How to choose the right personal loan lender in Nigeria

Choose the right personal loan lender


Choosing the right personal loan lender in Nigeria involves several critical factors. Firstly, it’s important to compare interest rates, as these vary between lenders and can significantly impact the total loan cost.

Fixed interest rates provide stability, while variable rates can fluctuate. Fees, including origination and late payment fees, alongside the interest rate, contribute to the total loan cost. The Annual Percentage Rate (APR) gives a comprehensive picture of the loan’s total cost. Repayment terms, varying from 3 to 48 months, affect the overall cost, with longer terms generally resulting in more interest paid. Assessing a lender’s reputation through online forums like Nairaland can provide insights into their practices and service quality.

It’s crucial to understand all penalties associated with contract breaches, such as late or missed payments. Thoroughly reviewing the terms and conditions, possibly with legal assistance, is essential to avoid unfavorable terms. Lastly, loan flexibility, in terms of repayment terms and fees, should suit the borrower’s needs for convenience

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Choosing the right personal loan lender in Nigeria can be a difficult and time-consuming task.

This is because you have to spend hours individually researching each lender to highlight and compare important factors before you can choose.

Lenders in Nigeria do not always provide information up front. You might have to do it through web pages, make calls and wait for days for feedback.

Luckily, you don’t have to waste time and energy with Credit Nigeria. All the information has already been gathered and properly collated so you can access it with only one loan application.

With one loan application to Credit Nigeria, you can get all the available loan options in minutes. This allows you to easily compare and get the right loan option for you within 5 minutes.

Credit Nigeria saves you time, energy, and money on loan applications.

Factors to consider when choosing a personal loan

There are important factors to look out for when choosing a personal loan lender. These factors allow you to pick the best loan option that fits your current needs at any point in time. They are:

    • Interest rate

    • Fees

    • Annual Percentage Rate (APR)

    • Repayment terms

    • Lender’s reputation

    • Penalties

    • Terms and conditions

    • Loan Flexibility

Interest rate

An Interest rate is the percentage of the loan amount that lenders charge for borrowing money.

This is one of the three major factors to consider when taking a personal loan because it is the direct amount you will have to repay on top of the borrowed money when you take the loan.

Different lenders have varying and competitive interest rates depending on many factors.

There are two major types of interest rates:

    • Fixed interest rate

    • Variable interest rate

A fixed interest rate means that the interest rate will never change during the lifetime of the loan. A variable interest, on the other hand, changes.

Fixed interest rates make it easier to calculate the total interest rate on a particular loan option while variable interest rates are more difficult and risky. As an example, a 3% fixed interest rate on a 5-month loan is better than a 5% variable interest rate on the same tenure. The 5% variable rate might only go as low as 3% in the end.

Reputable lenders in Nigeria consider your credit score before granting you interest rate options. A good credit score means lower interest rates, while a poor credit score means higher interest rate options.


Personal loans in Nigeria may or may not come with fees. A fee is any extra amount you pay apart from the interest rate on a personal loan.

These fees might include origination fees(also known as procurement fees), application fees, late payment fees, and others.

Fees are also part of the three most important things to consider before choosing a personal loan alongside interest rate and loan tenure.

Additional fees and interest rates together can give you an accurate representation of the total cost of the loan. Some personal loan options can have low-interest rates but the fees might make the overall cost much more expensive than a loan with a higher interest rate.

Annual Percentage Rate (APR)

The annual Percentage Rate (APR) is a total measure of the cost that the loan represents, including fees, charges, and the interest rate itself; it is the overall cost of the loan.

When comparing loans, it is better to compare the annual percentage rates of all the loans and not just interest rates since interest rates are not a complete representation of the total cost.

Repayment terms

The repayment terms on a loan are the conditions of repayment of that loan. It refers to the length of time you have to repay the loan, the mode of payments, and the schedule in which you need to make the repayments.

This varies greatly between lenders, so it’s also very important to compare the available options. Currently, personal loan terms in Nigeria can vary from 3 months to 48 months.

It is important to remember that the length of the loan will impact the total cost of the loan. A longer repayment term will result in more interest being paid over time, so it is always best to carefully consider your budget before choosing a repayment term.

Different lenders in Nigeria have different repayment schedules depending on the situation involved. While some may require you to pay weekly, others may approve of you paying every two weeks or monthly.

Some lenders will charge fees for late or missed payments, so it is important to ask questions and to know the full extent of the repayment terms.

Lender’s Reputation

When it comes to the reputation of a lender in Nigeria, the internet is never wrong. No matter how a lender tries to hide bad practices there are forums, such as Nairaland, that have individuals that will expose the lender.

The same goes for lenders with good services, as there will be individuals there also that will testify to such services.

Checking a lender’s reputation online before you apply for a loan can save you a lot of time and energy.


Personal loan contracts in Nigeria often attract penalties in the case of a breach of the contract.

Late payments, missed payments and even sometimes early payments might attract penalties. It is always best to thoroughly consider all the penalties involved before accepting the terms and conditions of a loan.

Terms and conditions

The terms and conditions of a loan are as important as the loan itself. Individuals and businesses can enter more debt by not fully understanding the terms and conditions of a loan.

It is always best to hire a legal practitioner to look through the terms and conditions on your behalf as they have been trained to spot discrepancies and know when harmful terms and conditions have been slipped in against you.

Whatever it would cost to hire a legal practitioner, is always very small compared to the price that will be paid if there are unfavourable terms and conditions in the loan contract that has been signed.

Loan Flexibility

Loan flexibility refers to how much convenience a loan offer can offer to a customer. It is always best to choose loan options that are flexible in terms of repayment terms and fees.

Do you need to borrow, and how to know how much to borrow?

Sometimes, you don’t necessarily have to borrow money, and even when it is necessary you have to carefully determine the amount of money to borrow.

This should be majorly based on your ability to conveniently pay back the loan. A quick account of your finances should reveal the amount you can take.

Generally, it is never advisable to borrow much more than you know you can repay as this might lead to terrible financial consequences going forwards,

Frequently Asked Questions

How would I know if the loan is right for me?

Different types of instant loan options fit different individuals and businesses at different times. Since only you can determine your needs at any particular time, you can check from the available options what is convenient for you at the particular time, and what is not.

Once you qualify for loan options, your income or employee status, the purpose of the loan, your expenses and other factors can help you decide the best fit for you.

What is the most important factor in choosing a personal loan?

The Annual Percentage Rate (APR) is the most important thing to consider. Assuming you’ve fulfilled the basic requirements by searching out credible loan options (a requirement that can be easily fulfilled with Credit Nigeria), you can easily know the value of loans by comparing the APRs. The APR represents the overall cost of the loans including the interest rate, charges, and fees and it can give you a very clear picture of how much a loan will cost you at the end of it all.

What should I do if I have chosen a bad personal loan option?

The first thing to do is to stop and evaluate how deep you are in the personal loan. If you can still stop and retrace your steps, do that. If you cannot, then you have to see the loan through as there is no way to “get out” of a personal loan option once you have signed the terms and conditions and you have received the loan.

This is why it’s always efficient to use Credit Nigeria when searching for loan potions. With Credit Nigeria, you can never choose a bad personal loan option.

Is the interest rate the same as the Annual Percentage Rate (APR) for a personal loan?

No. The interest rate is the percentage of the loan amount that lenders charge for borrowing money. The Annual Percentage rate is a total measure of the cost that the loan represents, including fees, charges, and the interest rate itself; it is the overall cost of the loan.

If there are no fees, charges, closing costs, or penalties, the interest rate and the annual percentage rate will be the same.

Is it good to take secured personal loans?

This depends on the individual or business that wants to take the loan. Secured personal loans are loans that require collateral but have very low-interest rates since the risk is low. Secured personal loan offers from banks are a great option for established businesses and individuals who are sure of their abilities to pay back the loan. Individuals, especially salary earners, looking for quick loans to make ends meet are better off taking unsecured personal loans.

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