Financial Glossary

The total yearly cost of borrowing, including interest and fees, expressed as a percentage. Nigerian loan apps often show monthly rates—multiply by 12 for APR. A 5% monthly rate = 60% APR.

The process of spreading loan repayment over time through regular payments. Each payment covers both interest and part of the principal.

Automatic deduction of loan repayments from your bank account or wallet on due dates. Common with salary advance and fintech loans in Nigeria.

An 11-digit unique identifier linked to your biometrics (fingerprints, photo) across all Nigerian banks. Required by CBN for all financial transactions and loan applications.

A large final payment due at the end of a loan term. Some business loans structure smaller monthly payments with one big payment at the end.

Nigerian government agency responsible for business registration. CAC registration is often required for business loans.

Nigeria's central bank that regulates all financial institutions including loan apps. CBN-licensed lenders are safer to borrow from.

An asset (property, car, equipment) pledged as security for a loan. If you default, the lender can seize the collateral. Most Nigerian digital loans are unsecured.

A person who agrees to repay your loan if you cannot. Having a co-signer can help you qualify for loans or get better rates.

Organizations that collect and maintain your credit history. Nigeria has three main bureaus: CRC Credit Bureau, FirstCentral, and CreditRegistry.

The maximum amount a lender will allow you to borrow. Usually starts low and increases with good repayment history.

A detailed record of your borrowing and repayment history from credit bureaus. Shows all loans, credit cards, and payment patterns.

A numerical rating of your creditworthiness based on your borrowing history. Higher scores mean better loan terms. Scores typically range 300-850.

One of Nigeria's three licensed credit bureaus. Maintains credit records used by banks and fintech lenders for loan decisions.

The percentage of your monthly income going to debt repayments. Lenders use this to assess if you can afford more debt. Below 40% is generally good.

Failure to repay a loan according to agreed terms. Defaulting damages your credit score and may result in legal action.

The release of loan funds to your account after approval. Most Nigerian digital lenders disburse instantly to your wallet or bank account.

A fixed monthly payment amount that includes both principal and interest. Common for longer-term loans from banks and FairMoney.

The value of one currency compared to another. For remittances, this determines how much naira you receive for foreign currency sent.

Technology companies providing financial services. In Nigeria, fintechs like OPay, Carbon, and Kuda offer loans, payments, and banking services.

An interest rate that stays the same throughout the loan term. Most Nigerian loan apps use fixed rates.

The time money spends in transit during a transfer. Longer float means slower funds availability.

Time after the due date before late fees apply or default is triggered. Not all Nigerian lenders offer grace periods.

A person who agrees to repay your loan if you cannot. Required by some bank loans and higher-amount digital loans.

The cost of borrowing money, expressed as a percentage. Nigerian digital lenders typically quote monthly rates (5-30%), banks quote annual rates (15-30%).

A business loan where unpaid customer invoices are used as collateral. Businesses get immediate cash before customers pay.

Verification process required by regulators. Lenders collect your ID, BVN, and other documents to verify identity and prevent fraud.

A penalty charged when you miss a payment deadline. Can be a flat fee or daily percentage that compounds quickly.

A legal claim on an asset until a debt is paid. If you have a lien on your car, you can't sell it without paying off the loan.

The repayment period for a loan. Nigerian digital lenders typically offer 7-30 days, banks may offer 12-60 months.

A financial institution licensed by CBN to provide loans and banking services to individuals and small businesses. More accessible than commercial banks.

The real exchange rate between currencies, without markup. Remittance providers add their margin to this rate.

Digital financial services accessible through mobile phones. In Nigeria, services like OPay and PalmPay offer mobile money wallets.

A temporary pause on loan repayments, usually during emergencies. Some lenders offered moratoriums during COVID-19.

The company that operates Nigeria's payment infrastructure, including instant transfers (NIP) and bank verification.

An 11-digit unique identifier issued by NIMC to Nigerian citizens and legal residents. Increasingly used for financial services alongside BVN.

Nigeria's instant interbank transfer system. Allows real-time money transfers between different banks.

The standardized 10-digit account number format used by all Nigerian banks. Makes transfers easier across banks.

A credit facility allowing you to withdraw more than your account balance, up to an agreed limit. Kuda offers overdraft to qualifying users.

Loans funded by individual investors rather than banks. Platforms connect borrowers with lenders directly.

The original loan amount borrowed, before interest and fees are added. Your total repayment = principal + interest + fees.

A one-time charge by lenders to cover loan processing costs. Often deducted from your loan disbursement.

Taking a new loan to pay off an existing one, usually at better terms. Can reduce interest costs or monthly payments.

Money sent from one location to another, typically from abroad to Nigeria. Common corridors include US, UK, Canada, and UAE.

A plan showing when and how much you must pay back. Includes due dates and amounts for each payment.

Extending a loan by paying only interest and rolling the principal to a new term. Usually expensive and can lead to debt traps.

A short-term loan based on your expected salary. Repayment is typically deducted automatically when salary arrives.

A loan backed by collateral. If you default, the lender can seize the asset. Usually offers lower interest than unsecured loans.

How long it takes for transferred funds to become available. Ranges from instant to 3+ business days depending on method.

A unique number issued by FIRS for tax purposes. Often required for business loans alongside CAC registration.

The charge for sending money through a provider. Can be flat or percentage-based. Compare with exchange rate for true cost.

A loan not backed by collateral. Most Nigerian digital loans are unsecured. Higher risk means higher interest rates.

Unstructured Supplementary Service Data - a protocol allowing financial transactions via simple phone codes without internet.

An interest rate that can change based on market conditions. Less common in Nigerian digital lending.

Funds needed to run daily business operations. Working capital loans help businesses manage cash flow gaps.