In the age of greater access to loans driven by online lenders, bankruptcy remains one of the more misunderstood topics in Nigerian personal finance. The confusion and myths surrounding bankruptcy in Nigeria remain in part due to a lack of information on how to get a Loan After Bankruptcy in Nigeria.
The Nigerian bankruptcy act of 2004 states a debtor commits an act of bankruptcy if “a creditor has obtained a final judgment or final order against him for any amount, and execution thereon not having been stayed, has a bankruptcy notice served on him”.
Whether you are going through bankruptcy now or considering it as a future course of action, it’s important to remember that people who experience bankruptcy aren’t consigned to financial ruin for life. Instead, bankruptcy is designed to help someone in financial trouble start fresh. Starting fresh means starting your life over, and for many Nigerians, that could involve a post-bankruptcy loan.
How to Increase Your Chances of Loan Approval after Bankruptcy
The first step to increase your chances of getting approved for a loan is to increase your credit score. While your bankruptcy will remain on your credit report for years, taking steps to build your credit score after bankruptcy does not go unnoticed. These include:
- Apply for a secured loan and pay off the balance every month
- No missed bill payments
- Ensue you keep your credit utilization rate to less than 50% of your overall credit allowance
Be Wary of Harsh Loan Terms
Unfortunately, applying for any type of credit after bankruptcy is more complicated, and you may be turned down by several lenders. Due to the difficulty in obtaining credit, Nigerians who have been through bankruptcy are a target for loan sharks. When evaluating a company as a potential lender, make sure you use our loan comparison search engine.
If you are offered car loan financing from a company that specializes in lending to Nigerian borrowers who have been through bankruptcy, make sure to read through the fine print, every last bit of it. In particular, be on the lookout for high interest rates, as anyone with bad credit should expect to pay a rate as high as 45% per month in Nigeria.