Must-Know! Student Loan in Nigeria - Everything You Need to Know

Student Loan in Nigeria - Everything You Need to Know​


Education is a vital aspect of every Nigerian household, regardless of their social status. However, the cost of education can be quite high, making it challenging for many students to afford.

To address this issue, various platforms now offer student loans in Nigeria to help finance the pursuit of higher education.

In this comprehensive guide, we will delve into the details of student loans in Nigeria, covering everything from the definition and overview of student loans to the application process, eligibility criteria, repayment structure, and available loan apps for students.

What is a Student Loan?​

A student loan is a financial tool designed to assist students in paying for their education and associated expenses.

Unlike other types of loans, student loans typically have lower interest rates and more flexible repayment schedules, making them more accessible and manageable for students.

Overview of the Student Loan Bill in Nigeria​

The Nigerian government has implemented the Access to Higher Education Act, 2023, which aims to provide interest-free education loans to Nigerian students pursuing tertiary education.

The Student Loan Act establishes the Education Loan Fund, which is specifically designed to support Nigerians in funding their higher education.

Under this scheme, students can repay the loan in installments, starting two years after completing their participation in the National Youth Service Corps (NYSC) program.

The bill, originally introduced by Femi Gbajabiamila, the former Speaker of the House of Representatives, gained significant attention from the National Assembly in November 2022.

This increased attention followed a prolonged strike by the nation's university workers' union, which protested poor working conditions and other grievances.

The Education Loan Fund will be financed through various sources, including one percent of all profits derived by the federal government from oil and other minerals, as well as one percent of taxes, levies, and duties collected by the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), and Nigerian Customs Service (NCS).

Additionally, the fund will receive contributions from education bonds, education endowment fund schemes, donations, gifts, grants, and revenue generated from other sources to support the initiative.
To ensure proper management and control of the fund, an 11-member special committee will oversee its operations. The committee will be chaired by the Governor of the Central Bank of Nigeria (CBN) and consist of representatives from the Ministry of Education, Ministry of Finance, Auditor-General of the Federation, National Universities Commission (NUC), Forum of University Vice-Chancellors, Forum of Polytechnic Rectors, Forum of Provosts of Colleges of Education, Nigeria Labour Congress (NLC), Nigerian Bar Association (NBA), and Academic Staff Union of Universities (ASUU).

The committee will establish regulations and guidelines for the management, administration, disbursement, and loan repayment under the Act, which will be binding on all stakeholders.

Eligibility for Student Loans​

According to the Student Loan Act, eligibility for student loans is limited to students attending government-owned tertiary institutions once the program is implemented.

The Act ensures equal access to loans for all students, without discrimination based on gender, religion, tribe, position, or disability.

Institutions of higher learning covered by the Act include public universities, polytechnics, colleges of education, and vocational schools established by the government. To qualify for a student loan, applicants must have a total income or family income of less than N500,000 per annum.

Additionally, students must provide at least two guarantors who meet specific criteria. The guarantors can be civil servants of at least level 12, lawyers with at least ten years of post-call experience, judicial officers, or justices of peace.

However, students will be disqualified from obtaining a loan if they have been found guilty of examination malpractice by any school authority or if they have been convicted of a felony or any offense involving dishonesty or fraud.

Repayment Structure​

The Student Loan Act does not specify a fixed repayment period or plan. Instead, loan repayment begins precisely two years after completing the National Youth Service Corps (NYSC) program. Beneficiaries are required to remit 10 percent of their income to the Education Loan Fund at the end of each month. For self-employed individuals, 10 percent of their total monthly profit is to be remitted as part of the repayment plan.

Defaulting on loan repayment carries consequences, including a fine of N500,000, a two-year jail term, or both, as specified by the Act.

Applying for a Student Loan in Nigeria​

To apply for a student loan in Nigeria, candidates must follow a specific process:

  1. Submit their applications to the chairperson of the special committee through their respective banks.
  2. Include a cover letter signed by the head of their institution.
  3. Provide a copy of their admission letter.
  4. Submit at least two guarantor letters addressed to the chairperson of the committee.
  5. Include two passport photographs from each of the guarantors.
  6. Provide evidence of employment and employer details.
  7. For self-employed guarantors, include their business registration with the Corporate Affairs Commission (CAC) or any other appropriate authority, as well as their banking information.
After submitting the application, the committee will communicate the status of the application within 14 days of receipt. Disbursement of funds will be based on the availability of funds.

Loan Apps for Students in Nigeria​

In addition to the government's student loan initiative, several loan apps in Nigeria cater specifically to the needs of students. These loan apps provide a quick and convenient way for students to access loans using their Android or iOS devices. Here are some of the top loan apps for students in Nigeria:

  1. Fairmoney: Fairmoney offers low-interest loans with a simple user interface. Eligibility criteria include having the Fairmoney MFB app, a supported bank account, and a good credit history.
  2. Carbon: Formerly known as PayLater, Carbon provides loans without collateral or a guarantor. The loan amount and interest rate are determined based on credit history and application data.
  3. Branch: Branch offers quick and easy loans with varying interest rates and loan durations. The loan amount and terms are determined based on credit history and repayment behavior.
  4. Aella Credit: Aella Credit provides loans to students with a source of income. The app offers a simple registration process and flexible repayment terms.
  5. PalmCredit: PalmCredit offers loans ranging from N2,000 to N100,000 with a user-friendly app interface. Repayment options are available for up to 180 days.
  6. QuickCheck: QuickCheck allows students to access quick loans without collateral. The app uses an algorithm to determine loan eligibility and offers flexible repayment options.
  7. Alat: Alat, operated by Wema Bank, provides loans of up to N2,000,000. The app offers a convenient and paperless loan application process.
  8. Okash: Okash offers loans with a simple application process and quick disbursement. The loan amount and interest rate are determined based on credit history and repayment behavior.
  9. Umba Loan App: Umba offers loans with easy identification verification and a risk analysis process. Repayment behavior can qualify borrowers for higher loan amounts and lower interest rates.
  10. KwikMoney (Migo): KwikMoney offers loans through its website, providing quick access to funds without paperwork. The loan repayment period is between 14 and 30 days.
These loan apps provide students with additional options for accessing funds to support their education and personal expenses.

It is essential to review the terms and conditions of each loan offer and ensure the repayment is within your means before accepting any loan.


Obtaining a student loan in Nigeria has become more accessible with the implementation of the Access to Higher Education Act.

This legislation establishes the Education Loan Fund and provides a framework for interest-free education loans for Nigerian students.

Additionally, loan apps specifically designed for students offer convenient and quick access to funds. It is important for students to carefully consider their financial circumstances and repayment capabilities before applying for a loan.

By utilizing the available resources and making informed decisions, students can pursue their education without undue financial burden.