up to $1.5 million.

2. Smedan:

Smedan exists to finance and consequently develop small and medium-sized enterprises. However, they don’t only monitor, but also coordinate, initiate and articulate policy ideas for businesses in these sectors, helping them grow as a result.

3. Lydia.co:

This is an online lending platform for startup business loans with no collateral in Nigeria, Europe, and the US. Therefore, Lydia offers you an opportunity to expand your business and earn more. Their loans are available in three simple steps and offer amounts running into millions.

4. Aella credit:

Aella credit is a mobile Fintech institution that harnesses the power of technology to reach out to SMEs in the area of loans. Furthermore, they have a goal to build products and become the forerunner of financial inclusion in Nigeria and other West African countries. Their reach keeps expanding by the day.

5. Zedvance:

This is another loan lending institution that does not demand collateral. Zedvance allows you to apply for all to N5 million with a tenor of up to 18 months. Amazingly, you can complete the whole process and get credited in minutes.

6. Kiakia.co:

Kiakia.co does not consider your credit information to offer you loans. Instead, they make use of a complex machine learning and digital forensics algorithm to credit-score you. If successful, you are granted access to considerable sums for your business loan. Kiakia currently provides loans to millions of individuals and SMEs in the country.

7. One Fi:

One fi or previously known as one credit is a loan company that offers short-term services to SMEs. However, they carry out a background check on your creditworthiness before granting approval. Their loan tenor is around 3 to 6 months and has a maximum amount of N200,000.

8. C24:

C24 is actually a microfinance institution that was established with the sole purpose to help business realize their dreams. They do this by providing access to needed finance without collaterals. Also, C24 loan time is much quicker than conventional rates, and you can do their application process online for easy access.

9. Specta by sterling bank:

This is one of the rapidly rising loan platforms that offers financial services to SMEs and individuals. Specta is owned by Sterling bank and offers you an opportunity to access up to N5 million in 5 minutes. Furthermore, it is easily accessible and obtainable by corporate and business owners.

10. Fast credit:

Fast credit offers you short-term loans to support your business growth. However, it is compulsory that the loans are backed by guarantors although no collateral. Furthermore, it has a maximum tenor of 6 months for businesses that qualify for the loan.

11. Branch:

Although they offer startup business loans with no collateral, branch has a maximum limit of N150,000, which is considerably little. However, they offer loans to startups and individuals who are looking to plug in urgent gaps in financial needs.

12. Carbon (formerly paylater):

Paylater, which was later renamed carbon, is a completely online lending platform that allows you to obtain loans as a startup. Also, the loan spans up to N500,000 and does not require collateral. Amazingly, their application process is smooth, and they disburse the funds within 1 to 3 days of your application. Also, repaying your loan on time unlocks access to a higher maximum amount on your next loan.

13. Kiwipay:

Kiwipay is one of the best online money lenders that provide loans for businesses and individuals through their employers. Furthermore, they deduct the amount borrowed from your monthly salary. In addition, Kiwipay offers up to N2 million in loans, which is very impressive.

Conclusion

These institutions have made it far easier for citizens to access startup business loans with no collateral in Nigeria. If you intend to start a business, you should surely look to one of them for their services. An SEO expert in Lagos for instance could get a really good amount of money from these sources listed above to set up shop and be more efficient. An important thing to note is that you need to endeavour to study other details of the loan before committing and seek the help of a financial expert.

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