loan
A loan is money you borrow and agree to pay back with interest, on a schedule you sign before the money arrives.
In plain English
A loan is not free money that you happen to repay later. It is a purchase, and the thing you are buying is time.
You want something now that you cannot afford now. A lender gives you the money, and in exchange you give them a portion of your future income, plus a fee for the privilege. That fee is the interest, and in Nigeria it is often large enough to change the entire arithmetic of what you thought you were buying.
This is why the only honest question about any loan is what it is for. Borrowing to buy stock you will sell at a profit is a tool. Borrowing to fund a wedding, a phone or a lifestyle is a decision to pay significantly more for something you already could not afford.
Before you sign anything, work out the total you will repay, not the monthly figure. Lenders quote monthly amounts because they sound small. Multiply it out. The number at the end is sometimes almost double what you borrowed, and people find this out only after signing.
Borrow to build. Almost never to consume.
You borrow ₦1 million over two years at 30 percent. The monthly repayment looks manageable. Multiply it across twenty four months and you will repay around ₦1.36 million. You paid ₦360,000 to have the money two years earlier.
Questions people ask
What should I check before taking a loan?
The total repayment, the interest rate, every fee, the penalty for late payment, and what happens if you repay early. Lenders rarely volunteer all five.
Is borrowing ever a good idea?
Yes, when what you buy earns more than the loan costs. Stock for a business, equipment that increases output, sometimes property. The test is whether it pays for itself.
What if I cannot repay?
Speak to the lender before you miss the payment, not after. Restructuring is often possible while you are still communicating, and almost never once you have gone silent.
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