The Application Process for a Personal Loan in Nigeria 

Application Process for a Personal Loan in Nigeria 


In Nigeria, obtaining a personal loan begins with selecting a lender, a task made easier with tools like CreditNigeria.

Applicants must meet certain criteria, including having a Bank Verification Number, proof of identity and income, utility bills, a good credit history, and being of legal age.

Lenders assess applications based on factors like loan purpose, amount, income, credit history, and employment status. Approval times vary among lenders, ranging from minutes to a week. Once approved, the borrower signs loan documents, and funds are disbursed, typically within 1-7 days.

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The application process for a personal loan in Nigeria starts with a borrower picking up an application form for a loan and ends with a lender either approving or denying the loan.

In some cases, a lender will provide a counteroffer for a loan after closely accessing the capabilities of the borrower from the information provided.

To begin the process, a borrower must first identify a suitable lender, this process might be time-consuming and energy-draining since many lenders have different advantages and disadvantages in Nigeria.

This is where CreditNigeria Comes in.

CreditNigeria is an online loan tool that helps you find and compare all the available and legitimate lenders in Nigeria with one swift application.

The Requirements for a personal loan

Before a borrower can fill out an application form for a loan in Nigeria, they must be aware of all the requirements of the specified lender. In Nigeria, the general requirements for a personal loan include:

    • Bank Verification Number (BVN)

    • Proof of identity (name, address, phone number, identification card, etc.)

    • Proof of income (3-6 months bank statements, salary slips, etc.)

    • Utility bills(Water bill, PHCN, or rent agreement)

    • Acceptable credit history

    • Legal Age

To know more, or to know all about the requirements and why each is required, go here. You can also find uncommon requirements that lenders might ask for in Nigeria.

Once a borrower is aware of all the possible requirements and they have gathered all the needed details they can proceed to fill out the form and submit it.

After submission, the loan decision now lies with the lender. The lender will then assess the loan application and answer within a specified period.

Factors considered by lenders during the loan application process

Generally, the requirements requested by each lender are used to judge creditworthiness.

Creditworthiness is the most important thing to lenders as it informs them whether a borrower will be able to comfortably pay back the loan given. If a lender has no guarantee of getting back the loan amount, with the specified interest, within the specified period, no loan offer will be provided.

The factors that are heavily considered in the loan application process are therefore:

    • Purpose of the loan

    • Loan amount

    • Proof of income

    • Credit history

    • Credit report

    • Age

    • Utility bills

    • Employment status

    • Debt-to-income ratio (DTI)

    • Length of credit history

Purpose of the loan

The purpose of the loan requested is an important factor that influences the decisions of lenders. A glance at the purpose of a loan requested by the borrower alongside the other factors can inform lenders if the application is worth the risk.

Alongside risk evaluation, the purpose of the loan helps lenders to outline the terms and conditions of the loan accordingly as each loan purpose has unique risk levels and financial implications.

Since personal loans can be used for a variety of purposes ranging from medical expenses to making upgrades in the home the purpose of a loan, understanding the exact needs of a borrower helps lenders make informed decisions.

As an example, requesting a heavy loan sum to sort out medical expenses might be an indication of financial instability and might also indicate the presence of existing debts and little support from family members. This can represent a red flag to most lenders, and it will impact the loan approval decision or/and the terms and conditions.

In the same way, a loan sum requested for home renovations may inform the lenders that a borrower is financially stable and has a steady income, thus presenting a little risk to lenders.

Lenders often consider the loan amount requested as the purpose of the loan as larger loans will be approved for purposes that lenders deem secure.

Credit report

Lenders use credit reports to check the attitude of prospective borrowers toward using credit. A bad credit report means that lenders will take a higher risk dealing with a borrower and that the borrower is likely to default on the loan. This greatly influences the loan application decision process.

Your credit report is a snapshot that shows your credit score, credit utilization, debts, accounts, and payment history. With a glance, lenders can determine if a borrower is creditworthy or not.

To know more about what a credit report is, and how it can be used, check here.

Credit history

Lenders often assess the credit histories of prospective borrowers alongside their credit reports. If a borrower has a high credit score, low credit utilization, and strong payment history, they are more likely to be financially stable and less likely to default on a loan.

Loan amount

This is one of the most important factors lenders consider in the loan application decision process. Lenders can immediately assess the financial needs and determine the methods of repayment alongside terms and conditions on loan applications with a glance at the loan amount requested.

It is usually weighed against the income of the borrower to determine repayment capacity or the financial stability of the borrower. If the loan amount requested is higher than the borrower’s income then there is a high risk of default, in which case the loan application might be denied.

Additionally, lenders compare the loan amount requested to the borrower’s credit history and credit score. The better a borrower’s credit history, the larger the loan amount that can be approved as the risk is considerably lower.

Proof of income

Proof of income is a major indicator of creditworthiness. A borrower with a steady income is much more likely to pay back the loan therefore lenders rely heavily upon the streams of income of borrowers to make informed decisions.

When a borrower’s income stream has been assessed, lenders compare it to the loan amount requested by the borrower to determine the level of risk associated with the borrower.

Borrowers with great credit histories and scores, alongside solid streams of income can get high loan amounts at low-interest rates since they are more than certified to pay back the loan.


Lenders set a minimum age requirement that can range from 18 to 25 in Nigeria. Borrowers who fall below 18 years, or the specified minimum will have their loan requests denied.

Older borrowers who fall below the maximum age, which is usually 60, with stable incomes and longer credit histories are more likely to have their loan applications approved as they have more experience managing their finances and represent a higher chance of paying back their loans.

Utility bills

Lenders view the timely payment of utility bills as a sign of financial stability. The amount paid is also an important factor considered.

As an example, a borrower that buys electricity units in bulk and pays for the maximum available DSTV/GOTV plans is seen as more financially stable than borrowers who pay lesser. Late payments of utility bills, or even missed payments can show lenders that a borrower might be irresponsible with repayment of the loan.

Employment status

Lenders consider borrowers who have stable jobs as having lower financial risks. Alongside a steady income stream, a stable job is a strong indicator that a borrower will be able to conveniently repay the loan. A letter of confirmation from an employer is needed to confirm this status for employees.

Customers who have full-time employment from an organization, a steady monthly income, and great credit reports are more likely to receive high amounts with low-interest rates.

Debt-to-income ratio (DTI)

Lenders heavily rely on the debt-to-income ratios of borrowers since it is based on income and existing debt. A DTI is calculated by dividing a borrowers existing debt by their gross income.

A high DTI, typically above 50%, shows lenders that borrowers might not have the ability to repay the loan, which may end up with the loan application being rejected.

Some lenders may consider giving loans to borrowers with high DTI. These loans will however come with unfavorable terms, uncomfortable loan repayment times, and high-interest rates since the lenders are taking higher risks.

Length of credit history

The length of credit history is always compared to the credit history of the borrower. A longer history indicates a better credit record overall and a lower risk of loan default. This helps lenders to have a more complete picture of a borrower’s financial behavior.

Application process time frame

The time it takes to consider, investigate and verify all these factors vary from lender to lender.

While some lenders boast approval times of 5 minutes others might take as long as 7 working days.

Frequently Asked Questions

Can I get a loan approval within 5 minutes for a personal loan in Nigeria?

Yes. There are legitimate online lenders in Nigeria that can grant you loans within five minutes of an application.

What can I do to speed up the application process time?

No. There is absolutely nothing that no effort that can be applied as your role is to make sure that all the information required by the lender is available and accurate. After you apply, it depends on the lender to assess the information and either confirm or deny the request.

Are there any personal loan lenders that guarantee a 100% approval rate?

No. Every loan application decision is weighed individually, and no legitimate lender will offer you a 100% approval rate. If a lender offers you a 100% approval rate, they mean to scam you.

Will the presence or absence of collateral influence my application process?

No. Secured and unsecured loans are processed independently.

What should I do if the application process takes too long?

Each lender has different time frames for their application process. It is always best to ask how long it will take for a particular lender to make a decision. If the period exceeds the given time then you should contact the lender to obtain feedback. In most cases, you will get your approval or denial within the specified time since application processes follow step-by-step procedures.

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