No collateral requirements:

Before the advent of unsecured loans (loans without collateral), for middle class and small scale business owners in Nigeria, loans were something that instilled fear in people and people avoided them like the plague that they are.

Because to get a traditional bank loan, collateral must be presented, something with value higher than the loan requested or equivalent to the amount of loan requested. Collateral can range from a luxury car, to a house down to a plot of land, etc. Something tangible or substantial that the bank (the normal go-to for a loan) can use to recover their cash should the customer default in loan repayment.  With the introduction of loans in Nigeria without collateral in the finance market, the opportunity for businesses to grow is exciting to say the least. Now, there is more space for competition, with finance not being a major problem as before and yes, ordinary people without any landed property in their name can now access loans to take care of their financial needs.

Freedom to do what you choose with it:

The best thing about loans in Nigeria without collateral is that while the interest rate is higher, you’re also free to do what you want with the money, regardless of why you took it. Unlike secured loans from banks, unsecured loans do not dictate what the money is spent on. Say for instance you took a loan of N 100 thousand; you can use N 50 thousand to invest in your business, use N 10 thousand to buy new clothes, use the rest to do whatever you want or you can decide to use the entire 100, 000 naira to pay your rent or just splurge it all on your grandfather’s girlfriend’s birthday. That is entirely your business. The only thing these unsecured loan givers expect from you is for you to pay back the loan at the agreed time.


These loans, while not very much (usually ranges from N 0 to N 2,000,000) is groundbreaking for the business owners. The flexibility it affords to businesses is unprecedented. Even salary earners can get one too. In actual fact, everybody can get one, at any time. It’s relatively stress-free when compared to normal loans, and the mode of payment can be automated for certain service providers.

Requirements for loan without collateral in Nigeria:

Unlike regular loans, these loans without collateral in Nigeria requires very little or nothing.

Since there is no security (asset or collateral) being used, there is almost no need to go to their office to apply for a loan as most of these loans can be accessed online.

For Paylater, which is an example of a loan without collateral provider, what is required is basic details about you, like the kind of information you use in SIM card registration e.g. your age, name, address, city, local government, etc. These details are used to register you in the company. Also, you’ll have to provide your Bank Verification Number (BVN) and your bank details. Make sure your bank details and your BVN details are the same, as this can cause your application to be denied.

To apply for these loans, there are some basic requirements you have to fulfil. You have to

  • Be at least 18 years old.
  • Be able to show bank statements or transaction slips, this is to be sure you are regular income earner and thus, you can repay the loan you seek.
  • Be able to also provide a guarantor when necessity demands one.

If you are going through local money lenders like cooperative societies and Esusu or Ajo, all you need to have access to loans at anytime is that for cooperative societies, be a member and attend regular meetings, be active and anytime you need loan, you can get it, provided the requested amount is in the cooperative’s account. For the Esusu/Ajo, this one involves regular contribution of an amount of money daily, weekly or monthly, as agreed by the members. A bulk sum is given to the members at a rotational basis and the sweetest part of cooperative societies and Esusu loans is that as long as you are a member and if the purpose of the loan is burial, naming ceremony or wedding, be sure your members are going to turn up in all their glory and of course, you do not have to worry so much about food, drinks and souvenirs as they will contribute their quota towards making your event a lituation!

Approval time and interest rates of loans without collateral in Nigeria:

In most cases, service providers will tell you loan takes at most 24 hours, but after applying, the approval time ranges from as little as 20 minutes to 3 hours at most. This is one of the reasons why it is most interesting especially for business owners in need of some extra cash in a hurry. They could easily use this loan without collateral and do their business, and pay back at their own time. No more hitches in business plans because of insufficient funds. The flexibility and assurance it gives people to be able to get things they want or invest in a business opportunity in a hurry are phenomenal and extremely promising.

Interest rates are relatively higher when compared to normal loans. This is because of the added risk of not taking the collateral. There are some companies that offer rates close to or on par with most banks that give normal loans (with collateral). But while the rates are higher, it’s not back-breaking, and it’s still reasonable enough to make loans without collateral in Nigeria a very interesting option for the businessman, working class, and even the poor people in Nigeria today. Loans from cooperative societies and group contribution loans (ajo/esusu) come at zero interest rates as long as you are a member of the group and the approval time is immediately you request for it, as long as the amount you need is very much present in the group account.

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