What then are the requirements to get a loan in Nigeria?
Taking a loan in Nigeria is becoming easier in this era of great improvement in technology but not without a few hurdles to cross.
Years ago, the long queue, manual documentation, verification are among others that pose a great obstacle to getting a loan in Nigerian banks. Things have definitely been shaped to the extent that you do not even need to step into a bank premise or loan provider’s office to secure a loan. Nonetheless, there are some loans that demand your physical presence.
So what do you need to get an emergency loan for your business, home or upkeep? These are the questions that this article is set to answer but meanwhile, before reading ahead. Understand that no loan provider or bank will give you a loan without income on a regular basis unless you have an asset or a great business plan that could convince the lender.
Lapo loan and fairmoney loan remain among the most popular credit providers in Nigeria with their requirements differ from one another. The major difference between the two is that lapo loan has several products under its name but fairmoney concentrates on giving personal loan.
Moreover, on lapo loan, you can get up to N5m loan while fairmoney only close the lid at just N150,000. There are several places to borrow money in Nigeria and even at a better rate and reasonable loan tenure in Nigeria.
Key requirements for getting a loan in Nigeria
Below are the common requirements to get a loan in Nigeria, same goes with loan apps found on play store:
- Phone number
- Residential address
- Employment status
- Bank details
- Date of birth
Other requirements needed to get a loan
#1. Bank Verification Number (BVN)
Bank Verification Number, which is also known as BVN is enforced by the Central Bank Of Nigeria to guide against illegal banking transactions. It is more like a security measure to reduce fraud in the system.
Since its inception, it has been more beneficial to the banking sector which as well makes their work easier. With the BVN, it makes it more convenient for the banks to connect dots. The unique number given upon BVN registration makes it easier for banks to get quick info across multiple accounts of customers.
For instance, if one owns an account with several banks in Nigeria, the BVN will help to gather info on other accounts. Banks and some financial institutions will always demand BVN so as to study your data which will be used to ascertain if you qualify for a loan or not.
#2. Credit Score
Every loan provider will want to access your credit score before giving out loans. Having a bad credit score could inhibit your chance of getting a loan.
To get a good credit score, ensure your income is good enough, pay debts on time and also make sure the phone number you used during your loan application is the same on your bank account.
When you are spending more than you earn, especially if it is not to fund your hustle or business idea. Your chance might be limited. If you are already running a business, prepare to hand over credit report of your business to the borrower.
Unfortunately, you might come across products that request for security before being granted a loan especially a mortgage loan, asset loan or big business loans. Therefore, if you are applying for such a loan, an asset will need to be identified. Such asset can be landed property, equipment or machinery.
However, if you do not want to provide collateral, you might need to make use of unsecured loan and there are several ones in your locality.
#4. Reason for the loan
You are going to state the purpose of the loan, although not that it determines the final decision. The only time it matters is if it is a huge loan which is most common with secured loans.
For most personal loans, the loan amount can be used for anything, including medical bills, children’s school fees, wedding, home improvement or to acquire gadgets. Space will be provided during registration on loan apps in Nigeria to write or select how you intend to use the loan amount.
#5. Age of the business
If the purpose of the loan is not for business, you can disregard this part. Still, who knows if you might need this piece of information.
To get a business loan, you must have been in business for at least one year, some banks actually require more than one year. This would have given you time to know in and out of the business, a move which could help your defence when seeking a loan to improve your business.
#6. The income of the borrower
The revenue of the borrower also determines the chance of a loan being approved. Most loans require borrowers to be self-employed or on salary.
At the point of registration, applicants must have a verifiable source of income. Notwithstanding, not all loan providers accept self-employed individuals but there are few that grant loans to them. Examples are C24 loan, fast credit, kiakia loan, swiss credit, and ferratum loan.
There are some credit products that required you to produce a guarantor in the absence of security. This is to help the loan providers protect her interest. The guarantor may be a level 14 public servant or an investor with a great amount of assets.
To facilitate it, the lender may request to see the guarantor so he can confirm his or her authorization. The individual will be fully briefed on the loan and what could happen if a borrower defaults on the loan payments.
While your loan is active, your creditor might contact the guarantor if you fail to pay according to the structure of your loan. In the event of default, the guarantor who has put himself forward for you will be liable for outstanding payments.
#8. Net operating income
In business finance and accounting, it is important to know the true measure of a firm’s strength which is done making use of Net Operating Income.
Net operating income, also known as NOI is a computation used to examine income-generating asset of a business. This is done by removing all operating expenses including taxes and interests from revenue that a business generates.
To understand your business and the likelihood of paying back; loan providers will want to be privy to your revenue plus other payment obligations.