Loans according to banking finance can be defined as a sum of money or other valuables or consideration that an individuals group or a legal entity (the latter often being a financial institution e.g a bank ) with the condition that it be returned or repaid at a later date (sometimes with interest). People ask for loans maybe for business or for personal purposes it comes more on monetary terms. Before someone would get a loan he/she has to have a collateral – collateral is a property a borrower offers as a way for a lender to secure a loan, if the borrower doesn’t keep up with the terms of the payments the lender can seize the collateral to recoup his loses . Nigerian bank loans include both use of collateral and non-collateral
In order to get help using the Nigerian bank loans there are tips and things you should have in mind and know, they include;
1 You should apply for a loan formally : All loans must require that you apply to the bank formally as such it is important that you are able to articulate your needs in your letter of application
2 Banks charge interest on a per annum basis and they are not fixed: bank offer a 20% interest on a loan it is per annum and not per month also the interest rate offered to you by the banks often have a caveat in the offer letter that allows them to increase the rate whenever they feel the market conditions require it.
3 Interest rate and terms and conditions differ from bank to bank : some terms and conditions of banks might favor you while others might not. It might favour in terms of lower interest rates they might offer shorter repayment periods.
4 Never ignore the terms and conditions from a bank where you borrow money from: when banks gives a borrower an offer letter it is usually advisable to read through and follow this set of rules called ” other terms and conditions”
5 Banks always ask for a collateral or some form of security: collateral has been defined before in this article .collateral can come in form of a landed property, asset, or even personal guarantee.
6 Banks have hidden charges : banks do have cost which they don’t tell you when you apply for a loan, of course they don’t want to scare you away.
Securing Nigerian bank loan can be more difficult than many other places around the world in order to do this having the right information and getting your organisation prepared is the easiest way to be certain that one day you will get qualified for the finances your organisation deserves.
you just got lucky today as their are banks which gives loans without collaterals thereby reducing the stress that comes with getting Nigerian bank loans, those banks include
first bank plc
According to Mr. Oluwafemi Akinfolarin, First bank’s head of SME Banking “getting loans without collateral is part of our contribution towards boosting the growth of the SME segment “. Most SMEs don’t have collateral to secure loans .With this now ,all a prospective borrower is asked to do is to go through a psychometric test. Once the SME passes it, we advance the loan .that is a cutting edge innovation.
first bank offers the best terms when it comes to getting loans as it is designed to be easily accessible to entrepreneurs irrespective of the type or size of your business.
According to Mr Chima Nnandozie ,Head, MSME propositions,”presentations of a collateral security is no longer a bid deal for it to consider applications for , and grant loans to prospective and existing entrepreneurs in Nigeria’s micro, small and medium scale enterprises (MSME).
The bank require that the borrower will need to open a cooperate bank account with diamond bank before you can apply for its SME loans
Stanbic IBTC bank
The loans from this bank is designed to help SMEs buy assets ,but the assets only becomes the borrower’s when he/she makes the last payment on the loan.
To apply for a non collateral in this bank, you will need to provide the bank with the following information;
* Full names and capacities of those who will sign
* CV of each member of the management team
* The reason why you need the loan
* Your business financial statements
* Personal statements of assets and liabilities of all the partners, members or directors
* A 12 month cash flow forecast
* The amount of your contribution and the source of the funds
* If you do not have a business account with Stanbic bank, you must provide the business bank statements for the past six months.
Before approaching any of the listed banks above it is advisable to open, run and maintain an account not just an account a cooperate one preferably for a period of time ranging from 3-6 months .the borrower should also be armed with a sound business plan and a solid repayment plan for the loan.
To ask for loan from any bank in Nigeria, visit any of the branch closer to you and ask any of the bank officials for directions.