Loans For Unemployed People In Nigeria
Unemployment is a major issue in Nigeria, with the unemployment rate estimated to be over 30% in recent years. This high unemployment rate means that many Nigerians are struggling financially and looking for ways to make ends meet between jobs. One option that the unemployed in Nigeria often consider is taking out a personal loan. However, it can be difficult for those without a regular income to qualify for traditional loans from banks or other mainstream lenders.
In this blog post, we will discuss the options available for loans for unemployed people in Nigeria. We will also provide tips for unemployed borrowers on improving their chances of loan approval and avoiding predatory lending terms. Let’s get started!
Who Are The Unemployed?
The unemployed typically refer to individuals who are jobless, available for work, and actively seeking employment but unable to find a job. Some key things to know about the unemployed:
• Includes individuals who have been laid off or fired, as well as those who voluntarily left their last job.
• Both white-collar and blue-collar workers across many industries and skill levels can be unemployed.
• Those considered unemployed by economists must be available to take a job if offered one. People who have quit working entirely are not counted as unemployed.
• The unemployment rate is the percentage of the total labor force that is unemployed but seeking employment. It excludes groups like students, retirees, disabled individuals, and those not actively job hunting.
Loans For Unemployed People In Nigeria
There are several different types of loans available for unemployed people in Nigeria. Some of the most common options include:
• Government Loans
• Non-governmental organization (NGO) loans
• Peer-to-peer lending
• Loan Apps
Government Loans
Government loans are financial assistance provided by the government to individuals and businesses. They can be used for a variety of purposes, such as education, housing, business, and disaster relief. Government loans are typically offered with lower interest rates and more flexible repayment terms than traditional loans.
Types of government loans
There are several different types of government loans available, including:
• Education loans: Government education loans can help students pay for college, graduate school, and vocational training.
• Housing loans: Government housing loans can help people buy or refinance a home.
• Business loans: Government business loans can help small businesses start up, expand, or create jobs.
• Disaster relief loans: Government disaster relief loans can help individuals and businesses recover from natural disasters.
How to apply for a government loan
To apply for a government loan, you can visit the website of the government agency that offers the loan program you are interested in. You will typically need to submit an application form and provide documentation to support your eligibility.
Benefits of government loans
Government loans offer several benefits, including:
• Lower interest rates
• More flexible repayment terms
• Easier to qualify for than traditional loans
Non-governmental organization (NGO) loans
Non-governmental organization (NGO) loans are financial assistance provided by non-governmental organizations (NGOs) to individuals and businesses. NGOs are private, non-profit organizations that work to improve the lives of people and communities around the world. NGO loans can be used for a variety of purposes, such as education, housing, business, and disaster relief. NGO loans are often more accessible than government loans, but they may have higher interest rates and shorter repayment terms.
Types of NGO loans
There are several different types of NGO loans available, including:
• Microfinance loans: Microfinance loans are small loans that are typically made to individuals and small businesses in developing countries.
• Community development loans: Community development loans are made to organizations that are working to improve the lives of people in their communities.
• Disaster relief loans: Disaster relief loans are made to individuals and businesses that have been affected by natural disasters.
• Educational loans: Educational loans can help students pay for college, graduate school, and vocational training.
• Business loans: Business loans can help small businesses start up, expand, or create jobs.
Benefits of NGO loans
NGO loans offer several benefits, including:
• More accessible than government loans
• Lower interest rates than traditional loans
• more flexible repayment terms than traditional loans
• May not require collateral
Peer-to-peer lending
Peer-to-peer lending (P2P lending) is a type of lending where individuals lend money to other individuals directly, without the need for a bank or other financial institution. P2P lending platforms act as intermediaries, providing a platform for lenders and borrowers to connect and transact.
P2P lending has grown rapidly in recent years, particularly in Nigeria. This is due to several factors, including:
• The high demand for credit in Nigeria.
• The relatively low penetration of traditional financial services in Nigeria.
• The rise of mobile technology, has made it easier for people to access and use P2P lending platforms.
Benefits of Peer-to-peer Lending
There are several benefits to using P2P lending in Nigeria. For borrowers, P2P lending can offer:
• Access to credit even if they have a poor credit history or no credit history at all.
• Lower interest rates than traditional loans.
• More flexible repayment terms than traditional loans.
For lenders, P2P lending can offer:
• The opportunity to earn higher returns on their investments than they would earn from traditional savings accounts or investments.
• The ability to diversify their investment portfolios.
• The ability to lend money to individuals and businesses in Nigeria that they may not be able to lend to through traditional financial institutions.
Loan Apps That Give Loans To Unemployed People In Nigeria
In Nigeria, there are several loan apps available for unemployed individuals. It’s crucial to understand that the eligibility criteria for these apps can differ, making it important to note that not all unemployed individuals may meet the requirements. Below, I’ve listed some loan apps that cater to the unemployed in Nigeria.
Branch
Branch is a popular loan app that offers loans to unemployed people in Nigeria. Branch uses your smartphone data to determine your eligibility and loan amount. You can get a loan of up to N200,000 with a repayment period of 4 to 40 weeks.
Carbon
Carbon is another popular loan app that offers loans to unemployed people in Nigeria. Carbon offers loans of up to N1 million with a repayment period of 1 to 6 months. To be eligible for a loan from Carbon, you must be a Nigerian resident and have a valid BVN.
FairMoney
FairMoney is a loan app that offers loans to unemployed people in Nigeria. FairMoney uses your smartphone data to determine your eligibility and loan amount. You can get a loan of up to N150,000 with a repayment period of 2 to 6 months.
Aella Credit
Aella Credit is a loan app that offers loans to unemployed people in Nigeria. Aella Credit uses your smartphone data and credit history to determine your eligibility and loan amount. You can get a loan of up to N1 million with a repayment period of 1 to 3 months.
Umba
Umba is a loan app that offers loans to unemployed people in Nigeria. Umba uses your smartphone data and credit history to determine your eligibility and loan amount. You can get a loan of up to N500,000 with a repayment period of 3 to 6 months.
It is important to note that these loan apps may have different eligibility criteria and interest rates. It is important to compare the different loan apps before choosing one.
Here are some tips for getting approved for a loan from a loan app:
• Have a good credit history.
• Have a steady income stream.
• Have a valid BVN.
• Provide accurate information on your loan application.
• Be prepared to provide collateral, if required.
Please note that it is important to borrow responsibly and only borrow what you can afford to repay.
Frequently Asked Questions
Can I get a bank loan if I don’t have a job?
It is very difficult to get approved for a traditional bank loan while unemployed. You may need to provide significant collateral or a creditworthy cosigner.
How much can I borrow through a personal loan while unemployed?
Loan amounts will vary by lender but are often capped based on your income history or ability to repay. Somewhere between ₦50,000 to ₦500,000 is common.
What interest rates do unemployed borrowers pay on loans?
Interest rates can be quite high – from 13% to as much as 50% APR depending on factors like your credit profile, collateral, and the lender policies.
How can I increase my chances of loan approval when unemployed?
Having proof of regular income deposits, strong credit, low debt, and collateral will improve your loan approval odds. Applying with a creditworthy cosigner also helps.
Are there risks to taking out loans when unemployed?
Yes, the main risks are taking on debt you can’t repay and damaging your credit if you default. Avoid payday loans and only borrow what you can pay back.
What happens if I can’t repay my unemployment loan?
You should communicate quickly with your lender if struggling to make payments. Defaulting leads to extra fees, damage to your credit, and potential legal action. Try negotiating alternate repayment plans.
Conclusion
There are several loan options available for unemployed people in Nigeria. These options include government loans, NGO loans, and peer-to-peer lending. Each type of loan has its unique advantages and disadvantages, so it is important to do your research and compare different lenders before choosing a loan.
