Applying for a loan in Nigeria can be a great decision or one that puts you in a financial problem you can avoid.
Getting a loan may be a simple process, it could be for a business or an emergency. Knowing what you’re getting yourself into is important to make the best decision possible.
Proper knowledge of what you need to know and prepare for will make your loaning and payment plan smoother than most.
To help you make better loaning decisions, here are 6 things to look out for
Why you are taking the loan
The reason you are taking a loan has to be clear as daylight, preferably with the details spelled out. Loaning companies will ask for your reason for applying for a loan and it keeps you in check. When you know what you are borrowing for, you are most likely to apply for an amount that matches the expense, and in that way, you don’t over-extend yourself.
Financial status
Do not take more than you can pay, review your cash flow. Cash flow is the amount of money your business earns monthly compared to the amount of money your business spends monthly. Be careful to be realistic with how much you can payback. Hope does not pay back loans, your money does.
There are options
Taking a loan is not as difficult as it used to be years back. There are a lot of options available. Banks, financial planners, loan agencies, do your research and don’t feel stuck with the most popular option.
Interest rate
This is the rate charged by a lender on the amount loaned to you. The interest rate, the tenure, and the amount you want to borrow are what determine your repayment so you must consider this before deciding to apply for a loan.
Interest rates differ from the provider. At Pennee our interest rates are from 1.5 – 3% monthly
Be careful, if the offer is too good to be true, it probably is.
Pay off plan
How you choose to pay off your loan is very important, is it a small loan you can pay off weekly? Monthly, Yearly? Having a plan in place makes the process smoother and guide you better on the type of loan you should get
Charges – Penalty/hidden
There are charges for not paying what you should pay at certain times while planning for everything to go according to plan. It’s important to weigh the fees you would be paying if you miss a payment bracket.