Before you borrow

First-loan checklist

Updated 2026 · English

Before you take any loan, run through this checklist

Your first loan sets a pattern for how you handle credit for years. Doing it a little carefully now saves you a lot of stress later. This checklist covers the six things worth checking before you sign anything. For the full background on each, follow the links alongside.

Why the first loan matters more than later ones

The first time you borrow, you are also building a history that lenders will look at afterwards. How you behave on a small first loan — read, managed, repaid on time — is the most reliable signal a lender has about how you will behave later. A clean first loan can open the door to better terms; a messy one can close it. That is beside the obvious personal benefit of not saddling yourself with avoidable debt, which is why it is worth slowing down on number one.

1. Check the lender

• Can you find the lender on the CBN’s lists of licensed microfinance banks and approved digital lenders?
• Does the company have a clear, real name and an official website?
• If you cannot verify licensing, do not proceed. See our lender directory and how to spot loan sharks.

2. Know the real cost

• How much will you actually receive?
• What is the total you must repay, in naira, including all fees?
• Is the interest flat or on a reducing balance? (See interest rates explained.)
• Are there processing fees, insurance, or late fees?

3. Read the contract

• Have you read every page, not just skimmed?
• What happens if you are late or miss a payment?
• Can the lender change the terms, and under what conditions?
• If something is vague, ask before you sign.

4. Plan the repayment

• Does the repayment fit comfortably inside your income?
• Have you set aside the first repayment before spending on anything else?
• What is your plan if income dips? Better to borrow less now than to scramble later.
• Avoid borrowing from several apps to cover each other — see the debt trap guide.

5. Protect your information

• Are you only being asked to verify your identity, not to hand over passwords or PINs?
• Has the app asked for more than it needs — like your whole contact list? See loan apps and privacy.
• Never share your BVN password, bank PIN, or OTPs with anyone.

6. Think before you sign

• Are you being rushed or pressured? Walk away from pressure.
• Have you compared more than one lender using our comparison framework?
• Could you avoid the loan entirely, or borrow from a cooperative or Ajo savings instead?

What to do while you wait

The gap between applying and getting the money is a good time to prepare, not just to refresh the app for an approval status. Set clear expectations with anyone who answers for you, review your emergency plan, and get your first repayment ready early. If the lender asks for additional documents, provide them honestly and quickly. Rushing for the sake of speed — accepting extra fees, granting extra permissions, or signing unseen terms — is how a good first-loan experience turns sour.

Read it again from the lender’s side

A final mental exercise can feel uncomfortable but is very useful: imagine you are the lender for a moment. What would you want to know before trusting someone with your money? You would want proof of income, identity you could verify, and a repayment that looked affordable. When your own application is honest and complete on those points, you are not just doing the paperwork — you are showing the lender you deserve the loan. That honesty also protects you, because it means you only took a loan you genuinely planned to repay on terms you fully understood.

The checklist takes only a few minutes on paper but it changes the shape of your debt in a way no fast approval can. Every item you tick is a choice you keep, every warning sign you act on is a problem you never create. Keep this page handy, run it again whenever a new lender calls, and treat it as the boundary between responsible borrowing and avoidable regret.