Loan agreement in Nigeria: Template, Key Clauses and Local Law (2026)

What a loan agreement is under Nigerian law A loan agreement is a contract where one party, the lender, gives money to another, the borrower, who promises to repay it, usually with interest, on agreed terms. In Nigeria a loan can be between two individuals, between a company and a bank, or between a business and a private lender. The document records how much is lent, the interest, the repayment schedule, any security, and what happens if the borrower defaults. Nigeria does not have one single statute that governs every loan. The rules depend on who the lender is. A loan from a commercial bank is governed by the Banks and Other Financial Institutions Act 2020 (BOFIA) and Central Bank of Nigeria regulation. A loan from a non-bank money lender is governed mainly by the Money Lenders Law of the relevant state, which sets licensing and, in some states, interest limits. A plain loan between a company and an individual is governed by ordinary contract law. Identify the lender first, because that decides which rules bite. This page is general information, not legal advice. Interest limits, stamp duty rates and licensing rules change by state and over time, so confirm the current position with a Nigerian lawyer before you sign. ## The local law that shapes the deal Who is lending. Money lending as a business usually needs a licence under the relevant State Money Lenders Law. In Lagos, for example, a money lender obtains a licence through the state authorities. Lending casually on a one off basis is different from carrying on the business of money lending, and the licensing rules target the business. Interest. Parties are generally free to agree an interest rate, but state Money Lenders Laws can cap rates for licensed lenders, and courts will strike down interest that is unconscionable. Say clearly whether the rate is fixed or variable, how it is calculated, and whether it is simple or compound. Compound interest must be clearly agreed. Security and charges. If a Nigerian company grants security over its assets, the charge must be registered with the Corporate Affairs Commission (CAC) under the Companies and Allied Matters Act 2020 (CAMA), generally within 90 days of creation. An unregistered charge can be void against a liquidator and other creditors, so registration protects the lender. Tax and stamp duty. Loan agreements are chargeable with stamp duty, and stamping is generally expected within 30 days of execution. Interest paid to a lender can attract withholding tax, commonly at ten per cent, with a lower treaty rate for lenders in some countries. Confirm the current rates before you draft the payment terms. Consumer protection. For regulated lenders, the Central Bank of Nigeria Consumer Protection Framework sets standards on fair treatment, disclosure and transparency. Digital lenders also face oversight from the Federal Competition and Consumer Protection Commission. ## A loan agreement template you can adapt ```

LOAN AGREEMENT This Agreement is made on [date] BETWEEN [Lender name], of [address] (the "Lender") AND [Borrower name], of [address], company number [RC number] (the "Borrower") 1. THE LOAN The Lender will lend the Borrower [amount in Naira] (the "Loan"), paid to the Borrower's account [details] on [date]. 2. PURPOSE The Borrower will use the Loan only for [purpose]. 3. INTEREST Interest is [rate] per cent per [year], calculated [simple / compound] on the outstanding balance from the date of drawdown. 4. REPAYMENT The Borrower will repay the Loan and interest by [number] instalments of [amount] on the [day] of each [month], starting [date], until fully repaid on [final date]. Early repayment is [allowed without penalty / subject to notice]. 5. SECURITY The Loan is secured by [description of security, e.g. a charge over [asset], a personal guarantee by [name]]. The Borrower will register any company charge at the CAC within the time allowed by CAMA. 6. REPRESENTATIONS The Borrower confirms it has authority to borrow, the information it gave is true, and there is no undisclosed litigation or default. 7. EVENTS OF DEFAULT The whole Loan becomes immediately due if the Borrower misses a payment for [number] days, breaches a term, becomes insolvent, or gives false information. 8. COSTS AND TAXES The Borrower pays the Lender's reasonable recovery costs. Any withholding tax on interest is handled as required by law. Stamp duty is paid by [party]. 9. GOVERNING LAW AND DISPUTES This Agreement is governed by the laws of the Federal Republic of Nigeria. Disputes will be resolved by [arbitration / the courts of Nigeria]. 10. GENERAL Entire agreement, notices in writing, no assignment by the Borrower without consent, variations only in writing signed by both parties. SIGNED by the Lender ____________ SIGNED by the Borrower ____________ Witness ____________

- An interest rate that is vague, or so high it risks being struck down as unconscionable.
- A company charge that is never registered at the CAC, leaving the security void against a liquidator.
- No stamp duty paid, which makes the agreement harder to rely on in court.
- A personal guarantee buried in the body of the loan rather than signed as its own clear undertaking.
- No events of default or acceleration clause, so the lender cannot call the whole loan on a missed payment. ## Keeping loan documents and their dates in order A loan agreement is not a document you sign and forget. It carries a repayment schedule, interest resets, a charge registration deadline, insurance renewals and covenant checks, and every one of those is a date that matters. The work that outlasts signing is tracking those dates and keeping the agreement, the schedule and the security documents in step. That is the same problem every finance team has with its contracts: drafting from a reliable template, spotting a clause that leaves the lender exposed, editing a term cleanly, and never missing a deadline, all in one place. [Adira](https://adiralaw.com) is built around that single workspace idea, with the deepest coverage today for Indian corporate law and compliance, and other jurisdictions being broadened. Nigeria specific depth is on the roadmap rather than in place today, so for a Nigerian loan use the template above and have local counsel confirm it. The point worth taking is that a loan is easier to manage when the agreement, its schedule and its deadlines live together rather than in separate files.