Student Loan Application in Nigeria: How to Apply & Requirements

A Comprehensive Guide to Student Loans in Nigeria

Pursuing higher education in Nigeria can be an expensive endeavor, with tuition fees, living expenses, books, projects, and other costs adding up quickly. With limited student aid packages, many students and families seek out student loans to bridge the funding gap.

This guide will explore the key student loan options in Nigeria – federal government-sponsored loans and private student loans.

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Overview of Student Loan Options in Nigeria

There are two major categories of student loans available to Nigerian students seeking financial assistance for higher education:

Federal Government-Sponsored Loans

These loans are funded by the federal government and administered in collaboration with the Central Bank of Nigeria (CBN), commercial banks, and educational institutions. They include:

• National Student Loans Scheme by CBN and Banks
• National Information Technology Development Agency (NITDA) Student Loans
• Tertiary Education Trust Fund (TETFund) Loans

Private Student Loans

These are offered directly by private lenders and financial institutions. They include:

• Bank and Microfinance Bank Loans
• FinTech Loans
• Peer-to-Peer Lending
• Family Loans

Let’s look at the key features, eligibility criteria, application process and pros and cons for each type of student loan.

Federal Government-Sponsored Student Loans

CBN and Commercial Bank Loans

This is the main federal loan program, established in 2021 by CBN in partnership with commercial banks.

Key Features

• For tuition fees only
• Up to N500,000 per session
• 9% fixed interest rate
• Repayment within 5 years after completion

Eligibility Criteria

• Nigerian citizen
• Gained admission into accredited tertiary institution
• Maximum family income of N500,000 per annum
• Minimum of Lower Credit pass in five subjects including English and Maths for WAEC/NECO
• Two guarantors who are civil servants, lawyers, or judicial officers

Application Process

1. Download application form from CBN website
2. Complete form and attach required documents
3. Submit to Student Affairs office of tertiary institution
4. If approved, loan is disbursed directly to institution

Pros

• Fixed low interest rate
• No collateral required
• Loans are easy to qualify for

Cons

• Only for tuition fees, not living expenses
• Delayed disbursements
• Low maximum loan amount

NITDA Student Loans

Key Features

• For students in IT, computer science, engineering, mathematics
• Up to N300,000 per session
• 5% interest rate
• Repayment timeline maximum 7 years

Eligibility Criteria

• Nigerian citizen in selected fields
• Minimum 5 credits including English, Maths, and relevant subjects
• Enrolled full-time
• Maximum family income N5 million

Application Process

1. Register on NITDA website
2. Complete online application form
3. Upload documents
4. Attend interview if shortlisted
5. Disbursement to successful applicants

Pros

• Competitive interest rate
• Higher loan amounts for IT-related degrees
• Simple application process

Cons

• Only for specific programs
• Very limited number of loans disbursed annually

TETFund Loans

Key Features

• For students facing financial difficulties
• Maximum N200,000 per session
• 8% interest rate
• Repayable immediately after national service

Eligibility Criteria

• Nigerian citizen
• Gained admission into tertiary institution
• Parents must not earn over national minimum wage
• Academic talent and good conduct

Application Process

1. Collect form from tertiary institution’s Bursary Department
2. Submit completed form with documents to institution
3. Approved applications endorsed to TETFund
4. TETFund disburses loan to institution

Pros

• Available to students with dependable family income
• Repayment only after NYSC
• Merit-based selection beyond just need

Cons

• Low maximum loan amount
• Limited number of awards per institution

Private Student Loans in Nigeria

Commercial Bank and Microfinance Loans

Key Features

• Offered by banks like FirstBank, GTBank, Sterling Bank
• Loan amount from N100,000 up to N20 million
• Interest rate 15-25%
• 1-10 years repayment period

Eligibility Criteria

• Collateral often required
• Good credit score
• Parents/guardian as guarantor
• Fixed work contract for salary-backed loans

Application Process

1. Contact bank relationship manager
2. Submit loan application and documents
3. Approval subject to internal scoring criteria
4. Disbursement into student’s account

Pros

• Flexible loan amounts catered
• Faster approval than government loans

Cons

• High-interest rates
• Requirements like collateral and guarantor

FinTech Loans

Key Features

• Offered by platforms like CredPal and SabiLoans
• Short-term loans under 12 months
• Quick disbursement within 48 hours
• Repayment flexibility

Eligibility Criteria

• 18-35 years old
• Active mobile money/bank account
• Verifiable source of income
• At least 1 contactable refere

Application Process

1. Download app and input personal details
2. Upload any required documents
3. Loan decision and amount provided instantly
4. Disbursement once you accept offer

Pros

• Fast, convenient digital process
• Flexible repayment plans
• No collateral needed for small loans

Cons

• Very high-interest rates
• Sizeable origination fees
• Easy to fall into debt cycles

Peer-to-Peer Lending

Key Features

• Loans from individuals facilitated by P2P platforms
• Allows setting your own loan amount and duration
• Investors earn returns through interest
• Rate from 15%-30% based on risk profile

Eligibility Criteria

• Meet platform age, income, higher education criteria
• Undergo credit assessment
• Provide personal details, education costs

Application Process

1. Create account on platform like Lidya, P2P Afrique
2. Fill education loan application
3. Listing reviewed by investors
4. Loan funded directly to you if approved

Pros

• Flexible personalized loan amounts
• Minimal paperwork and quick process

Cons

• Higher interest rates than banks
• Need good credit score for competitive rates

Family Loans

Many students get interest-free or low-interest loans from family members to assist with education costs. This avoids expensive bank interest rates.

Key Features

• Informal borrowing from parents, uncles, aunts, grandparents
• No fixed loan amount or tenure
• Repayment expectations mutually agreed
• Usually no collateral requirements

Pros

• No credit checks or eligibility criteria
• Flexible and understanding terms
• Lower or no interest payments

Cons

• Reliant on family finances
• Can cause friction if disagreements
• Hard to enforce repayment

Comparing Main Student Loan Options in Nigeria

Loan Type	Interest Rate	Maximum Amount	Repayment Timeline	Easy to Qualify?
Federal Govt Loans	5% – 9%	₦200k – ₦500k	5 – 7 years	Yes
Bank Loans	15% – 25%	₦100k – ₦20 million	1 – 10 years	No
FinTech Loans	25% – 35%	₦50k – ₦250k	6 – 12 months	Yes
Peer-to-Peer	15% – 30%	Custom	Custom	Medium
Family Loans	0% – 10%	Custom	Custom	Yes

Tips for Getting a Student Loan in Nigeria

If you decide to take a student loan in Nigeria, here are some tips:

• Compare interest rates and terms across multiple lenders to get the best deal. Banks offer lower rates than fintechs.
• Understand exact fees aside from interest, like processing fees, late repayments fees etc.
• Consider longer 2-5 year repayment periods to have smaller installments.
• See if you qualify for subsidized federal government loans first before expensive private loans.
• If

• If taking a bank loan, explore options to reduce interest rates like putting up collateral or having a guarantor.
• Make sure your course of study is approved by the lender and accredited. This is a common eligibility criteria.
• Calculate your total education costs for the entire program duration, not just one year. Plan costs for accommodation, books, projects, personal expenses too.
• Read and understand the fine print in any loan agreement before signing. Highlight any concerns to the lender beforehand.
• Avoid paying any upfront fees to loan agents or consultants promising to secure you a loan. Apply directly.
• Once approved, strictly use the loan for educational expenses only. Keep records of spending.
• Make interest payments during school itself if possible, rather than accruing interest. This saves costs.
• Pay off the loan as fast as you can once working. Don’t extend tenure unnecessarily.
• Another option is to fund costs sequentially – use loans for junior years and earnings for final year.
• Maintain a good credit history by making timely repayments so you can qualify for future loans if needed.
• Explore loan forgiveness programs – some lenders forgive a percentage of debt if you get good grades.

Doing thorough research and planning carefully will help you make the best financing decision to support your education in Nigeria.