Oftentimes, people search for means to get a bank loan or seek to know if they are eligible for a bank loan like a first bank loan etc…
As humans, for you to have a stable lifestyle and a stress-free life like paying for house rent, buying or building your dream home, buying your dream car, giving to a loved one, supporting a family friend or donating to a cause etc comes with having multiple income streams. Life is meant to be lived and enjoyed but the uncertainties help many people back which arises from not coming from a rich background and even if you do, you’re prone to meet with uncertainties that’s because you’re only human.
To help cater for such uncertainties and to make life easier, the situation presents man with developing various financial institutions among which are the banks. The bank has various ways to help solve man’s financial problems among which is the issuance of various soft loans to meet up with unfavourable conditions or to improve the quality of life such as buying your dream home, buying your dream car, starting a business and a whole lot more.
Thus the core of this article is to discuss how you can qualify for a bank loan, specifically First Bank loans. But before delving into the subject matter, let’s talk about what a loan is and its importance, advantages as well as disadvantages associated with it.
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What Is A Loan?
Generally, a thing that is borrowed, especially a sum of money that is expected to be paid back with interest is known as a loan.
According to Wikipedia, In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations etc. The recipient incurs a debt and is usually liable to pay interest on that debt until it is repaid as well as to repay the principal amount borrowed.
Moreso, A loan is when money is given to another party in exchange for repayment of the loan principal amount plus interest. Loan terms are agreed to by each party before any money is advanced. A loan may be secured by collateral such as a mortgage or it may be unsecured such as a credit card.
According to Investopedia, the term loan refers to a type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount. In many cases, the lender also adds interest and/or finance charges to the principal value which the borrower must repay in addition to the principal balance. Loans may be for a specific, one-time amount, or they may be available as an open-ended line of credit up to a specified limit. Loans come in many different forms including secured, unsecured, commercial, and personal loans.
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Types Of Loans
Personal Loans
Just as the name implies, this type of loan is for personal stuff like going on a vacation or buying a new television with it, spend it anyhow you like.
You can get these loans at almost any bank. The downside is that they are usually for small amounts at most $5,000 and the interest rates are higher than secured loans.
Cash Advances Loans
In case of an emergency and the need to get money quickly arises and maybe when there is no other alternative, cash advances from your credit card company. These loans are easy to get but can have extremely high-interest rates. They usually are only for small amounts, ideally $1,000 or less.
Student Loans
This kind of loan helps you as a student to help finance a college education. The most common loans are Stafford loans and Perkins loans. The interest rates are very reasonable, and you usually don’t have to pay the loans back while you are a full-time college student. The downside is that these loans can add up to well over $100,000 in the course of four, six or eight years, leaving new graduates with huge debts as they embark on their new careers.
Mortgage Loans
This is the biggest loan option. If you are looking to purchase your first home or some form of real estate, this is likely the best option. These loans are secured by the house or property you are buying. That means if you don’t make your payments promptly, the bank or lender can take your house or property back.
Small Business Loans
This set of loans is usually offered by local banks to people who intend to start a business. They do require a little more work than normal and often require a business plan to show the validity of what you are doing. These are often secured loans, so you will have to give up some personal assets as collateral in case the business fails.
Advantages Of Loans
Business Growth And Expansion
Loans are a great way for a business to expand and grow quicker than it could have naturally. Access to additional money helps businesses hire more employees, buy inventory and invest in needed machinery.
Flexibility
A bank loan allows one to repay as per convenience as long as the instalments are regular and timely. Unlike an overdraft where all the credit is deducted in go. Or a consumer credit card where the maximum limit cannot be utilized in one go.
Cost-Effectiveness
When it comes to interest rates, bank loans are usually the cheapest option compared to overdrafts and credit cards.
Profit Retention
When you raise funds through equity you have to share profits with shareholders. However, in a bank loan raised finance, you do not have to share profits with the bank.
Benefit Of Tax
Government makes the interest payable on the loan a tax-deductible item when the loan has been taken for business purposes.
Disadvantages
Financial Bottleneck
Since getting big finance from a bank is normally on a collateral base, most small scale businesses will find it hard to finance their operations based on bank loans.
Irregular Payment Amounts
In a case of over a long duration payback basis through monthly instalment, they might witness variation in the rate of interest. This means that the EMI will not be constant, rather it will change as per the influence of the market on the interest applicable.
How To Be Eligible For First Bank Loan
First Bank loans come in different forms, each with its competitive rates and flexible terms. These forms range from personal loans, mortgage loans, business loans, and student loans to cash service loans.
To get complete details of the requirements of these loans we recommend using the steps below when applying for a First Bank Loan.
For a business loan, talk to one of the first Bank experts on a small business financial consultation.
For a mortgage loan, forms can be filled out online.
For personal loans or credit cards, just contact the nearest First Bank branch to you and speak to one of their associates.
Whether it’s building a business or moving into your dream home, a First Bank loan can help you with some of life’s biggest purchases.
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Also, there’s a direct shortcode on mobile phones to check one’s eligibility.
You can access FirstCredit by dialling *894# and then follow the below steps:
Select 3. Loans
Select 1. FirstCredit
Select your account number
Select 1 to give consent
Select your desired loan amount
Input your USSD 5-digit PIN
