5 Tips You Must Know When Applying For A Bank Loan In Nigeria.

5 Tips You Must Know When Applying For A Bank Loan In Nigeria.

Applying for a Bank loan in Nigeria sometimes is consider to be a difficult task. But on a serious note, there must always be a way out one can easily seek for bank loans.

Individuals at some point in their life may also need bank loans to help fund the purchase of a business vehicle or personal car, mortgage for a house or buy household appliances and others.

This post will give you guides on steps to take to apply for a bank loan.

See Tips Below When You seek for a bank loan:

  1. You need to formally apply to a bank for a loan – When most people think of approaching a bank for a loan, they commonly ask for a business plan. However, not all businesses require a business plan. But all loans must require that you apply to the bank formally as such it is important that you are able to articulate your needs in your application letter.
  2. Banks charge interest on a per annum basis and are not fixed– Banks charge interest rates of the month but per annum. What this means is that when a bank provided 20% interest on a loan is not per annum and monthly. For example, when you apply for a loan N1million for a 3 month tenor at an interest rate of 20%, interest will be N50,000. Which is 20% of N1million share for only 3 months out of 12. However, it can actually be lower depending on how often you will repay the principal. Meaning if you repay N300,000 at the end of the first and second month and N400,000 for the third month, your interest will be 20% of N1m the first month = N16,667. A two month will be 20% on the same N700k = N11,667 and finally N20% on the same N400k = N6,667. A total now N35k. The interest rates offered are not cast in stone as banks often have a warning in the offer letter and that no more money whenever they feel the market conditions require it.
  1. Different banks offer different interest rates and terms and conditions – Just the way the price of goods and services differ in the market so does the interest rates and terms and condition banks offer. Whilst some might favor you in terms of lower interest rates they might offer shorter repayment period.
  2. Never ignore the terms and conditions – When gives you an offer letter they aways include a set of “Other Terms and Conditions” or “OTC”. Usually, they differ from the conditions like collateral, interest rate, tenor (Terms and Conditions or TC) that most people prefer to look at. The issue, however, is that when a loan goes bad and a bank takes you to court it is not the TC that often matter. The OTC is probably more important as it typically contains those issues that determine what the bank can do in the event of a default.
  3. Banks always sought a guarantee or other form of security – Banks regardless of the loan you ask for will seek some form of security. It can be landed, property or personal guarantee. A time to remember to register the claim that evidence in court and sometimes they do not. When they are not at risk to lose claim to assets in times of old. But do not be fooled by the court can still recognize any encumbrance or if it is not registered.

5 Tips You Must Know When Applying For A Bank Loan In Nigeria.

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