Small personal loans in Nigeria are usually lowered amounts ranging from N5000 to N50,000 granted to individuals including artisans, salary earners, and other self-employed by digital Money Lenders in Nigeria
The small loans granted by loan companies are usually short-term with relatively high interest based on the income of the applicant. The loans are usually unsecured and quick to be disbursed due to the technology used by most digital loan companies in Nigeria. The loans are usually required to meet an urgent financial emergency and to support a temporary personal or business capital need, most especially in this difficult season in our nation’s history. A self-employed with a sudden cashflow issue can use small loans to resolve the problem also.
This type of loan involves repaying the principal loan amount with interest by a given date, which is usually within One to Three months. Lately, loan services in Nigeria such as KwikPay Credit, have increased the minimum tenure allowed for repayment of small loans in Nigeria, to 62days, over 2months, to allow customers —- both income earners and small business owners —- to spread their loan repayments within the period.
Small loans are a valuable option, especially for small businesses like shop and market traders, and start-ups that mostly do not have access to loans from Banks.
Understanding a Small Loan.
Small loans are unsecured emergency short-term loans that are relatively easy to obtain from various loan apps in Nigeria.
Although. If not properly managed, small loans from loan apps can become a debt trap for some customers who find it difficult to claw back out of the debt they have accumulated from these online loans.
Before taking out a quick small loan from apps in Nigeria, consider the repayment plan so as not to be a prisoner of your own choice.
Most lenders have automated their repayment collection which is typically done by the lender taking out an agreed amount from the borrower’s bank account, using direct debit.
It is also relatively easy to get loans from Money lenders where everything is done online – from the application process to approval. Within minutes of getting the loan approval from a lender, the money is disbursed to the borrower’s bank account.
How Small Loans Work.
Most money lenders will normally require you to show proof of your income or salary, usually your bank statement of account that shows how much your business generates or in the case of a salary earner, what the employer pays every month.
The customer will then be borrowed a portion of the money that you are being paid. The loan will have to be paid back within a short time, generally 62 days or less, as allowed by a loan service like KwikPay Credit.
For the small loan application, you will need a bank account and national ID like a driving licence or voter’s card. You will also need your BVN or NIN, also need to provide proof of income, which can be done through your bank statement of account.
Additionally, your income may function as collateral where the lender can automatically receive a portion of your salary or business (Payment Plan Mandate) income for the loan to be paid back.
Advantages of Small Loans.
There are many advantages for the borrower in taking out a loan for only a brief period, including the following:
1. Shorter time for incurring interest
As small loans need to be paid off within a few months, there are lower total interest payments. Compared to long-term loans, the amount of interest paid is significantly less.
2. Quick funding time
These loans are considered less risky compared to long-term loans because of a shorter maturity date. The borrower’s ability to repay a loan is less likely to change significantly over a short frame of time.
3. Easier to acquire
Small loans from Digital lenders are the lifesavers of smaller businesses or individuals who may not have access to loans from Banks. The requirements for such loans are generally easier to meet, in part because such loans are usually for relatively small amounts, as compared to the amount of money usually borrowed on a long-term basis.
Disadvantage.
The main disadvantage of small loans is that they provide only smaller loan amounts. As the loans are returned or paid off sooner, they usually involve small amounts, so the borrower won’t be burdened with large monthly payments.
Experience with KwikPay Credit.
Trafalgar Associates Limited, the owners of KwikPay Credit, is among the recognized loan companies by the Federal Government of Nigeria, as published by FCCPC of the list of approved digital lenders to operate in Nigeria. This regulation by the Federal Competition and Consumer Protection Commission (FCCPC) seeks to protect borrowers from the illegal operations of unregistered and unlicensed digital loan companies, including loan apps in Nigeria. It helps change the perception of the public on short-term loan providers in Nigeria.
The government’s regulation is designed to put greater pressure on digital lenders providing short-term loans to lend responsibly. Licensed operators like KwikPay Credit, one of the best loan Apps in Nigeria, offer short-term loans to individuals and various SME businesses, Personal Loans, Business Loans, and Diaspora Loans for Non-Resident Nigerians, and operate ethically within the confines of the law and by the professional code of conduct, of the Money Lenders Association.
Choose how much you want to borrow and how long, fill out our quick and simple application form on the web: www.kwikpaycredit.com or through our Mobile App, and we will do the rest.
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