Mr. Olabayo Ojo earns N150,000 per
month. Apart from other basic needs, he also pays N350,000 annually for
his three bedroom apartment in the Alagbole area of Lagos State.
The rent was due for payment three
months ago and he has been pleading with the landlord to give him time
to pay up.
Ojo claims to have incurred huge debts in the last six
months, and this has made saving for the rent very difficult.
But the landlord says he has exhausted his patience and has handed Ojo a quit notice.
The outstanding rent is not the only
thing bothering him. His children’s school fees have been increased and
he does want them sent home from school. He is urgently in need of cash
to meet these financial obligations.
But Ojo has a saving grace, which many salary earners may not be aware of – a bank overdraft from one’s salary account.
Keeping customers’ money safe and paying
it to them when needed is not the only thing banks do. People need to
know the various products and services offered by their banks in order
to derive maximum benefits from them.
One of these services is getting loans
from banks without collateral security or a guarantor. Many customers
who usually approach the bank for loans do not have any asset to stand
for them as collateral.
The most important thing a borrower needs to enjoy this kind of facility is his salary account.
There are, however, some basic requirements for this bank loan.
Have a salary account
The worker’ salary account must be
domiciled with the bank he is approaching for a bank overdraft. Most
employers usually pay their workers’ salaries through banks. They,
therefore give every worker the options of selecting the bank they want
the monthly salary sent to.
Minimum period of banking
Every bank offering this service says
the worker should have been receiving his salary through the bank for a
specific period. This could be between three and six months, depending
on the bank.
Minimum salary
Some of the banks stipulate the minimum
amount that the worker must be earning to have access to a bank loan
using the salary as collateral.
Corporate employers
The worker must be working in an
organised entity, which could be a government office or private company.
The employer must also be the type that pays salaries regularly. If the
employer is the type that owes workers for months or years, the bank
may not approve the loan to the worker.
No collateral
The worker does not need to bring the
certificate of ownership of any asset or get someone to stand for him as
a guarantor. His salary is sufficient to do that for him.
Integrity
The worker should be someone with
integrity. The bank may want to verify from the employer if the worker
has any form of dubious character. This is to be sure he will not take
the loan and fail to pay back. Should the worker try to exit the firm
before the end of the period of repayment, he or his employer needs to
notify the bank on how to repay the loan.
Repayment
The worker may be given some months or a
year to repay the loan. The repayment period will be stipulated in the
contract form and the percentage to be deducted from his monthly salary
throughout the period of repayment. However, most banks insist that what
will be repaid every month should not exceed a half of the worker’s
salary.
Interest rates
The borrower will be charged some
interest on the loan, which will be spread across the period of
repayment. A worker should look at the interest rate to see if he is
comfortable with it.
Application
The borrower needs to fill a loan
application form either online or at the bank. He can make further
enquiries on the loan options by talking to his bank. However, the bank
has a final say on the loan request – whether to approve or reject it.
Another loan
If a worker repays all his loans without any default, he can still be given another loan when the need arises.
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