Like every other thing in Nigeria else that creates a lot of attention, education isn’t cheap.
Due to this fact, there are now several venues where one can apply for student loans in Nigeria to assist in sponsoring education.
This article covers everything you need to know about student loans in Nigeria.
What is Student Loan
A student loan is mainly intended to help students in paying up their educational bills and other associated costs. This loan is quite distinct from other loan types in Nigeria in that the interest rate is much lower, and the loan servicing schedule is more flexible.
Student loans in Nigeria are intended to assist students with the costs of postsecondary education, including tuition, books and supplies, and living expenses. In Nigeria, the importance of education for the country’s development has been a topic of discussion for many years.
Between 1973 and 1991, the Nigerian Students Loans Board issued loans totalling $46 million to help Nigerian students pay for undergraduate and postgraduate studies in Nigeria and abroad.
However, there have been significant issues, and the rate of loan payback recovery has been dismal.
Although there have been failures and challenges with education funding in Nigeria, there are several lenders who give funding to students. Before we go into further details, let’s walk through different types of student loans.
What Are the Types of Student Loans Available?
In Nigeria, there are two major types of student loans:
- Loans from the Nigerian Federal Government
Well, these loans are for those who are pursuing tertiary education. The National Youth Service Corps (NYSC) Loan Scheme applies to them.
- Loans from the Loans Board
These types of loans are available to students at the tertiary level. They are covered by the Banks Loan Scheme’s Postgraduate School Education (PSE).
Both plans allow you to borrow money based on your needs and academic performance if you meet the requirements. But first, let’s look at what qualifies you to qualify for a loan in Nigeria and the Nigerian government regulations that govern them.
Do Banks Offer Student Loans?
Yes! Nigerian banks do offer student loans, here is a list of some Nigerian banks that offer student loans, the features of these loans, and the requirements:
Student Loan from GT Bank
The GT Bank tuition fees advance is a certified loan well designed to assist parents in paying for their child’s or ward’s school fees. You should also know that the Gtbank Student Loan applies to only schools in Nigeria.
What Are the Features of the Gtbank Student Loan?
- Per request, as a student, you can secure up to N 4 million all in loans, alongside a maximum term of five months.
- Competitive interest rates
- Access to immediate financing
What Are the Requirements of the Gtbank Student Loan?
- Employer application form and undertaking form
- Bill for credit insurance and school tuition
- Finally, ensure that terminal employees’ benefits are held adequately by GTBank or you could get Corporate Guarantee.
Access Bank’s Student Loan
Student loans granted by Access Bank are more like a school fees advance created to provide students with a very short-term type of finance to totally cover all tuition costs.
What Are the Features of the Access Bank Student Loan?
- Make sure absolutely nothing is capable of getting in the way of the student’s process of learning.
- You will be able to secure up to N4 million if you’re lucky.
- Students are allowed to properly refinance debts in some cases
- Remittance services are readily available.
What Are the Requirements for Securing this Loan?
- A well-filled-out student loan application form
- Letter of admission acceptance from the school
- Advice on appropriate tutoring
- A letter of full domiciliation of the student’s wage account or the salary account of your parents/sponsors.
- Copy of the student’s parent’s/employment sponsor’s ID or other valid form of identification
- BVN (British Virgin Islands) (See how to check BVN)
- Checking your credit
FirstEdu Loan from First Bank
The first loan designed by First Bank is majorly aimed at business owners. FirstEdu grants funds for effectively improving infrastructure and actively filling gaps until student tuition fees are well received.
What Are the Features and Requirements of the First Bank Firstedu Loan?
- It comprises a 3 months payback schedule that is adjustable.
- A maximum of ten million dollars is available.
- The only major need for loan collateral is simply the full domiciliation of student fee payments with the First Bank of Nigeria.
- The Student’s school must have registered a functioning account with this Bank for at least seven months, or 11-12 months with other financial institutions.
- The targets for these loans are schools that are privately owned, schools that are CAC regulated and also closely monitored by their governments.
- Schools seeking student loans must have at least 150 students.
Education Loan from the Federal Government
To provide Nigerian students with free access to huge finances, the Federal Government approved the creation of loan boards for student and education banks. They made sure these bodies are controlled effectively by the states, and students secure them at reduced interest rates.
All states in Nigeria were given full permission to create education funds. The full support of secondary education and teacher development, alongside the formation of special intervention funds for students with needs. These were all priorities.
How Do Students Get to Repay Their Loans?
Many student loan companies provide three main options for repaying your student loans:
1. To begin, you can defer payments until after you have graduated. This means you won’t have to pay anything on your student loan until after the six-month grace period has expired.
If you choose to defer all kinds of payments, your outstanding debt will continue to collect interest while you are enrolled in School, but you will not be forced to make any payments.
Because interest accumulates over time, this is the most expensive approach to repay your loans in the long run.
2. You are making interest payments while in School is the second method for repaying your student loans.
These payments can be as little as a thousand dollars, or they can cover the interest on the loan. After you graduate and have completed the six-month grace period, you will begin making full interest and principal payments.
This kind of repayment can help you save a significant amount of money over the life of your loan.
3. The third most typical way to repay your student loans is to make full payments on both the interest and the principal while you are still enrolled in School.
This is a difficult option for most students; after all, you have student loans to assist you in paying for your education. However, if you can pay off your loan in full while you’re still in School, you’ll save a lot of money throughout the course of your loan’s term.
What Makes You Eligible for A Student Loan?
In order to be qualified for a Loan in Nigeria, you’ll have to meet these criteria:
- The individual must be at least 18 years old
- You are expected to meet your School’s requirements
Refer to your school for information on your credentials and academic prerequisites. They may decline your application in cases where you exaggerate them.
If they do, you stand to lose nothing but money and time due to the fact that the money is only available to those who meet the criteria.
- You must adhere to the Nigerian government’s regulations
The minimum term of study for a Government student loan is about two years and in some cases can go up to six years, this is dependent on your course.
The minimum term of study for a Loans Board student type of loan is about a year and can go up to four years, depending on your subject.
- If you’re applying for a Nigerian Government loan, you must be at least 35 years old, and if you’re applying for a Loans Board kind of loan, you must be at least 40 years old.
- You must be a graduate of high school to qualify for a Federal Government loan. If you hold a Junior School Certificate (PSJC) or an OND with good Credit, you may be eligible for the PSE/ Staff of the Banks Loan Scheme.
- As a student, you are expected to be fully employed with a monthly pay of N 5,000 and have the appropriate abilities to chase your study to qualify for a Loans Board loan. It is also permissible if you are unemployed but are a great entrepreneur with capital and a small firm.
- A valid financial bank account is required for both programs. Those without a financial bank account can quickly open one on the Internet. Several banks offer complete services to meet all of your security concerns and banking requirements.
- You are expected to submit your application for the loan under the timeframe stated in the rules. You may lose out on a Federal loan if you miss a deadline because the Nigerian government is quite severe about deadlines.
In Nigeria, What Are the Different Ways to Obtain a Student Loan?
Although universities and schools are still free, obtaining student loans to sort out educational bills might be difficult.
Fortunately, here are 7 effective strategies to secure student loans that will ensure that you receive adequate funds for your post-secondary education:
Apply for a scholarship from one of the banks listed on the NAB, NBS, CBN, or PIB websites.
Banks having branches in Nigeria tend to be frequently enthusiastic about the concept of earning a scholarship just before taking out a loan.
Although this is not seen as a good option for every student, it is something to think about if you come from a low-class, rural home with little financial resources. Make the best use of this opportunity by taking the time to apply for small-scale scholarships online.
Request a loan from a private lender
The Nigerian market has a large number of private lenders. Many of them also have particular loan assistance programmes for pupils.
So, before going to the Federal government for a loan, EdustuN recommends that you look into private organizations first. Remember that private organisations may offer you a better loan interest rate than government institutions.
Online applications are accepted
Nigeria, unlike the majority of countries, absolutely prohibits any type of application online to obtain a student loan.
Nigeria happens to be one of the countries that require a visit to other countries’ embassies or consulates in order to obtain a loan, even though many other countries are moving toward an online application method.
As a result, Nigerians must travel to Canada or Brazil to run an application for student loans via their respective colleges.
Borrow money from family and friends
You can borrow money from friends or relatives to get your business off the ground, whether you sell and make shoes, bake cakes, paint fancy watercolours, or run restaurant menial jobs.
Before applying for a loan, be realistic when it comes to the amount of money and time it will cost to establish your small business.
If borrowing money from friends, or relatives still makes you uncomfortable, consider nicely taking out a student loan from an internet lender.
Obtain a loan from a local bank or a microlender
Contrary to common assumptions, student-oriented loans are not solely available to international students. It is surprising to learn that some microlenders and local banks in Nigeria offer loans to Nigerian students.
However, it is critical to conduct extensive research before asking for local loans, as rates of interest may be greater than those offered by foreign lenders.
Fill out an application for microfinance
Microfinance offers loans to individuals who have not taken out a student loan before. They provide interest rates ranging from 9 per cent to 25 per cent. These are modest loans that will take longer to repay.
Make an application for overseas loans
Most international loans are thought to be trustworthy and reputable. Commercial banks and Foreign governments are the two main sources of these funds.
Private banks operate as intermediaries between the creditor and the borrower; obtaining an international loan is more difficult than it appears since you must first locate a private bank interested in your narrative.
Foreign governments also grant international loans, however, they are normally on limited terms, and because of this fact they may not be eligible.
Conclusion
In Nigeria, loans for students are difficult to come by, which can be stressful for students who wish to continue their education or establish a business but can’t borrow money without a solid guarantee of repayments, like previous employment experience or other assets.
Exploring the options enumerated in this article makes it easy for you if you are a student looking to secure a student loan.