Home loans in Nigeria exist to help with such lump-sum payments as those for home purchase, rent, repairs and decorations for residents of Nigeria. In this article we guide you on the optimal loan tenor for your needs.
How are home loans in Nigeria processed?
How are online lenders able to approve personal loans so quickly? They typically use specially designed software to consider a borrower’s potential risk factors quickly and easily. Combine that with rapid decision-making, and you end up with a faster process.
Online lenders also hold the speed advantage when it comes to getting you the money once you have been approved for a personal loan. They can make funds available to borrowers much faster than their traditional counterparts, sometimes as quickly as within 24 hours.
Online lenders tend to cost less money to run. Lower operating costs mean online lending companies need less money from you to remain profitable. The money these companies save directly translates into you having access to better rates and smaller personal loans.
The amount of the loan has to bear a reasonable relation both to the purpose for which it is required and to the customer’s means. The rate of interest is fixed for the whole period of the loan. Repayment is usually made by monthly installments.
Is it too much?
This is perhaps the most obvious question. Customers may feel that obtaining a loan involves a kind of haggling process, by which asking for more than is needed may lead to an agreement by the bank to lend the amount required. There is some truth in this, but competent and experienced lending staff should not be misled by the` haggler’. If a customer cannot justify borrowing the amount asked for, simply offering a little less is not a sensible alternative. If, however, a customer includes in estimated figures a sum for contingencies or emergencies this will be seen as a sign of careful planning.
Is it too little?
This less obvious question is probably more important than the first. Understanding how the money is to be used, for example by seeing detailed costings, helps the lender to judge whether anything important has been missed out. If too many items have been ignored the customer’s financial capability may be suspect.
Lenders also need to be aware of the problems they face if they do lend too little. If a business has borrowed N100,000 but needs another N200,000 to keep going because it borrowed too little in the first place the bank will need to spend far more time than it intended in analyzing the situation again; in the end there may be little choice but to lend more to avoid losing money on the original loan. If the lender had realized at the outset that N120,000 would be needed a decision could have been made on that basis.
How does the loan compare with the borrower’s contribution?
When a bank lends money it can lend the whole amount the customer is going to spend , but in general banks prefer to see some contribution from the borrower. This suggests that the customer has been able to save up some of the money needed, a useful indication of an ability to make repayments. When a business borrows money the funds which the owners put in, the capital resources, are particularly important because they mean that the bank is not taking on all the risk of loss if the business does badly. Bankers often feel that in business lending the owners should put in at least as much money as the bank, but this idea of a 1:1 ratio of invested money and borrowed money is not an absolute rule to follow in all cases.
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