Unconventional Ways Of Obtaining Low Interest Loan In Nigeria

Daily, individuals keep seeking ways to access loans without having to give in return, their arms and legs in the process of obtaining credit. In Nigeria, many households and low-income workers avoid bank loans due to the high interest and collateral that comes with them.

Although, in recent years, technology advancement has bridged the gap between soft loan seekers and affordable credits. The utilisation of tech by private creditors, which gave birth to Fintech (financial technology companies) has crashed the high-interest rates often offered by traditional banks.

Today, individuals, households, small and medium businesses can access low-interest loans from the comfort of their homes without multiple paperwork or cringing collateral demands. Fintechs now offer competitive interest loans that forced banks to also reduce their interest.

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But the needs of humans are insatiable, so creditors have several channels towards obtaining low-interest loans. However, due to lack of exposure on the part of banks or Fintechs, only a few are aware of the following methods used to access loans - which seem to be unconventional to many.

Unconventional Ways Of Obtaining Loan In Nigeria

Bank Overdraft: This is one of the best-kept secrets in the financial world. Several bank customers are not familiar with the term, neither do they know the essence of overdraft in their households or business. Overdraft has been the saviour of high net worth individuals or people that know every nook and crannies of the word.

It is a low-interest loan option depending on the individual bank. Having an overdraft account allow bank customers to continue withdrawing even when their account has insufficient funds or is empty. It is good for emergency purposes or short-term financial needs. With an overdraft, you can also pay bills like rent.

Credit Card: This is also unpopular in Nigeria because most people prefer obtaining physical cash or transfer of funds. Credit card is not like your conventional loan-type even though you use the card to borrow loan. It's like your ATM card, however, the money inside is not yours - but you are allowed to spend, so long as you agree to refund it at an agreed period.

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Commercial banks are yet to go into this loan-type, but some Fintechs in Nigeria offer Credit card loans that you can use to purchase goods or pay for services at stores that accept card for payment. A credit card also comes with its own interest rate, and it differs from creditor to another.

Payday Loan: Several banks offer this method of loan, but most bear different names such as salary advance. A payday loan is tied to the salary account of the loan seeker. You have to be a customer of your preferred bank before you can get access.

Most banks demand customers have a salary account operational for three to six months before they accept to pay you the equivalent of your salary in advance whenever you are in need of emergency financial.