HOW TO ACCESS LOANS IN NIGERIA Part 2
Purpose and terms of the loan
Moneylenders will commonly ask what is the purpose of the loan. Guarantor loans are commonly used for lifestyle purposes including buying new cars, paying for weddings, school fees or holiday. Other short term loans are used for more emergency purposes such as car repairs, urgent business expenses and medical bills.
It is necessary to understand the purpose of the loan because high cost interest is not used for wanton spending such as shopping for brand name consumer items – it should go towards a real purpose.
The terms of the loan are also very important, just to confirm things like:
- loan amount
- loan duration
- interest rates and fees charged
Whilst the customer has access to a formal loan agreement, it is always good to revise this information and check this over the phone.
A key point when it comes to guarantor loan is that you have the extra person involved in the loan, the guarantor. The lender will always make a point of speaking to the guarantor as well. This individual (usually a close friend or family member) needs to understand their responsibilities.
Your guarantor who could be a family member will not be approached immediately to repay if you miss a single repayment. The moneylender will always contact the borrower on several times and offer alternative payment plans before asking the guarantor to pay the bill.
If the loan is successfully funded within 2 days of applying, the money is sent to the guarantor’s account first. This is because the lender wants peace of mind knowing that the huge loan, potentially in the millions of Naira, is going to a person with a good credit store.
You should always make sure you do everything possible to use the loans in the right way when you are fortunate to get it. There is always the temptation to divert the money into things that will later throw you into debt traps. Beware!
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