Top 8 Loan Companies in Nigeria

Over the years acquiring loans have evolved from the orthodox method of getting loans from family and friends, using collaterals such as lands and even marriage promises, to traditional banks. Now there is an explosion of different loan companies offering the options of online and walk in application methods. These loan companies surely have caused relieve to the average Nigerian by making the process hassle-free to eliminating the long wait for approval and disbursements.

With the current inflation in the country, it is no surprise that many Nigerians are more inclined to seek these loan companies to provide some sort of financial relieve. Although these loan companies have been of benefits to its users, there have been some challenges surrounding their modes of operation, especially when it concerns debt recovery.

Despite the complains of harassments, defamations and double charges of already paid loans, there are still some legit loan companies abiding to the ethical standards put in place by the FCCPC (Federal Competition and Consumer Protection Commission).

In this post, to ensure you have access to the best lending services, we will be discussing the top 8 loan companies in Nigeria based on their interest rate, loan types, customer reviews and accessibility.

What is a Loan?

A loan is a certain amount of money, property or other valuable material goods given to another person or party in exchange for future repayment of the value amount with interest. A loan can also be said to be an amount borrowed to an individual from a financial institution with the agreement to pay back the
principal amount in instalment with interest until the debt is cleared.

Loans help businesses and individuals meet up with their financial obligations, each party involved must agree on the terms of the loan before any disbursement. These terms may include the interest rate, repayment plan, collaterals such as landed property, inventory or even farm produce to serve as
guarantee of repayment and penalties for default among many others.

Different Types of Loans

According to the Central bank of Nigeria there are two major types of loans, the secured and unsecured loan. Other loan types fall under these two categories and are differentiated by several factors which also determine the terms and conditions of the loans.

1. Secured loan

A secured loan is a loan that require the borrower to put up an asset (e.g. property, moveable assets, etc.) as collateral for the loan. These types of loan require an asset that is worth more than the amount requested by the borrower. In the case where the borrower is unable to pay back the loan according to the agreed terms and condition the asset can be claimed by the lender.

With secured loan, you can usually borrow a large amount at lower interest rates for a long time period (perhaps between 10 or 15years). It is very important to do a proper research and think carefully before collecting a secured loan because it is riskier than an unsecured loan and the borrower can end up losing the asset or collateral if the debt is not paid. Some examples of secured loans include:

➢ Mortgage loans: In Nigeria mortgage loans are usually granted by banks and other financial institution to individuals for the purchase of real estate(properties). The ownership of the property remains that of the lender until the stipulated amount is paid after which ownership will be transferred to
the borrower. This is a loan designed to help individuals achieve their dreams of becoming home owners.

The mortgage loan is made up of three components which includes principal (the amount of money you are borrowing to purchase the house), interest (the annual rate you pay to borrow the money), and collateral (the asset or assets used to secure the loan). In a case where the borrower is unable to make payments, the lender is legally allowed to repossess the property to cover their expenses.

➢ Term loans: This is a secured loan granted by banks and financial institutions for a specific amount and repayment term, typically having fixed or fluctuating interest rate. Most loans from banks are term loans and are usually collected by businesses to make investments like expanding to a new location or purchasing additional inventory.

2. Unsecured loan

These are loans that doesn’t require the borrower to put down any asset as collateral for the loan. This loan usually has a higher interest rate than that of a secured loan because the lender is open to more risk having no collateral to hold on to. With unsecured loan financial institutions meticulously look through the financial records of the borrower to ascertain if they have the capacity to pay back the loan. Although there is no collateral to be repossessed by the lender, one can be sued to court if the conditions of the
loan are breached. Some examples of unsecured loans include;

➢ Credit Card Loan: This loan comes in form of an electronic card usually issued by banks to its holder. The card allows the holder to purchase whatever they want, but has a limit which is agreed upon by both parties. However, regular checks and reconciliation are carried out at interval to balance the account
and claim interest.

➢ Personal Loan: As the name implies personal loans also known as consumer loan are loans given to individuals for their personal use. These loans are approved based on the individual’s credit history and ability to repay the loan.

Loans can also be categorized according to the modes of payments and they include;
◆ Single payment loans
◆ Salary advance loans
◆ Monthly payment loans

Factors to consider when choosing a loan company

It doesn’t matter if it is your first or fifth time accessing a loan, choosing a reputable lender is an important first step to the process. To help make a good choice, below are the factors to consider;

1. Company’s Credibility: This is arguably the most important factor to consider when choosing a loan company, especially when seeking a business loan. Whether you are entering a short or long-term relationship with the lender, it is important to choose a company with an impeccable reputation. Take time to research if the company has been registered, how long they have been in business, do they have an office address, examine their track record by reading client reviews and how transparent they are in the terms and conditions of their loans. All these will help you make an informed decision.

2. Loan Eligibility and Requirements: All loan companies have individual requirements that makes one eligible for a loan. In today’s digital age checking for loan eligibility is as simple as one quick online search, as a lot of banks and financial institutions have websites of their own containing details of their loan requirements and eligibility. This will help you know the type of loan you can access and what will be required during the application process.

3. Interest Rate and Charges: This is another important factor to consider when choosing a loan company, assessing the interest rate of the loan company is critical for you to evaluate your sustainability in order to avoid defaulting on the loan terms. Choosing a loan company because of its low interest rate before considering if it is a fixed or floating rate is quite risky and can affect your repayment plan. It is also imperative to check for hidden charges and get clarification in cases of uncertainty.

4. Repayment Terms and Options: The real work isn’t getting the loan but paying back the loan, this is why you must know their repayment structure before choosing the lender. You must ask yourself if your financial capacity aligns with their repayment terms or at least has some flexibility. If they do not, opt for a loan company with a flexible repayment option that suites you without hurting your financial well-being in the long run.

5. Data Privacy: It has become common practice for some loan companies to call and send embarrassing messages to the family and friends of their clients in cases of defaults; in order to avoid this, you must do your due diligence in understanding the confidentiality of the company. The privacy of the data you provide should be of top priority to the loan company you chose.

6. Customer Service and Support: There is no great relationship without a good and rapid communication system and it is no different when it comes to your relationship with a loan company. In cases where you have questions and need clarification, a quick response will help make the process a smooth ride. Hence it is important you choose a loan company with different customer service channels and a quick response time.

Top 8 Loan Companies in Nigeria

Nigeria’s lending landscape has grown over the years to include various types of financial institutions and lenders catering to different needs. We have based these top loan companies in Nigeria according to their financial institutions.

Microfinance Bank

This is a financial institution that provides financial services to unemployed, low income individuals or groups who lack access to conventional banking services. They act as financial helpers for small and medium sized enterprises (SMEs) providing various types of loans for farming, growing a small business and even education.

Although there are 916 licensed microfinance banks in Nigeria according to the CBN, two of these banks have set the pace and distinguish themselves with their efficient service delivery and customer satisfaction. Both banks are stated below;

1. LAPO Microfinance Bank:

This is arguably one of Nigerians most notable Microfinance Bank since it was established in the 1980s for the purpose of helping less-privileged Nigerians cope with the harsh economic realities. Lapo is
a licensed microfinance bank operating in 34 states, providing a range of financial solutions to assist micro, small and medium enterprises.

They offer regular loans (with a range of 30,000 to 50,000 naira), SME loans (with facility up to 5,000,000 naira), agricultural loans (with facility range of 50,000 to 500,000), education loans (with a range of 20,000 to 200,000) and special loans (with facility range of 50,000 to 250,000). It is important to note that although Lapo microfinance offers an unsecured loan, they require you provide two guarantors to access most of their loans.

2. KUDA Microfinance Bank:

Since its launch in 2016, starting out as an online saving and digital lending platform, it has taken the financial industry by storm. Gaining popularity among Nigerians and raising over 90million, Kuda has successfully positioned itself as one of the leading loan companies in Nigeria. Through its customer friendly app-based banking service, Kuda offers quick unsecured personal and business loans to its users.

Kuda microfinance bank provides diverse loans options for agriculture and small business growth, the interest rate varies and are stated on their loans offer letter which you would have to accept before accessing the loan.

Commercial Banks

These are financial institutions that carry out operations related to deposit and withdrawal of money for the general public, providing loans and other services. There are different commercial banks in Nigeria, these banks are licensed to operate by the CBN and it serves as the regulator that carries out major
oversight of all banking activities across the country.

With the many options of commercial banks, it would interest you to know that two banks have proven to be the forerunners of lending services, standing out as efficient and reliable. We will list them below;

3. Titan trust bank:

It is one of the leading licensed private commercial banks established in 2018 to identify the gaps in the banking sector and address the unmet needs of the retail mass market, SMEs and corporate institutions. They offer Salary advance loan, personal loan and quick loans among others.

Titan trust bank offer a lending rate of 18.00% that is subject to change depending on the loan term. One of the cons of seeking a loan from this financial company is you must open a bank account from them.

4. Sun Trust bank:

This is another privately owned commercial bank established in 2015 that strives to meet the financial service needs of the communities it serves in a friendly and professional manner. Sun trust bank allows for fixed monthly payment, no origination fees, no annual fees and competitive interest rates with a tenor of up to 48 months. Whether you are looking for cash to spice your personal space, need to clear a previous debt or need credit for your business sun trust bank is definitely a bank to consider.

Fintech Lenders

With the rise in technology, fintech lenders which can also be referred to as online lenders uses digital technology tools to facilitate the process of seeking out, applying for, distributing and repaying loans. The goal of these platforms is to provide convenient and quick financial services to its users. In 2013, there were over 200 fintech start-ups in Nigeria as reported by Statistic Research Department, despite it being a challenging year for fintech companies.

However, with so many options to choose from one may become confused. This is why we have decided to make the process easier by picking out the top two fintech lenders that continue to provide outstanding services.

5. Branch:

This is one of the most innovative online loan companies in Nigeria since it began its operations in 2015. With more than 2million customers and 11 million loans processed around the globe, branch is known for its easy to navigate online platform, prompt responses and customer service. The branch loan app has the highest number of reviews with a rating of 4.5 out of 5 in the Google Play Store, with over 10 million downloads.

They offer a loan range of 2,000 to 1,000,000 depending on the repayment history of the user, with an
interest rate of 21% to 36%. They also offer a repayment term period of 4 to 52weeks. The pros of branch loans include transparency, flexible repayment terms and no collateral required. On the other hand, the cons include higher interest rate compared to traditional banks, loan amount limits for new customers and they only offer personal loans.

6. FairMoney:

This is one of the most downloaded fintech app in Nigeria, with over 10,000 daily loan disbursements. The fairmoney loan app is one that promises quick loans and has kept to that promise, with evidence of glowing reviews on Google play store and a rating of 4.4 out of 5. Fairmoney offers personal loans, business loans and education loans.

Their loan amount ranges between 1,500 to 3,000,000 at a monthly interest rate that ranges from 2.5% to
30% for a repayment period from 61days to 18months. Some benefits of choosing the fairmoney loan app includes seamless application process, quick loan disbursement, no collateral required and flexible loan terms. However, there are some notable cons which includes higher interest rates for first time borrowers and lower loan amount and some customers complain of excessive calls.

Peer-to- Peer Lending

This is an online lending platform popularly known as crowd funding that acts as a bridge between those who want to invest money and businesses in need of a loan. We can call them a loan matchmaking system that links individual looking to invest their cash to small businesses in search of loans. The idea behind this online lending platform is to bypass traditional banks and get both the borrower and lender a better rate than they would through commercial banks. The following are the top two peer to peer lending platform we found;

7. FINT:

This is a tech platform that connects individual and corporate lenders looking for business to invest in. FINT has investors who provide loans in the agricultural sector, automobile, employees borrowing for personal needs, mobile agents (POS providers) seeking capital for their business among others.

With FINT, investors have an estimated return between one to three years depending on the investment, with a monthly repayment plan and borrowers can access loans up to 1,000,000 naira. You can either sign up as a corporate borrower, lender aggregators, HNIs or corporate lenders. They offer a diverse range of loan products, competitive interest rate and flexible repayment terms although some of their loans require collateral.

8. Kiakia:

This is an innovative P2P lending platform that offers secured and unsecured loans to mostly small and medium enterprises since its launch in 2016. It ensures that credible individuals and businesses are not denied loans due to their lack of credit history. It has an app-based platform that enables individuals lend to MSMEs (micro, small and medium enterprises).

Investors have three tenure models to participate in, 6 months, 12 months and 36 months. In 2019, Kiakia clinched the InFINCA award for best peer to peer platform in Nigeria.


Loans can be tricky and one can get trapped in a cycle of repayments and debt, before applying for a loan it is important to carefully weigh your financial capacity, as this will help you choose the best loan company with a repayment term that suits your specific need. With the information provided in this article I am sure you are on the right track to make an informed financial decision.

We recommend that you do your due diligence, assessing the terms and conditions of each company and seek personalized advice when necessary. Remember choosing the right loan company is the first step to having an ally to help your financial journey in order to maintain a healthy financial lifestyle.

Leave a Comment