Loan Repayment Plan (Nigeria)
LOAN REPAYMENT PLAN
Lender: [Lender Name], of [Lender Address]
Borrower: [Borrower Name], of [Borrower Address]
Loan Agreement Date: [Loan Agreement Date]
LOAN SUMMARY
Principal Amount: [Principal Amount]
Annual Interest Rate: [Annual Interest Rate]
Interest Computation Method: [Interest Method]
Disbursement Date: [Disbursement Date]
Repayment Frequency: [Repayment Frequency]
Number of Instalments: [Number of Instalments]
Instalment Amount: [Instalment Amount]
First Repayment Date: [First Repayment Date]
Final Repayment Date: [Final Repayment Date]
Total Interest Payable: [Total Interest Payable]
Total Amount Repayable: [Total Amount Repayable]
REPAYMENT SCHEDULE
The detailed repayment schedule (showing each instalment number, due date, interest component, principal component, and outstanding balance) is set out in the Schedule attached hereto and forms part of this Loan Repayment Plan.
PAYMENT INSTRUCTIONS
All repayments must be made to: [Payment Account]
GRACE / MORATORIUM PERIOD
[Moratorium Period]
PREPAYMENT
[Prepayment Terms]
DEFAULT
If the Borrower fails to pay any instalment on its due date, default interest at [Default Interest Rate] shall accrue on the overdue amount from the due date until the date of actual payment. The Lender may, on 7 days written notice, declare the entire outstanding balance immediately due and payable.
This Loan Repayment Plan shall be stamped under the Stamp Duties Act (Cap S8, LFN 2004) and forms part of the Loan Agreement dated [Loan Agreement Date].
Lender
________________
Signature
Borrower
________________
Signature
What Is a Loan Repayment Plan (Nigeria)?
A Loan Repayment Plan in Nigeria sets the principal, interest, repayment schedule and security governing a loan between lender and borrower.
Repayment plans in Nigeria are legally significant as they form the definitive record of the borrower's payment obligations. Where a loan agreement provides that the repayment schedule shall be as set out in a schedule attached thereto, the repayment plan constitutes part of the loan contract and is binding on both parties. Courts in Nigeria regularly refer to repayment schedules when computing the outstanding debt owed by a borrower in default — see for example Access Bank Plc v Okonkwo (unreported, Lagos High Court) where the court accepted the bank's computerised amortisation schedule as evidence of the outstanding balance.
The principal methods of computing loan repayments used in Nigeria are: (1) Equal Monthly Instalments (EMI), also called reducing-balance or annuity repayment, where each instalment is equal in total but consists of a decreasing interest component and an increasing principal component over time — this is the standard method used by Nigerian commercial banks such as First Bank of Nigeria, Access Bank, Zenith Bank, and GTBank for term loans and mortgage loans; (2) flat-rate interest, where interest is computed on the original principal throughout the loan term (not on the reducing balance) and added to the total repayment — this method is commonly used by microfinance banks licensed by the CBN and cooperative societies registered under state cooperative societies laws; and (3) bullet or balloon repayment, where interest is paid periodically but the entire principal is repaid in a single payment at maturity — used in commercial paper, bond financing, and some bridge loans in Nigeria.
For mortgage loans advanced by CBN-licensed Primary Mortgage Banks (PMBs) and by the Federal Mortgage Bank of Nigeria (FMBN) under the National Housing Fund scheme, repayment plans are regulated by the CBN's Guidelines for Primary Mortgage Banks and the National Housing Fund Regulations, which prescribe maximum loan-to-value ratios, maximum loan tenors, and minimum monthly repayment amounts relative to the borrower's income.
The Personal Income Tax Act (PITA, Cap P8, LFN 2004) and the Companies Income Tax Act (CITA, Cap C21, LFN 2004) are relevant to the interest component of repayments: interest paid on business loans is deductible from taxable income by corporate borrowers (subject to FIRS thin capitalisation rules under the Income Tax (Transfer Pricing) Regulations 2018), while withholding tax at 10% applies to interest payments made to financial institutions under the Withholding Tax Regulations.
The legal framework governing the Loan Repayment Plan (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Loan Repayment Plan (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Contract Law (received English common law) sets the foundational requirements.
When Do You Need a Loan Repayment Plan (Nigeria)?
A Loan Repayment Plan in Nigeria is needed whenever a borrower and lender wish to document the specific repayment schedule for a loan in writing, either as a standalone document or as a schedule attached to the main loan agreement.
A Loan Repayment Plan is needed when a commercial bank in Nigeria — such as First Bank, Zenith Bank, GTBank, Access Bank, or UBA — advances a term loan to a corporate or individual borrower and requires the borrower to sign and acknowledge the amortisation schedule showing each monthly instalment amount, due date, and outstanding principal balance.
A Loan Repayment Plan is required for mortgage loans advanced by CBN-licensed Primary Mortgage Banks (PMBs) and by the Federal Mortgage Bank of Nigeria (FMBN) under the National Housing Fund scheme, where CBN regulations require the lender to provide the borrower with a written repayment schedule disclosing the total interest cost and the monthly instalment obligation before the loan is disbursed.
A Loan Repayment Plan is needed when a microfinance bank or cooperative society registered under the Lagos State Cooperative Societies Law or equivalent state laws advances a microloan to an individual member, to document the weekly or monthly repayment obligations in clear terms that the borrower can understand and budget for.
A Loan Repayment Plan is required for employee salary advance loans — where an employer deducts monthly repayments from the employee's salary — to comply with Section 18 of the Labour Act (Cap L1, LFN 2004) which restricts deductions from wages and requires written authorisation from the employee.
A Loan Repayment Plan is needed in private lending arrangements between individuals or family members, to provide a clear record of the repayment obligations and to avoid disputes over how much has been paid and how much remains outstanding. A signed repayment plan is admissible as evidence of the debt in the Magistrate Court or State High Court.
Parties in Nigeria should prepare a Loan Repayment Plan (Nigeria) proactively rather than waiting for a dispute to arise. Under Section 4 of the Stamp Duties Act (Cap S8, LFN 2004), loan repayment schedules used as evidence in court must be stamped by the Federal Inland Revenue Service (FIRS) or the relevant State Internal Revenue Service. Section 18 of the Labour Act (Cap L1, LFN 2004) restricts deductions from employee wages — salary deduction loan repayment plans require the employee's written authorisation, enforceable before the National Industrial Court of Nigeria (NICN) under the National Industrial Court Act 2006. Section 189 of the Companies and Allied Matters Act 2020 (CAMA 2020) requires registration of charges at the Corporate Affairs Commission (CAC) for company loans secured over assets. Section 2 of the Limitation Law of Lagos State (Cap L62, Laws of Lagos State) imposes a 6-year limitation period — a fresh cause of action arises on each missed instalment. Section 74 of the Insurance Act (Cap I17, LFN 2004) requires insurers to settle claims within 90 days, relevant to loan protection insurance plans. Section 10 of the Banks and Other Financial Institutions Act 2020 (BOFIA 2020) regulates licensed lending activities of the Central Bank of Nigeria (CBN). Section 22 of the Land Use Act 1978 (Cap L5, LFN 2004) governs mortgage security over real property. The Nigeria Data Protection Act 2023 (NDPA) administered by the Nigeria Data Protection Commission (NDPC) governs processing of borrower personal data by lenders. The Federal High Court has jurisdiction over CBN-regulated lending disputes under Section 251 of the Constitution of the Federal Republic of Nigeria 1999.
What to Include in Your Loan Repayment Plan (Nigeria)
A Loan Repayment Plan in Nigeria must contain the following essential elements.
Loan Identification: Full legal names of the lender and borrower, date of the original loan agreement, principal amount in NGN, and loan purpose — linking the repayment plan to the underlying loan contract. Where the lender is a CBN-licensed bank — such as First Bank of Nigeria, Zenith Bank, GTBank, Access Bank, or United Bank for Africa (UBA) — the bank's CBN licence number under the Banks and Other Financial Institutions Act 2020 (BOFIA 2020) should be referenced. For Federal Mortgage Bank of Nigeria (FMBN) loans under the National Housing Fund (NHF) scheme, the NHF reference number must be stated.
Interest Rate and Computation Method: The applicable interest rate (percentage per annum or per month), the method of computation — reducing balance (diminishing balance/annuity, used by CBN-licensed commercial banks), flat rate (used by microfinance banks licensed under the CBN Microfinance Policy Regulatory and Supervisory Framework, and by cooperative societies registered under state Cooperative Societies Laws), or bullet/balloon (used in commercial paper and bridge loans) — and the basis for calculation (actual/365 days or 30/360). The CBN's consumer protection guidelines require disclosure of the Annual Percentage Rate (APR) to retail borrowers to enable comparison of loan products.
Repayment Schedule Table: A tabular schedule showing, for each instalment: the instalment number, the due date (DD/MM/YYYY), the total instalment amount in NGN, the interest component, the principal component, and the outstanding principal balance after each payment. The final row must show the balance reducing to zero. For mortgage loans advanced by CBN-licensed Primary Mortgage Banks (PMBs), the schedule must comply with the CBN Guidelines for Primary Mortgage Banks.
Total Cost of Loan: A summary showing total principal disbursed, total interest payable under the Companies Income Tax Act (CITA, Cap C21, LFN 2004) and Personal Income Tax Act (PITA, Cap P8, LFN 2004) framework, and total amount repayable. Withholding tax at 10% under the Finance Act 2023 applies to interest paid to financial institutions — this must be reflected in the net payment obligations. The Federal Inland Revenue Service (FIRS) and State Internal Revenue Services administer tax obligations on interest income.
Payment Instructions: Bank account details — bank name, account number, sort code of the CBN-licensed receiving bank — or instructions for direct debit or standing order. For salary deduction loans, the employer's payroll authorisation under Section 18 of the Labour Act (Cap L1, LFN 2004) must accompany the repayment plan, authorising monthly deductions; the National Industrial Court of Nigeria (NICN) has jurisdiction over disputes about unlawful salary deductions.
Early Repayment Terms: Whether prepayments — partial or full — are permitted before scheduled dates, and any prepayment penalty (typically 1–3% of the prepaid amount at Nigerian commercial banks). For FMBN NHF loans, the NHF Regulations govern early repayment terms.
Default Provisions: Consequences of missing a scheduled instalment — default interest rate (typically 3–5% above the contracted rate), grace period (if any), and the lender's right to apply for summary judgment under Order 10 of the Lagos State High Court (Civil Procedure) Rules 2019 or equivalent rules in other states. For secured loans, the lender may enforce the mortgage security over real property (subject to the Land Use Act 1978 and governor's consent) or enforce a charge registered at the Corporate Affairs Commission (CAC) under Section 189 of CAMA 2020. The Limitation Law of Lagos State (Cap L62) imposes a 6-year limitation period for simple contract debts — a fresh cause of action arises on each missed instalment.
Signatures and Stamp Duty: Signatures of both lender and borrower (and guarantor, if any). The document must be stamped under the Stamp Duties Act (Cap S8, LFN 2004), assessed by FIRS or the relevant State Internal Revenue Service, before it can be tendered as evidence in court proceedings. Courts including the Federal High Court and State High Courts of Lagos, Rivers, and Kano will not admit an unstamped loan document as evidence without payment of penalties.
Data Protection: Personal data of the lender, borrower, and guarantor must comply with the Nigeria Data Protection Act 2023 (NDPA) administered by the Nigeria Data Protection Commission (NDPC), and the Nigeria Data Protection Regulation (NDPR) 2019. Governing law is the laws of the Federal Republic of Nigeria and the applicable state. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Forms Legal. (2026). Loan Repayment Plan (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/financial/loans/loan-repayment-plan-nigeria
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author = {{Forms Legal}},
title = {Loan Repayment Plan (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/financial/loans/loan-repayment-plan-nigeria}},
note = {Free legal document template. Based on Contract Law (received English common law)}
}Frequently Asked Questions
The distinction between flat-rate and reducing-balance interest is one of the most important concepts for borrowers in Nigeria, because it significantly affects the true cost of a loan. Under the flat-rate method, interest is computed on the full original principal amount throughout the entire loan term — regardless of how much principal has already been repaid. For example, on a NGN 1,000,000 loan at 10% per annum flat rate over 12 months, the total interest is NGN 100,000, making monthly instalments of NGN 91,667. Under the reducing-balance (also called diminishing balance or annuity) method, interest is computed only on the outstanding principal balance at the beginning of each period — so as the borrower repays principal, the interest charge falls. For the same NGN 1,000,000 loan at 10% per annum reducing balance over 12 months, the total interest is approximately NGN 54,000 — significantly less than the flat-rate cost. CBN-licensed commercial banks in Nigeria are required under CBN consumer protection guidelines to disclose the Annual Percentage Rate (APR) — the effective annual cost of the loan — which enables borrowers to compare products. Microfinance banks and cooperative societies in Nigeria commonly use flat-rate interest, which, when converted to an APR equivalent, can be nearly double the stated flat rate. Borrowers should always ask their lender to confirm whether the quoted rate is flat rate or reducing balance before signing a loan agreement.
A borrower in Nigeria who cannot meet the original repayment schedule may request a loan restructuring from the lender — also called a loan modification or rescheduling. The lender is not legally obliged to agree to a restructuring, but CBN-licensed banks in Nigeria are required by the CBN's Prudential Guidelines for Deposit Money Banks to offer restructuring options to borrowers in financial difficulty before classifying a loan as non-performing and commencing enforcement action. A loan restructuring might involve: extending the loan tenor (and thereby reducing the monthly instalment amount); granting a moratorium or grace period during which only interest (and not principal) is payable; capitalising arrears into the outstanding principal; or reducing the interest rate. Any agreed restructuring must be documented in writing — either by way of a Deed of Variation to the original loan agreement, a Loan Restructuring Agreement, or a fresh loan agreement — and a revised repayment plan schedule should be attached. The revised repayment plan must be stamped under the Stamp Duties Act before use as evidence in court. For mortgage loans, the CBN's Framework for the Resolution of Non-Performing Mortgage Loans sets out specific restructuring procedures that Primary Mortgage Banks must follow before commencing foreclosure proceedings.
When a borrower defaults on a loan in Nigeria and the lender commences court proceedings to recover the debt, the court calculates the outstanding amount owed by reference to the loan agreement and repayment schedule. The amount claimable typically includes: (1) the outstanding principal balance — being the original principal less all principal repayments actually made according to the repayment schedule; (2) accrued contractual interest up to the date of judgment — calculated in accordance with the interest rate and computation method specified in the loan agreement and repayment plan; (3) default interest from the date of default to the date of judgment, at the default rate specified in the loan agreement; and (4) costs and legal fees, if awarded by the court. Nigerian courts have consistently held that a borrower is entitled to credit for all payments made, and a lender cannot claim interest on interest (compound interest) unless the loan agreement expressly provides for compounding — see UBA Plc v Tropic Foods Limited [2016] (unreported, Lagos High Court). The court will scrutinise the repayment schedule and bank statements to determine what payments have been made and what remains outstanding. Where a lender seeks summary judgment under Order 10 of the Lagos State High Court (Civil Procedure) Rules 2019, the lender must exhibit the signed loan agreement, the repayment schedule, and the statement of account showing the outstanding balance.
In Nigerian lending practice, a repayment plan (or amortisation schedule) is typically prepared and annexed as a schedule to the main loan agreement, rather than being a separate standalone document. The loan agreement sets out the general terms and conditions — parties, purpose, interest rate, default, security, governing law — while the repayment schedule provides the detailed payment calendar. Both documents together form the complete loan contract. However, for private lending arrangements between individuals — where the parties may not use a formal bank-style loan agreement — the repayment plan is sometimes the primary document evidencing the debt, particularly for smaller loans where a full loan agreement may not have been prepared. In this case, the repayment plan signed by the borrower constitutes written evidence of the debt for the purposes of the Limitation Law (the 6-year limitation period for simple contract debts runs from the date any instalment becomes overdue, not from the date of the original agreement — each missed instalment creates a fresh cause of action). For loans subject to the Stamp Duties Act (Cap S8, LFN 2004), a standalone repayment plan may need to be stamped separately if it is to be tendered as evidence in court proceedings.
An employer in Nigeria can deduct loan repayments from an employee's salary, subject to specific legal requirements under the Labour Act (Cap L1, LFN 2004). Section 18 of the Labour Act provides that deductions from wages are only lawful where: (a) they are expressly authorised by the employee in writing; or (b) they are required by or under any written law or court order; or (c) they are deductions for accommodation or meals provided by the employer at the employee's request. A deduction for loan repayment must therefore be authorised by the employee in writing — typically by the employee signing a Salary Deduction Authorisation form as part of the employee loan documentation. The authorisation should specify the monthly instalment amount, the account into which it is deducted, and the duration of the deductions. The employer should retain a copy of the signed repayment plan and the deduction authorisation as part of the employee's personnel file. The National Industrial Court of Nigeria (NICN), which has exclusive jurisdiction over employment matters under the Constitution (Third Alteration) Act 2010, has held that deductions made without written authorisation constitute unlawful deductions and must be refunded to the employee. For deductions above 50% of net salary, the NICN has also applied the principle that excessive deductions may effectively deprive the employee of their means of subsistence, which could constitute a breach of the employment contract.
A moratorium or grace period is a defined period at the beginning (or sometimes middle) of a loan term during which the borrower is not required to make principal repayments — only interest payments (or sometimes even interest is deferred and capitalised). Moratoriums are common in Nigerian project finance, agricultural finance (under CBN's Anchor Borrowers Programme), and development finance facilities from the Bank of Industry (BOI) and the Development Bank of Nigeria (DBN), where the funded project needs time to generate revenue before principal repayments can begin. During the moratorium period, the outstanding principal balance does not reduce — only interest accrues. Where interest is paid during the moratorium, the repayment plan will show interest-only instalments for the moratorium period, followed by full principal-and-interest instalments for the remainder of the loan tenor. Where interest is also deferred and capitalised, the outstanding principal balance at the end of the moratorium period will be higher than the original disbursed amount (original principal plus capitalised interest), and the repayment plan must be recalculated on the basis of the higher capitalised balance. The CBN's Prudential Guidelines require banks to clearly disclose the total cost of capitalised interest moratorium structures in the loan offer letter provided to the borrower before disbursement.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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