Economy
Understanding the Costs and Fees Associated With Online Personal Loans
Personal loans are offered by both traditional and online lenders. If you’re looking for a personal loan, understanding the costs and fees associated with it is one way to help determine if the cost of the loan outweighs the benefits.
There can be many benefits to taking out an online personal loan rather than a traditional one, but there could also be some drawbacks as well. Before you borrow money from any company or lender, it’s important that you receive all of your information as well as understand what you’re signing up for in order to make the best decision possible for yourself. The following article will provide information on how much traditional and online personal loans typically cost so that you can know exactly what to expect before you decide to take out a personal loan.
Interest Rates
One of the most common fees associated with a personal loan is the interest rate, which can greatly affect how much money you have to pay back overall. Traditional lenders typically have higher interest rates than online companies as well as those from some smaller local stores. In addition, some traditional lenders may require that borrowers maintain a specific credit score or certain monthly income in order to qualify for their loans.
This can be true of many different types of lending institutions including both banks and other financial businesses such as credit unions and savings and loans associations. If you don’t already have an idea of what your credit score might be, it’s usually a good idea to check out this guide to personal loans ahead of time in order to ensure that you can be approved for a loan before you apply. It helps to know which loan options you will be comfortable with regarding the amount you loan and paying back.
While online lenders may offer lower interest rates for personal loans, they aren’t always guaranteed and could potentially change depending on certain factors such as your credit score or how much you borrow. If your credit score is below average, it’s also possible that you won’t even qualify for an online loan at all as many of them require a minimum credit score in order for borrowers to receive approval. It’s important to consider the possibility of this type of scenario if you need money fast and don’t have very good credit.
Application Fees
Along with the interest rate, you should also be aware of the application fee, which is a fee applied when you first apply for your loan. For example, many traditional lenders will charge borrowers an application fee regardless of whether or not they are approved for a loan in order to cover administrative costs associated with checking their qualifications. Institutions offering installment loans for bad credit may or may not have application fees collected, but an origination fee may be charged.
In addition, unlike mortgage origination fees, which are usually negotiable, it isn’t the case with most personal loans. This doesn’t mean you should avoid getting this loan. Some loans with origination fees have low APRs, which can be advantageous for you, so review your options first by pre-qualifying for multiple loans if possible.
While online lenders usually don’t charge an application fee to borrowers, there are some institutions that do. If you can’t afford to pay upfront costs in addition to your monthly payments throughout the life of your loan, it’s important that you find out what fees are required before choosing where to take out your money from. Some lenders may only require that applicants pay their interest rate but others could require additional expenses such as processing fees and possibly even insurance premiums for covering the loan itself.
Prepayment Penalties
If you need to pay back your personal loan before the standard repayment term is up, you could potentially incur fees if you’re unable to do so beforehand. This fee is known as a prepayment penalty, which some lenders may require borrowers to pay in order to compensate for business expenses that were incurred during the processing or administration of an account. Borrowers would only be responsible for this fee if they are unable to make their regular payments without defaulting on the loan entirely. If an individual exceeds their credit limit on any type of credit card, it may trigger potential penalties such as this one.
There are many different types of lending institutions out there and not all of them will charge prepayment penalties. If you know that you’ll be able to make your payments on time, it’s best to shop around as much as possible before deciding which company to take out your loan from.
Other Fees You Should Know About
Credit Unions or Other Lending Institutions
Although many traditional financial institutions such as credit unions may offer very low rates and fees for borrowers, they aren’t always available for everyone and can potentially have restrictions depending on your location or certain qualifications that must be met. For instance, some credit unions only serve members who meet their organization’s requirements such as having a specific job title or living in a specific area.
Loans with Guarantor
If you apply for a personal loan through a company that requires a guarantor in order to approve your application, be sure to find out what they’ll charge for this service. In some cases, companies may also request additional fees from the co-signer who vouches for another individual’s ability to repay their debts on time.
Stopping Payment on Check Loans
If you took out a loan against your upcoming paycheck, it’s important that you know how much it will cost if you ever need to stop payment on a check before it has been cashed by the lender. Most institutions will require borrowers to pay an amount equivalent to at least one full cycle of interest regardless of whether or not the check was actually deposited.
Online lenders are beginning to rise in popularity over traditional lending institutions because they typically don’t require borrowers to pay the same fees or interest rates that many brick-and-mortar companies do. Although online loans may come with lower costs, it’s important that you factor in all fees before choosing where to apply for your loan to ensure that the rate you’re offered is fair for your financial situation.
If you feel like you would be more comfortable speaking with someone directly, there are also many different places you can go in order to apply for a personal loan in person. Even if you’re certain an online lender will approve your application, it never hurts to check out what other options are available so you can compare costs and determine which one would be the best solution to meet your needs.
By Dipo Olowookere
The local stock market firmed up by 1.13 per cent on Friday as appetite for Nigerian stocks remained strong.
Investors reacted well to the 2026 budget presentation of President Bola Tinubu to the National Assembly yesterday, especially because of the more realistic crude oil benchmark of $64 per barrel compared with the ambitious $75 per barrel for 2025. This year, prices have been between $60 and $65 per barrel.
Business Post observed profit-taking in the commodity and energy sectors as they respectively shed 0.14 per cent and 0.03 per cent.
But, bargain-hunting in the others sustained the positive run, with the consumer goods index up by 3.82 per cent.
Further, the industrial goods space appreciated by 1.46 per cent, the banking counter improved by 0.08 per cent, and the insurance industry gained 0.04 per cent.
As a result, the All-Share Index (ASI) increased by 1,694.33 points to 152,057.38 points from 150,363.05 points and the market capitalisation chalked up N1.080 trillion to finish at N96.937 trillion compared with Thursday’s closing value of N95.857 trillion.
A total of 34 shares ended on the advancers’ chart, while 24 were on the laggards’ log, representing a positive market breadth index and bullish investor sentiment.
Austin Laz gained 10.00 per cent to close at N2.42, Union Dicon also jumped 10.00 per cent to N6.60, Tantalizers increased by 9.80 per cent to N2.69, Aluminium Extrusion improved by 9.78 per cent to N12.35, and Champion Breweries grew by 9.71 per cent to N16.95.
Conversely, Sovereign Trust Insurance dipped by 7.42 per cent to N3.87, Royal Exchange lost 6.84 per cent to trade at N1.77, Omatek slipped by 6.84 per cent to N1.09, Eunisell depreciated by 5.88 per cent to N80.00, and Eterna dropped 5.63 per cent to close at N28.50.
Yesterday, traders transacted 1.5 billion units worth N21.8 billion in 25,667 deals compared with the 839.8 million units sold for N32.8 billion in 23,211 deals in the preceding session, showing a surge in the trading volume by 76.61 per cent, an uptick in the number of deals by 10.58 per cent, and a shrink in the trading value by 33.54 per cent.
By Adedapo Adesanya
Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.
The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.
FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.
On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.
During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.
The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Adedapo Adesanya
It was not a good day for the Nigerian Naira at the two major foreign exchange (FX) market on Friday as it suffered a heavy loss against the United States Dollar at the close of transactions.
In the black market segment, the Naira weakened against its American counterpart yesterday by N10 to quote at N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier, and at the GTBank forex counter, it depreciated by N2 to settle at N1,467/$1 versus Thursday’s closing price of N1,465/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, which is also the official market, the nation’s legal tender crashed against the greenback by N6.65 or 0.46 per cent to close at N1,464.49/$1 compared with the preceding session’s rate of N1,457.84/$1.
In the same vein, the local currency tumbled against the Euro in the spot market by N2.25 to sell for N1,714.63/€1 compared with the previous day’s N1,712.38/€1, but appreciated against the Pound Sterling by 73 Kobo to finish at N1,957.30/£1 compared with the N1,958.03/£1 it was traded in the preceding session.
The market continues to face seasonal pressure even as the Central Bank of Nigeria (CBN) is still conducting FX intervention sales, which have significantly reduced but not remove pressure from the Naira. Also, there seems to be reduced supply from exporters, foreign portfolio investors and non-bank corporate inflows.
President Bola Tinubu on Friday presented the government’s N58.47 trillion budget plan aimed at consolidating economic reforms and boosting growth.
The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. It also projects an exchange rate of N1,400 to the Dollar.
President Tinubu said inflation had plunged to an annual rate of 14.45 per cent in November from 24.23 per cent in March, while foreign reserves had surged to a seven-year high of $47 billion.
Meanwhile, the cryptocurrency market was dominated by the bulls but it continues to face increased pressure after million in liquidations in previous session over accelerating declines, with Dogecoin (DOGE) recovering 4.2 per cent to trade at $0.1309.
Further, Ripple (XRP) appreciated by 3.9 per cent to $1.90, Cardano (ADA) rose by 3.5 per cent to $0.3728, Solana (SOL) jumped by 3.4 per cent to $126.23, Ethereum (ETH) climbed by 2.9 per cent to $2,982.42, Binance Coin (BNB) gained 2.0 per cent to sell for $853.06, Bitcoin (BTC) improved by 1.7 per cent to $88,281.21, and Litecoin (LTC) soared by 1.2 per cent to $76.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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