Loans are meant to provide individuals or organizations with additional money to cover their expenses and other obligations—It is then paid back over an agreed period of time, with interest.
Personal loans and salary advance loans are the most popular offerings. While the former is an instant loan given to individuals following verification, the latter is usually extended to salaried professionals. But even though personal loans tend to cost less because they have longer-term lengths, there are still a few factors to consider before deciding what option works best for you.
According to a report by Bankrate, some of the top reasons why people get personal loans include emergencies, relocation purposes, debt reconciliation, payday loans, and other celebratory costs. Depending on why you’re taking a loan, it’s important to decide the amount based on whether you have a monthly budget for principal payments plus interest. If it’s an emergency you need money for, a salary advance loan may favor you better than payday loans because it is quicker and doesn’t involve middlemen. Nonetheless, personal loans are a very good option when it comes to vehicle financing or acquiring new gadgets. This is because, in the long run, taking out a loan means you can still build a savings portfolio for rainy days.
With rising inflation figures in countries like Nigeria (15.63%), salary earners are in fact heavily affected. Despite a steady flow of income, they face difficulties in meeting certain obligations or recurring bills. Sadly, the reality is that most Nigerians would rather borrow from friends and family than take a loan. This is largely because of high-interest rates, an inability to meet certain requirements, and the fear of harassment from digital lenders who use shame tactics to recover loans.
In order to bridge this gap, Nigeria’s foremost financial institution, First Bank of Nigeria Limited (FirstBank) offers its customers better and simpler alternatives through a variety of loan products. The bank is also creating opportunities for millions of salary earners to dream big by harnessing the full potential of their accounts.
Here’s a breakdown of its loan plans
FirstAdvance, as the name implies, helps you attend to financial obligations that may come up before salaries are paid. This plan offers a maximum amount of ₦500,000, depending on the average of the applicant’s salary over the course of 3 months. However, customers are required to have an active salary account domiciled with First Bank, with proof of regular salary payment. The cash loans for payroll customers have an interest rate set at 2.5% flat, collected upfront, and can be accessed via the bank’s FirstMobile app, and by dialing *894*11# or *894#.
FirstCredit is the most flexible plan which allows you to access quick and simple loans without any collateral or documentation. Customers can apply for loans as high as ₦300,000 using a mobile phone or tablet. But there’s a catch. The account must have been operational in First Bank for at least 6 months, alongside a good credit record. FirstCredit has an interest rate of 10% flat. Here’s how it works in a few easy steps:
Select Get New Loan#
Select the account number with which you want to apply for the loan
Grant data usage consent and accept terms and conditions
You will be presented with 4 loan amount options
Choose your desired loan amount
The loan is disbursed into your account
FirstBank’s Personal Loan Against Salary (PLAS) is an upgrade to its First Advance offering. In addition to providing the funds to cater to pressing issues that may arise, this plan allows customers to hit their other long-term targets and goals. For instance, capital projects, rent obligations, vacations, professional courses, and other fulfilling ventures. According to the bank, with PLAS, Nigerian salary earners can be assured of a funding partner to fulfill their dreams. Using this plan, salary account holders can access up to ₦30 million and pay back the loan over a period of up to 36 months, subject to a retirement age of 60 years and a flexible repayment plan. To apply you will need the following documents:
Personal Loan Application form
Statement of accounts
Applicant’s letter of total emolument
Confirmation of applicant’s employer on FBN’s approved list
Letter of irrevocable domiciliation of salary for the duration of the facility.
Complete the form and submit it at the nearest First Bank branch.
FirstBank is heavily invested in easing the pressure on customers when meeting their immediate and medium-term financial goals. The vision behind its salary advance loan (FirstAdvance) is to ensure that customers aren’t being charged high-interest rates or forced to submit more collateral. Its PLAS plan offers flexibility, and good interest rates, and helps to boost the customer’s credit score. It also doesn’t require as much paperwork since the process is carried out online.
The bank additionally boasts of strategic services and incentives targeted at giving customers the best experience. For instance, its salary account benefits include a zero opening balance and no minimum daily operating balance or AMC charge. Customers also get their first Verve or Mastercard issuance for free with unlimited access to consumer loans.