Types of Student Loans in Nigeria

Introduction

While some students may be financially capable, others will need support. Some institutions provide scholarships to alleviate this load, but not all students are eligible, and student loans are another option for paying one’s education.

What Exactly Is A Student Loan?

A student loan is a type of financial investment used to help students with school-related expenses. Tuition, books, living expenses, and school supplies are among these requirements.

Types Of Student Loan In Nigeria

Student loans typically have a low interest rate, and there are two sorts of rates accessible. Variable and fixed interest rates. Variable interest rates are often cheaper than fixed rates; nevertheless, they might fluctuate due to market rates. As a result, if interest rates rise, variable interest rates rise as well, and vice versa. Unless you combine, fixed interest rates remain consistent over the life of the loan. Lower fixed interest rates are typically higher than variable interest rates since you are exchanging flexibility for stability. Knowing which rates to select can be a bit of a gamble.

What to Do When Trying to Get a Student Loan

You should plan ahead of time when applying for a student loan. Make a note of the number of years required for the course you’re taking and factor it in. You should put forth a lot of effort to finish school on time. This entails doing all possible to avoid an extra year. We are well aware of the repercussions of an additional year. Extra tuition charges. Consider strategies to keep your expenses low so that you may get the most out of your loan. You may, for example, share a room with someone or preserve your books in good shape to resell at the conclusion of the semester. When you initially start working, estimate your first annual pay. More essential, try not to borrow more than you can afford. This allows you to repay more quickly and at your leisure. All you actually need to do is keep track of your costs.

Who Is Eligible To Apply For A Student Loan In Nigeria?

Once the scheme is implemented, students attending government-owned tertiary institutions would be eligible for the loan, according to the Act.

“Subject to the provisions of any other enactment, all students seeking higher education in any public institution of higher learning in Nigeria shall have an equal right to access the loans under this Act without any discrimination arising from gender, religion, tribe, position or disability of any kind,” Section 2 states.

Section 23 of the Act defines “institutions of higher learning” as government-established public universities, polytechnics, colleges of education, and vocational schools.

To be eligible for the loan, an applicant’s or family’s annual income must be less than N500,000. Furthermore, students must furnish at least two guarantors who meet the following requirements:

• A civil servant of at least level 12.
• A lawyer with at least 10 years post-call experience.
• A judicial officer.
• A justice of peace.

Final Thoughts

To summarize, while taking out student loans, make sure you understand the loan terms and gather as much information as possible before making a decision.