The number of Nigerians taking out personal loans online has risen steadily over the years, with an 18% increase from 2015 to 2017, according to data from the National Bureaux of statistics. To get urgent loans in Nigeria, one of the best options is an online personal loan. Here are some key factors to determine the right one for your circumstances.
Before you get a loan…
You first need to determine what your ideal lending situation is: Do you want a fixed or variable interest rate? How much can you afford for monthly payments? What length of loan do you want? How much can you afford in fees and other services? Your answers help you choose the right lender.
Ask for references
Word of mouth is such a powerful tool because it offers perspective from an unbiased party. Check with friends, family and colleagues for any recommendations, and you can also check with professional sources such as financial advisers like StartCredits. Anything from prior experience to knowledge about a unique lender in the marketplace can be useful when narrowing down the search. Assuming they aren’t getting a commission from the products they recommend, you should have a better understanding of your options once you ask for references.
After you’ve narrowed down your search by asking for references, you’ll want to go ahead and check the credentials of the remaining lenders. Once you have narrowed your list of potential lenders, you can check their credentials online. Banking departments have updated directories with information on lenders.
Secured and unsecured loans
There are two main types of personal loans: secured and unsecured. Each type comes with its own list of pros and cons, but it’s important that you, the potential borrowers, understand what each type looks like to ensure that you choose the best personal loan for you.
Secured loans are essentially when you offer an asset (something such as your car) as collateral if you fail to pay. The easiest way to think about a secured loan is that it’s secure for the lender. Even if you can’t afford to pay the loan back, the asset you offered as collateral ensures that the lender can get something back for the money the company gave you.
While the defining characteristic of secured loans is that you’re required to offer up assets as collateral, unsecured loans have no such requirement. If you don’t have any assets to offer, you can consider looking at taking out an unsecured loan. To even qualify for this kind of loan, you’ll probably likely need to provide the lender with proof of income to show that you’re capable of making repayments on your loans. While unsecured loans these are a great option for borrowers without assets, they unsecured loans aren’t the best option for everyone.
Lenders on average charge higher fees and interest rates than their secured loan counterparts. These loans also are known for their high fees for late payments. Lenders can go on to take legal action if you end up defaulting on the loan.