Collateral Loans on Property in Nigeria + Lenders

We never know if you’re thinking about getting a loan in Nigeria, and maybe someone has mentioned the term collateral loans. As its name implies, Collateral is something or a resource that is valuable that you offer to the lender as security for the loan. As you read this article, Collateral will be simplified to the last brim, especially on the loans on the property, how they operate, and which lenders accept land as collateral.

Collateral loans on property in Nigeria

To start with,  let’s illustrate what a collateral loan on property means. A collateral loan, which is also known as a secured loan, is a type of loan where you provide an asset as security for the money you borrow. In Nigeria, one common type of collateral for loans is property, which includes land, houses, or other real estate.

When you apply and obtain a collateral loan on a property, you practically offer your property as a guarantee to the lender. In return, the lender gives you a loan amount based on the value of your property. If, for any reason, you’re unable to repay the loan as agreed and the time of agreement between you two elapses, the lender has the right and the privilege to take possession of your property to recover their money.

Lenders that accept land as collateral in Nigeria

After the first enlightenment you need, let’s now dive into the intricacies of different lenders in Nigeria that accept land as collateral for loans. Let’s not forget that the availability of these loans and their terms may differ, so it’s imperative to contact the specific lender for the most current and up to date information.

  1. Banks

We believe that you agree that this is the most common institution that offers this type of service in the country. Many commercial banks in Nigeria offer loans that require property as collateral, and this can include land, houses, cars, and other properties. Some of the popular banks offering such loans include:

  • Access Bank: Access Bank is known to give priority to loan products, and you can use your land as collateral for certain types of loans, such as mortgage loans.
  • First Bank of Nigeria: First Bank also offers mortgage loans that allow you to use your property, including land, as collateral.
  • Guaranty Trust Bank (GTBank): GTBank is also known for offering mortgage loans and may accept land as collateral.
  1. Mortgage Institutions

Mortgage institutions are legally loan institutions that  specialize in loans related to property and may accept land as collateral:

  • Federal Mortgage Bank of Nigeria (FMBN): FMBN primarily focuses on mortgage financing and can provide loans secured by land and property.
  • Nigeria Mortgage Refinance Company (NMRC): NMRC supports Nigeria’s mortgage market and collaborates with primary mortgage lenders to offer property-based loans.
  1. Microfinance Banks

Microfinance banks also provide loans against property, and some may consider land as collateral. Examples include LAPO Microfinance Bank and Accion Microfinance Bank.

  1. Private Lenders

In addition to traditional banks and institutions, some private lenders and lending platforms might consider land as collateral for loans. However, exercise caution when dealing with private lenders and ensure they are reputable and registered with relevant authorities.

Using land as collateral for a loan

Before using your land as collateral for a loan, there are some critical factors to keep in mind, the factors include:

  1. Property Valuation

The lender will typically require a professional appraisal of your land to determine its value accurately. This valuation will influence the loan amount you can receive.

  1. Loan Terms

Different lenders offer varying loan terms, including interest rates, repayment periods, and eligibility criteria. Compare these terms to find the loan that best suits your needs.

  1. Repayment Plan

To avoid a story that touches the heart, Ensure you have a clear repayment plan in place to avoid the risk of losing your land if you can’t meet the loan obligations.

  1. Legal Advice

We are assured you should understand that legal advice is a big cake when it comes to collateral. It’s advisable to seek legal advice before entering into any loan agreement involving your property. A legal professional can help you fully understand the terms and implications.

Collateral loans on property, especially those involving land, can be a valuable financial tool for achieving your goals in Nigeria, whether it’s investing in real estate, expanding your business, or meeting personal financial needs. However, it’s important to approach collateral loans with careful consideration and due diligence.

In case you forgot the details in the article, let’s remind you once again. Here are a few of them:

  • Lender Selection: Research and compare lenders to find one with terms and conditions aligned with your financial objectives. Choose a reputable and licensed lender.
  • Property Valuation: Ensure your land is professionally valued for an accurate assessment of its worth, which will determine your loan amount.
  • Loan Terms: Understand the specific terms of the loan, including interest rates, repayment schedules, and eligibility criteria. Choose a loan package that suits your financial capacity and needs.
  • Repayment Plan: Create a well thought out repayment plan before committing to the loan. It’s important to ensure that you can meet your loan obligations to protect your property from repossession.
  • Legal Counsel: Seek legal advice from a qualified lawyer to review the loan agreement and ensure you fully comprehend and understand its implications. Legal guidance can help safeguard your interests.


Remember, using your land as collateral is an imperative financial decision that comes with both benefits and risks. Responsible borrowing and diligent financial planning are essential for a successful borrowing experience. Also, stay informed about changes in lending regulations and market conditions in Nigeria to secure your financial future.


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