Interests Rates for Personal Loans in Nigeria

Interests Rates for Personal Loans in Nigeria

The interest rates for personal loans in Nigeria vary widely from personal loan and personal loan, and lender to lender.

As one of the most important factors to consider when taking a loan, the interest rates for personal loans across all mediums of lenders in Nigeria can go as low as 5% and as high as 30%. 

With one simple application through CreditNigeria, you can easily compare the interest rates from reputable lenders for free.  This enables you to quickly get the best loan offer for yourself without the hard work of comparing options through research one by one.

Factors that influence interest rates in Nigeria

Interest rates determine how much must be paid by the borrower to the lender in addition to the original loan amount, which is called the principal amount.

Many factors affect interest rates on personal loans in Nigeria. These are:

  • Creditworthiness of borrower
  • Lender’s risk tolerance
  • Loan amount
  • Repayment term
  • Collateral
  • Monetary Policy Rate (MPR)
  • Economic state

Creditworthiness of borrower

The interest rates for personal loans in Nigeria reduce with the increasing creditworthiness of a borrower. This means that lenders will charge less for loans to borrowers that represent lesser risks since they are most likely going to pay back.

Creditworthiness is a significant factor and borrowers with good credit scores, stable employment, and a solid income history are more likely to get lower interest rate offers than borrowers with poor credit history and limited income.

Lender’s risk tolerance

The type of lender also greatly influences the interest rates on personal loans in Nigeria. Lenders who take more risk are most likely to offer high-interest rates since they lend to individuals who other lenders with less risk appetite might not lend to.

Commercial banks also charge higher rates than microfinance banks and peer-to-peer platforms.

Interest rates for online lenders vary widely and can sometimes be higher than all the other mediums.

Loan amount

Higher loan amounts often have lower interest rates while lower amounts have a higher interest rate. This is because the risk is spread over a large amount.

The loan amount is also a very significant factor that affects interest rates in Nigeria.

Repayment term

The repayment term is the length of time that will take for the loan to be repaid.

Longer repayment terms usually have higher interest rates while shorter repayment terms have lower interest rates.


When collateral is involved in a loan process, such as some form of property owned by the borrower, the interest rate is usually lower.

This is because the risk a lender will take on the loan is significantly lesser since they can take control of the property to recover their funds in the case that the borrower is not able to pay back the loan.

Monetary Policy Rate (MPR)

In Nigeria, the Central Bank of Nigeria (CBN) regulates lending rates with the Monetary Policy Rate. This rate affects the cost of borrowing, including personal loans. If the rate is increased then the interest rates are increased.

The CBN’s MPR is currently at 15.5%.

Economic state

The state of the economy also affects lending rates in Nigeria since it is what drives the Central Bank of Nigeria’s Monetary Policy Rate. If inflation increases, the MPR increases, effectively increasing interest rates.

Interest rates to expect for commercial banks in Nigeria

Commercial banks naturally have interest rates more than most other mediums in Nigeria. The interest rates can range from 12% to 22%, always depending on the factors mentioned above.

Consumers must understand that banks are orthodox and they must provide proof of income, acceptable credit score, and sometimes collateral to qualify for personal loans from banks in Nigeria.

Interest rates to expect for online lenders in Nigeria

Interest rates for online personal lenders range from 10% to 30% depending on the factors mentioned above.

Online lenders usually offer lower interest rates than commercial banks to customers with good credit scores. It might however be tedious to search out the best online personal loan offers with the best interest rates since there are numerous lenders online.

If you are looking for the best interest rates for online lenders, use CreditNigeria.

If you do not wish to apply through CreditNIgeria to reputable online lending partners, then you must take extreme caution. This is because most other online lenders may have hidden fees or unfavorable repayment terms that may cost you more in overall fees.

Interest rates to expect for microfinance banks in Nigeria

Microfinance bank interest rates are typically lower than traditional banks. These personal loan packages can be used for many purposes including but not limited to business expansion, education, and medical emergencies.

The interest rates range from 5% to 15%. 

It is always useful to know that the repayment terms for microfinance loans are often shorter, and terms and conditions are usually more strict as borrowers have to repay the loan by the due date unfailingly.

Interest rates to expect for peer-to-peer platforms in Nigeria

The interest rates for personal loans through peer-to-peer platforms range from 10% to 20%. This medium represents a great opportunity for people who cannot access traditional banks and who have low credit scores.


CreditNIgeria offers you a simple way to compare interest rates to get the best personal loan package for you. 

With just one application, you can easily compare loan offers and interest rates from multiple lenders.

Interest rates on personal loans in Nigeria vary from lender to lender and from borrower to borrower depending on factors ranging from creditworthiness to the loan amount.

Frequently Asked Questions

Which lender gives the best interest rates on personal loans in Nigeria?

Lenders give interest rates according to many factors. Most of these factors depend on the borrower’s credit history and the loan amount requested. 

Will the interest rate reduction if I can provide collateral?

Yes. Interest rates for secured loans are always lower than the interest rates for unsecured loans because of the risk level involved. Providing collateral means that the loan is secured, this allows the lender to recover the money lent in the case of a default. So the interest rate drastically reduces when collateral is involved.

Are interest rates the overall costs of loans?

No. The overall cost of a loan is called the Annual Percentage Rate. The Annual percentage rate comprises the interest rate, charges, and all additional fees that might be involved. The interest rate is only equal to the overall cost of the loan when there are no other charges or fees, in which case the interest rate is equal to the annual percentage rate.

What is an acceptable interest rate on personal loans?

This entirely depends on the loan amount, repayment term, creditworthiness of the borrower, and type of lender. The range for interest rates on personal loans in Nigeria is 5% to 30%, so anything within that can be considered acceptable relative to these factors.

Can I get a loan with a zero interest rate?

Yes. You can get loans with zero interest rates if you consider taking loans from friends and family who are willing to finance you without interest. You can also consider lending money from charities, groups, or religious organizations who are familiar with you in your area.