Payday loans have become a popular source of quick cash for people facing financial emergencies or unexpected expenses. Payday loans are simple: borrowers receive a short-term loan to be paid back on their next payday.
In Nigeria, various banks offer payday loans with different requirements and interest rates. While these loans can be helpful in urgent situations, they also come with risks that borrowers should carefully consider before taking out a loan.
In this article, we will provide an overview of payday loans in Nigeria, the banks offering them, requirements for eligibility, and a comparison of their interest rates, repayment terms, and loan amounts. Additionally, we will discuss the pros and cons of payday loans and offer recommendations for borrowers considering these loans from banks.
What is Payday Loan
A payday loan is a short-term unsecured loan with high-interest rates. Borrowers usually write a post-dated check to the lender for the payday salary and receive immediate cash from the lender.
However, “payday” also applies to loans unrelated to a borrower’s payday. The loans are also known as “cash advances,” although the term can also refer to cash provided against a prearranged line of credit, such as a credit card.
The regulations surrounding payday loans differ significantly among countries and states. In Nigeria, several banks offer payday loans with varying requirements and terms.
Benefits of Payday Loans
Payday loans offer several benefits to individuals needing quick cash access.
- First, payday loans have relatively straightforward application processes, which makes them accessible to a wide range of borrowers.
- Payday loans do not require collateral, making them attractive to borrowers who do not own property or other assets.
- Another benefit of payday loans is their speed of disbursement. Typically, payday loans are disbursed within 24 hours of approval, allowing borrowers to access cash quickly in emergencies. This is particularly useful for individuals facing unexpected expenses, such as medical bills or car repairs.
- Payday loans are also useful for borrowers with poor credit histories or low credit scores who may not be eligible for traditional bank loans. Most payday lenders do not require a high credit score and are willing to lend to borrowers with less-than-perfect credit.
- Payday loans can help borrowers avoid late payment fees or overdraft charges, which can be significantly more expensive than the fees associated with payday loans. Payday loans can be a cost-effective way to manage short-term financial difficulties.
Disadvantages of payday loans
While payday loans can be helpful in certain situations, there are also some disadvantages to consider:
- High-interest rates: Payday loans often have very high rates, which can lead to a cycle of debt for borrowers who need more time to pay the loan back.
- Short repayment periods: Payday loans usually have very short repayment periods ranging from 2 weeks to a month. This can make it difficult for borrowers to find the money to repay the loan on time.
- Risk of default: If a borrower cannot repay the loan on time, they may face additional fees and penalties, and the lender may even take legal action to collect the debt.
- Predatory lending practices: Some payday lenders engage in predatory lending practices, such as offering loans to borrowers who are unlikely to be able to repay them or charging excessive fees and interest rates.
- Impact on credit score: If a borrower defaults on a payday loan or is late with a payment, it can negatively impact their credit score and make it harder for them to obtain credit in the future.
Banks Offering Payday Loans: Their Respective USSD Codes, Requirements, Benefits, and Drawbacks
|  Bank |  Loan Code |
| Â Polaris Bank | Â *833# |
| Â Zenith Bank | Â *966# |
| Â Access | Â *901*11# |
| Â Eco Bank | Â *326# |
|  First Bank – First Advance |  *894# |
| Â Wema Bank | Â *945# |
| Â Heritage Bank | Â *322# |
| Â GTCO | Â *737*51*51# |
| Â Fidelity Bank | Â *770# |
| Â Sterling Bank | Â *822# |
| Â FCMB | Â *389# |
| Â Union Bank | Â *826# |
| Â Keystone Bank | Â *533# |
| Â Ecobank Xpress | Â *326# |
Polaris Bank
Features and Benefits
- You can access up to 70% of your monthly net income.
- Competitive pricing.
- It requires no collateral.
- Loan processing time of 24 hours at maximum.
- Easy and quick access to funds for emergency needs.
- Minimal documentation.
Requirements
- Your salary account must be domiciled with Polaris Bank.
- You must be an employee of a reputable organization in the private or public sector.
- You must agree to all terms and conditions on the loan application form.
Contact Details
Email: yescenter@polarisbanklimited.com
Tel: 08069880000, 0706-202-1807
Zenith Bank
Features and Benefits
- You can borrow up to 60% of your monthly salary
- Relatively low-interest rate.
- Good repayment option
Requirements
- The salary and allowances of the customer must be domiciled in Zenith Bank.
- Must be within the age limit of 18 and under 60 years.
- You must earn a minimum of 10,000 Naira per month as a salary and not have any pre-existing loans with the Bank or any other bank.
Contact Details
Email: info@lasacoassurance.com
Tel: 234-1-2787000,
Access Payday loan
Features and Benefits
- 24/7 service, which does not require visits to the Bank, and application is made conveniently
- No documentation is required.
- No collateral is required.
- Up to 36 months tenure.
Requirements
- You must not have any outstanding loan(s) in Access Bank or other banks.
- You must apply using a phone number that is linked to your BVN.
- Proof that you received salary payment in the previous month.
Contact Details
Email: contactcenter@accessbankplc.com
Tel: +234 700 300 0000
Eco Bank
Features and Benefits
- It is a 30-day overdraft loan.
- It has convenient repayment plans
- Employees of an approved company can borrow up to 40% of their net monthly salary with this loan type.
Requirements
- Applicants must have already been banking with Ecobank for up to six months.
- Must have a good Credit Bureau Report — with no unpaid obligations or bad debt
Email: ENGContactcentre@ecobank.com
Tel: 0700 500 0000
First Bank – FirstAdvance
Features and Benefits
- Tenor is 30 days or the next payday
- Maximum single obligor limit of N500,000.00
- The salary account must be domiciled with FirstBank
- Loan amount of up to 50% of net monthly income.
- Interest rate @ 2.5%flat collected upfront.
Requirements
- Must supply all necessary information required by the Bank during the validity of the loan.
- You must maintain a salary account with the Bank during the loan period.
- Receipt of monthly salary.
Contact Details
Email: info@lasacoassurance.com
Tel: 0708-062-5000
Alat by Wema Bank Payday Loan
Features and Benefits
- It is open to both new and existing customers.
- The interest rate of an Alat by Wema Bank payday loan is 2%.
Requirements
- You must have a paying job
- You must have an ALAT account
- You must be using your ALAT account to receive a salary.
Contact Details
Email: purpleconnect@wemabank.com
Tel: 07000787753
Heritage Bank
Features and Benefits
- The tenor for this product is 30 days, subject to the next payday
- 50% of net monthly salary and single obligor limit of N500,000
- Repayment: Monthly rental from salary domiciliation
- Security: Salary domiciliation
Requirements
- Applicant’s salary must be domiciled with Heritage Bank.
Contact Details
Email: complaints@hbng.com
Tel: +234 1 236 9000
GTCO
Features and Benefits
- Customers have access to 50% of their average annual turnover
- Prequalified customers are eligible for the loan.
Requirements
- You must be a GT bank customer in the first place to access this loan.
Contact Details
Email: gtassistant@gtbank.com
Tel: +234 1 2715227
Fidelity Bank
Features and Benefits
- Tenor – up to 30 days
- Charge – 4.5% flat (Upfront)
- Minimum loan amount of N1,000.00
- Up to 50% of net monthly salary subject to a maximum of N500,000.00
- Pre-liquidation is allowed without penalty
- Domiciliation of salary & GSI
Requirements
- Customers must have a credit balance.
- No documentation required
- Salary Account must be in Fidelity bank and be active for at least three (3) months.
- A good credit rating
Contact Details
Email: true.serve@fidelitybank.ng
Tel: 0700 343 35489
Sterling Bank
Features and Benefits
It offers quick and easy loans
The interest rate range is between 20 – 30%
Requirements
- A bank account number(sometimes they accept only sterling accounts)
- Bank Verification Number
- A valid means of identification
- valid email address
Contact Details
Email: specta@sterling.ng
Tel: 017004271
FCMB
Features and Benefits
- 30 days tenors for new customers
- No collateral needed
- No paperwork required
- Instant access to funds
Requirements
- Salary must be up to date
- Have a consistent repayment track record for a minimum of 6 months
- A satisfactory credit report.
Contact Details
Email: customerservice@fcmb.com
Tel: 07003290000
Union Bank
Features and Benefits
- Minimum monthly salary – N15,000
- Maximum loan amount-N100,000
- Loan tenor – 30 days
- Loan limit – 50% of salary
Requirements
Salary domiciliation – 3 months
Contact Details
Email: customerservice@www.unionbankng.com
Tel: +234 (0) 907 007 0001
Keystone Bank
Features and Benefits
- Interest rates range from 5% to 15%.
- The repayment period is within the range of 1 to 12 months.
- Borrowable amounts usually range from N10,000 to N500,000 only.
Requirements
- A valid means of identification
- Your proof of income
- A letter of employment.
- Must be at least 18 years old etc.
Contact Details
Email: contactcentre@keystonebankng.com
Tel: +234 700 2000 3000
Frequently Asked Questions
What Happens if I Cannot Repay My Payday Loan on Time?
If borrowers cannot repay their payday loan on time, they may be charged additional fees and interest. Sometimes, the lender may also take legal action to collect the debt.
How Long Do I Have to Repay a Payday Loan?
The repayment term for a payday loan is typically two to four weeks or until the borrower’s next payday. However, some lenders may offer longer repayment terms or installment loans.
How Much Can I Borrow with a Payday Loan?
The amount a borrower can request for with a payday loan varies depending on the lender and the borrower’s income. Payday loans generally cover small, unexpected expenses, so the loan amount typically ranges from a few thousand to a few hundred of thousand naira.
Can I Get a Payday Loan if I Have Bad Credit?
Having a bad credit score will make you ineligible for a payday loan.
Bottom Line
Payday loans can be a helpful resource for those needing quick cash. However, borrowers must be aware of the high-interest rates and potential for debt traps associated with payday loans. It is important to consider the pros and cons before taking out a payday loan and only borrow what can be realistically repaid within the given timeframe.
Responsible borrowing and informed decision-making are crucial for successfully managing finances and avoiding financial hardship.
