Reviews

Insufficient cash flow typically makes people seek funds wherever they can. Because of this, many people would prefer to get a loan from family and friends or peer-to-peer lending. However, not everyone gets the sufficient funds they need at some point. And this is where the relevance of loan companies cannot be overstated. This is because they have a track record of providing different forms of loans for people’s unique needs.

As you read along you’ll learn more about loan companies in Ghana, who they are and so on.

What is a loan company?

A loan company is a financial institution that provides finance or cash flow for individuals or companies as loans. These loans could be personal, business, mobile money, travel loans and other loan types. And these financial institutions and the borrowers agree that these loans will be repaid with interest after a period. However, the agreement usually depends on the terms and conditions of the loans.

The nature of loan companies is alike, but their business activities are entirely different from each other. Besides that, their funding requirements vary significantly.

What are the loan companies in Ghana

Loan companies grant loan requests of individuals and businesses. Their relevance in Ghana cannot be overstated. Ultimately, from ensuring that individuals and businesses do not lack cash flow.

The following are the loan companies in Ghana:

	Loan Company	Address	Phone Number	Email	Website
1	ABii National Savings and Loans Ltd	Priority House, Avenor Junction (Near Joy FM), P. O. Box CT10067 , Cantonments , Accra	233-302-241050, 233-302-241050	info@abiinational.net	http://www.abiinational.net
2	Adehyeman Savings and Loans Company Ltd	No:C1/7, Faanofa Street, Kokomlemle, (Near Avenor Traffic Light), P.O. Box GP 13249, Accra-Ghana	233-302-252071, 233 302-289670,  233-302-208142, 233-302-244075	info@adehyeman.com	http://www.adehyeman.com
3	Advans Ghana Savings and Loans Ltd	Ground floor Oxford Cinema building (Accra New Town), P. O. Box AN 11426, Accra – North	233-307 084522		http://www.advansghana.com
4	Asa Savings and Loans Company Limited	Odokor- Mallam Highway, P. O. Box MP 1834, Mamprobi Accra	233-302-328405,  233-545304767	info@asasavingsandloans.com	http://www.asasavingandloans.com
5	Assurance Savings and Loans Ltd	1st Floor, Gina Villa, Achimota School, GIMPA Road, P.O. Box KIA 16192, Accra	233-302 433931, 233-303977340, 233-208178048	info@assurancesavingsandloans.com	http://www.assurancesavingsandloans.com
6	Bayport Savings and Loans Plc	71 Osu Badu Street, Airport West, Accra, PMB 248, Accra North	233-302-745454, 233-302-910778, Toll free : +233-800-10016 (Vodafone only)		http://www.bayportghana.com
7	Best Point Savings and Loans Ltd	Old Peace Fm Building, Mile 7, P. O. Box ct 10191, Cantonments, Accra.	233-303 932990 – 4	info@bestpointgh.com	http://www.bestpointgh.com
8	Bond Savings and Loans Ltd	Bond House, Meridian Road, P.O Box CO PMB 95, Tema	233-303-214444, 233-544314705,  233-303-304332	info@bond.com.gh	http://www.bond.com.gh
9	Direct Savings and Loans Limited	No. 42A, Asofoanye A. Opeku Avenue, North Dzorwulu, off the Fiesta Royal Hotel and GIMPA Road, P.O. Box CT 8360, Cantonments, Accra	233-303-969550, 233-303-969555	info@directgh.com	http://www.directgh.com
10	Equity Savings and Loans Ltd.	No. 16 Maseru Avenue, East Legon, P.O. Box CT 6382, Cantonments, Accra	233-302-541449,  233-302-541452,  233-302-544528		http://www.equitygh.com
11	Golden Link Savings & Loans Ltd	2 North Street, Tesano, P.O. Box 14117, Accra	233-302-223826, 233-302-223833,  233-302-223951	info@goldenlinkghana.com	http://www.goldenlinkghana.com
12	Golden Pride Savings and Loans Ltd	House No. B3/131, Samora Machel Rd., Asylum Down, Accra, P.O. Box TU 66, Accra	233-032 286050	info@goldenpride.com.gh	http://www.goldenpride.com.gh
13	Izwe Savings and Loans PLC	Maestro Plaza, Kotobabi High Street, Private Mail Bag GP 158, Accra	233- 302 251042	info@izweghana.com	http://www.izweghana.com
14	Jins Savings and Loans Ltd.	53 Owoo Street, West Legon, Accra, P.O. Box 4566, Dome Kwabenya, Accra	233-302 419422, 233-302 419424	info@jinssavingsandloans.com	http://www.jinssavingsandloans.com
15	Letshego Savings and Loans Plc	4th Floor Cocoshe House, Off Augusto Neto Road, Airport City, P.O. Box AN 7128, Adabraka , Accra	233-302-208340, 233-302-208342,  233-302-208333	info@afb.com.gh	http://www.afb.com.gh
16	Multi Credit Savings & Loans Co. Ltd.	Trust House, Bantama High Street, P.O. Box 1920, Kumasi – Ashanti	233-322-37418, 233-322- 37419	info@mcslghana.com	http://www.mcslghana.com
17	Opportunity International Savings and Loans Co. Ltd	No: D765/3, Kwame Nkrumah Avenue, P. O. Box JT 323, James Town, Accra	233-302 610000, 233-302 676661	info@opportunityghana.com	http://www.opportunityghana.com
18	Pacific Savings & Loans Co. Ltd.	Plot Q.T.B, Adum, P.O. Box KS 1922, Kumasi – Ashanti	233 -3220-41051, 233-3220-41050,  233-3220-41054		http://www.pacificsavingsandloansgh.com
19	Pan – African Savings and Loans Company Limited	No. 19 Mayor Road, Ridge West, PMB CT 127, Cantonments, Accra	233-302-782751/7	info@panafricansl.com	http://www.panafricansl.com

20	Progress Savings and Loans Limited	No. 7 Nii Yemoh Avenue OIC Road 3rd Floor Zion House, Shiashie, East Legon, Accra, P. O. Box ST 237, Accra	233-302 514000, 233-302 509013, 233-501 523473	info@progessghana.com	http://www.progressghana.com
21	Services Integrity Savings and Loans Ltd.	Block 1, Labadi VillasBusiness Centre, Giffard Road, Burma Camp, Accra, PMB Burma Camp Post Office, Accra	233-544-322102
22	SIC Life Savings and Loans Ltd.	Section 28, Block 15, Tudu, Accra, P. O. Box KN 4768 Kaneshie Accra, Adabraka – Accra	233-577 737826, 233-556 590241	enquiries@siclifesl.com.gh	http://www.siclifesl.com.gh
23	Sinapi Aba Savings and Loans Company Ltd	22A Ellis Avenue, P. O. Box 4911, Nhyiaso, Kumasi	233-302-2030112	infodesk@sinapiaba.com	http://www.sinapiaba.com
24	The Seed Funds Savings and Loans Ltd	Seed Funds Savings and Loans Ltd, Plot 32, Sixth Circular Road, P.O. Box CT 11172, Cantonments – Accra	233-561 111997, 233-561 111998	info@theseedfunds.com	http://www.theseedfunds.com
25	Utrak Savings and Loans Ltd	Adum Kumasi, P. O. Box UP 1011, Kumasi	233-302 255476	urak2000@yahoo.com

Do loan companies check my bank account?

Most times loan companies can check your bank account. They will check your credit score or your credit history. They do this to know your financial behaviour for some time. Besides that, it helps them know whether it’d be cool for them to give you the loan you need. This is because no lender would give a loan to a borrower who doesn’t have a way to repay the loan. 

Therefore, lenders typically look at your bank statements before they issue you a loan. This is because the statements summarize and verify your income. Besides that, your bank statement also shows your lender how much money comes into your account. And also, of course, how much money is taken out of your account.

How to get instant loans in Ghana

Having little or no money to meet your pressing needs is definitely one of the worst situations you may find yourself in. However, you may quick loan options available in Ghana. Here is how to obtain an instant loan in Ghana:

1. Download and install the app.
2. Sign-up to open an account or login if you are already signed-up
3. Follow the prompts.
4. After a successful evaluation, you will be granted your loan request.

What are the basic functions of loan companies?

Loan companies surely play significant roles in the financial market. But there are basic functions they perform.

The following are the basic functions of loan companies:

1. Offer unsecured loans (loans without collateral)

2. They offer secured loans

3. Lend to purchase products

4. They offer business loans.

Conclusion

Loans have saved individuals and businesses in so many ways. Individuals who encounter unforeseen circumstances go for emergency loans. Whereas business owners go for start-up or business in order to establish or grow their existing businesses, respectively.

However, what matters most is your compliance to the agreements of the loans. Generally prompt repayments of loans by borrowers earns them higher chances of qualifying for a loan in the future. Besides that, it ensures you don’t get blacklisted for not repaying your loans. Moreso, it reduces hard credit checks on your credit history from credit bureaus.

Insufficient capital to start-up a business has been one of the significant challenges new businesses face. Earlier, business start-up loans used to be very difficult to access most times. And this is why the Ghanaian government has taken it up as a responsibility recently. 

Fast-growth companies can gain up to tens of millions of cedis that they can invest, network and grow their company. The meaning of business start-up loans, how to apply, features and many more are all-inclusive in this article.

What is a business start-up loan?

The initial growth of a new small business can not be possible without the support of a capital. 

A business startup loan is the type of loan that helps start-ups to purchase equipment, machinery, inventory, supplies, furniture and many more things for the business. However, business startup loans can either be short term or medium-term loans.

What is a short-term business start-up loan?

The short-term business start-up loan lasts for twelve (12) months and is for financing the daily working capital requirements of the customers.

What is a medium-term business start-up loan?

The period for medium-term loans ranges from twelve (12) months up to thirty-six (36) months.. This enables customers to meet their capital expenditure (capex) requirements, with repayments being made on a monthly basis.

Note: The Interest rates on both the short-term loan and the medium term loan in Ghana depend on the risk profile of the applicant.

What are the requirements for a business start-up loan?

There are requirements you have to make available for you to get a business start-up loan. Although, they might not be all-inclusive because these requirements vary from one financial institution to the other.

They are:

1. Your business registration documents
2. Six months’ statements from one or two banks
3. Financial statements and cash flows for 3 years
4. The valid collaterals include; landed property, bank guarantee from a reputable bank, cash or investments (treasury bills)
5. Credit bureau report that is favourable
6. You may need to meet other requirements subject to specific borrower conditions.

Who is eligible for the business start-up loan?

All Ghannian entrepreneurs are eligible to finance business with start-up loans.

How to apply for business startup loans

Having known the eligibility for business start-up loans.

The  step-by-step method of application will help you go along way in successfully applying for the loan:

1. Choose your preferred financial institution for the loan
2. Download the application form or go to any of their office branches in Ghana.
3. Complete the field
4. Upload or attach documents
5. Submit and wait for feedback from the financial institution.

What is the interest rate for business start-up loans?

Before you apply for a business start-up loan to birth and grow that business. It is advisable to know the interest rate attached. This is because the interest  rate for startup loans is very competitive. Because of this, there is no specific interest rate for a start-up loan. It varies from one lender to the other.

What are the features of business start-up loans?

Are you entrepreneur inclined? Or you have some business idea you want to develop or grow? You need finance to birth and grow the business. But There is a need for you to know the features of business start-up loans. Below are some features of business start up loan:

1. It has collateral requirement
2. The loan can be up to GHC100,000, GHC500,000 or even more depending on the lender
3. It requires guarantee from a friend or relative
4. Loan turnaround time of 48 hours.

Loan duration for business start-up loans

Knowledge of how long a business start-up loan can run helps in the loan’s repayment, which range from 6 to 12 months, 2 to 5 years or even more. So, it depends on the repayment terms that the lender and borrower have.

What are the government loans for businesses in Ghana? 

The government of Ghana established some loan initiatives for the businesses of Ghanians. This is in order to help them establish and grow their businesses.

The following are government loans for businesses in Ghana:

1. CAP-BuSS Initiative

This scheme bears The Corona Virus Alleviation Programme – Business Support Scheme (CAP-BuSS). The Ghanaian government established it in order to help micro, small and medium-sized enterprises (MSMEs) in Ghana. 

Also through this scheme, the government through National Board for Small-Scale Industries (NBSSI) collaborated with financial institutions to roll out a soft loan scheme with a one-year moratorium and two-year repayment period for MSMEs. NBSSI also offers services and different loans to support businesses.

Consequently to provide emergency relief funds for MSMEs and entrepreneurs in Ghana. Besides that, they aim to establish a comprehensive and financially sustainable emergency relief fund package for MSMEs.

2. Covid-19 Alleviation and Revitalization of Enterprises Support (CARES) programme

The Ghanaian government established this programme to help businesses bounce back from the adverse effects of Covid-19 in Ghana.

3. MASLOC Ghana

Microfinance and Small Loans Centre (MASLOC) is a microfinance top body in Ghana. It has the responsibility to implement the Government of Ghana’s (GoG) microfinance programmes targeted at reducing poverty. Consequently, start-ups and small businesses can have micro and small loans through MASLOC. And this comes with easy and accessible microcredit and small loans. In order to grow and expand their businesses in order to enhance job and wealth creation.

4. NBSSI Ghana

They are a non-profit public sector organisation that is under the Ministry of Trade, Industry and Presidential Special Initiatives. 

The Government believed in the sector’s potential to contribute immensely in reducing the high unemployment rate in Ghana. Besides that, they have to develop the human resource and the structures. And also to give MSEs the access to high-quality business development services which promote their growth and competitiveness.

What are loans for small scale business in Ghana?

There are some loan options that small scale businesses in Ghana can try out.

The following are the loan types for small scale businesses:

1. Capital Markets and Equity Loans (Facilities)

2. Personal Savings as Start-Up Loans

3. Bank Loans (Debts)

4. Home Mortgage Finance and Loans

5. Hire Purchase Finance and Loans

6. Leasing Finance and Loans

7. Informal and Formal Supplier Credit Loans

What are the pros of a business start up loan?

Although there are benefits of receiving a startup business loan in Ghana. There are also some disadvantages to consider when applying for business start-up loans. Always remember that your business is new. It takes time to determine what your business needs are.

The pros of startup business loans include the following:

1. The start-up business loan helps to separate your business finances from your personal finance.
2. It helps you to have enough funds to start up your business. You may need more than you can borrow from friends, savings, family, or credit cards to grow the business.
3. The business start-up loan helps you to keep ownership of your business. Besides that, it helps start-up businesses shun investors who might want to control your business. 

What are the cons of business startup loans?

Business start-up loans have downsides too. But the advantages can overshadow the downsides. 

The cons of business start-up loans include:

1. It can restrict cash flow in your business when you have monthly payment obligations
2. Your personal credit score may be at risk  if the business defaults to make the loan payments
3. You might not know how to use the loan yet as a new business owner. 

Conclusion

There’s no doubt that business start-up loans encourage the dreams of starting a business. This is because it eliminates the fear that financial problems throw at business owners. Therefore, it enables them to hold their heads high and face whatever situation could come their way (financially) as they enter into the market.

Rightly said, business startup loans help provide the capital for the purchase of equipment, inventory and payment of workers’ salaries. The business start-up loans are the hope for the new businesses. And for this fact, new businesses should not worry about finances anymore.

You can never undermine the necessity of owning a car these days. Therefore, people go for Car loans in Ghana. They say, “If wishes were horses, beggars would ride”. This is absolutely the case scenario of the modern day, where most people want to have their own cars. But the case is not the same for everyone because some people don’t have money to get their own cars. Therefore, it is nearly impossible for so many people to get their own cars. 

However, lack of money makes people get loans such as; travel, mortgage, quick, instant, consolidation, mobile money loans etc. Buying a reliable second-hand car is not too easy in Ghana. But there are ways you can buy one beforehand and later pay back through car loans in Ghana.

 As you read the rest of this article, you’ll see details on how to get the car loans and the financial institutions that offer them here in Ghana. 

What are the things I should know about car loans in Ghana?

Car loan is a type of loan or financial aid for majorly salaried individuals, who intend to own a car. There are also car loans for government workers in Ghana. An insufficient fund for a particular car could be a limitation.

Vehicle and Asset Finance (VAF) is a medium-term facility for salaried and non-salaried customers. They help individuals to purchase assets, such as vehicles of various types and power generators.

What are the requirements for car loans in Ghana?

Before you apply for any loan, car loan inclusive. The first thing that could come to your mind is what you need for the loan. The knowledge of the basic requirement is the first step towards standing a chance of getting the car loan.

The following are the requirements for car loans in Ghana:

1. Applicants must be employees who earn a salary worker
2. Maximum amount of GHC150,000.00
3. Maximum facility tenor is 48 months
4. Vehicle must be brand new
5. A complete loan application form
6. Signed customer’s request letter
7. Copies of most recent pay slips of 6 months
8. National identification
9. One passport photograph.

Note: To apply for a First Bank car loan, you can download the first bank car loan form. Fill the form correctly, upload the documents they require, and submit at the nearest First Bank branch.

What is the minimum amount for Car loans in Ghana

It’s important to know how much you can borrow for a car loan in Ghana. By knowing the minimum amount, you’ll be able to ration the fund efficiently. For Car loans in Ghana, there is no actual minimum loan amount. Probably you can borrow all you need to buy the car.

Meanwhile, some savings and loan companies have limitations to the maximum amount you can borrow. This is regarding your salary scale or credit score. But there is no limitation to the minimum amount.

If you want to buy a car on credit in Ghana with a loan. The following are what you should know about the process:

• Approach a credible financial institution

There are credible financial institutions that offer affordable car loans. Once you apply for the loan, the banks will assess your eligibility and they will decide on whether you qualify for the loan you are asking for.

• Some car dealers will allow you to buy a car now and pay later in Ghana

They will require you to have a minimum percentage of the total price of the car.

For instance, a car dealer may decide that you should pay 50% of the total price of the car first. So if the car you want to buy costs 1 million cedis, you will pay five hundred thousand cedis at the time of purchase.

• You need a written agreement on the time limit for the repayment

Some dealers give the buyer an option of negotiating the time that is convenient for them. While some others will fix a time of repayment for the buyer. Go for the dealer whose terms you are more comfortable with.

Where can I get a car loan in Ghana?

There are some financial institutions and traditional banks that offer car loans in Ghana. They include:

1. Universal microfinance
2. Izwe savings and loan Kotobabi
3. Advance Ghana saving and loan, Newtown branch 
4. Societe Generale 
5. Stanbic Bank Ghana 
6. First bank Ghana 
7. Republic bank Ghana 
8. Calbank 
9. Microfinance and small loan centre (MASLOC)
10. AIDEZ small project international and so on.

What are the things I should expect for car loans in Ghana

Before applying, you ought to be aware of the car loans you are applying for. This allows you to know what you ought to expect from the loan company. Though this varies regarding loan companies but applies to most of them.

The following are the things to expect:

1. GHC100 as the minimum overdraft limit
2. There is no limit to maximum overdraft
3. Monthly repayment of used limit or 30 days of a clean-up cycle
4. 60% advance of your disposable net monthly salary
5. Life insurance credit premium of 0.84% on approved limit against permanent disability and death
6. Interest depends on overdraft used each month
7. Facility fee of 2% charged on agreed limit and at each renewal.

How can I get a Stanbic car loan?

Stanbic Bank Ghana may offer you a car loan just because you already have an account with them or have worked for them. You can follow the steps below for the application.

1. Work for Stanbic profiled organization
2. You must earn a minimum salary of GHS400 per month
3. Minimum salaried account relationship of:

• One month–Workplace Banking Scheme companies or organizations
• Three months–non-Workplace Banking Scheme companies/organizations
• Customers with salaried Stanbic Current Account.

You need to fill in a Personal Salary Advance application form and attach the documents below:

• Previous statement of account
• Pay slips from the past three months
• They will approve overdrafts subject to a positive reference from the credit bureau.

Calbank Auto Loans

Calbank Auto Loans makes car loans available to individuals, consultants. Besides that, workers who earn salary with recognized working institutions can also get a car for personal or company use.

The following are the features of Calbank Auto Loans:

1. Loan Repayment: Annuity payment Method
2. Duration: 60 months or lesser.
3. Personal Guarantee of applicant
4. Provident Fund, if any.
5. Vehicle registration and insurance in the joint names of CalBank and client.
6. Debt Burden: Not over 45% of income.
7. Pricing: CalBank Base Rate + Agreed Margin.
8. Arrangement and Processing fees: 3%.
9. Maximum Loan: The Bank gives up to 80% of the worth of the vehicle.
10. Readily available credit timely.
11. Flexible terms of repayment.
12. A team of dedicated account managers shall give prompt advisory services.

How can I be eligible for Calbank loan?

Before you can get a car loan from Calbank, there are certain requirements you must meet. They are:

1. Minimum Salary: GHS 500.00.
2. Age: 18 -53 years.
3. Employment Records: minimum of 6 months or at the discretion of the credit manager.
4. Account History: Bank Statement of six months from clients with account relationships with other Banks.

Note: They typically notify clients on monthly loan repayment via our CalBank Alert.

What are the benefits of car loans in Ghana?

The benefits of applying for car loans can be astounding. You may wonder what benefits you could get if you get a car loan.

The following are some benefits of car loans; they include:

1. Suitable terms
2. Self-service
3. Currency Options
4. Flexible repayment duration
5. Competitive interest rate.

Conclusion

Your dream of having your own car could become a reality when you make the right move. And this right move ultimately depends on the choice of the car loan provider in Ghana. However, ensure you stay clear of loan sharks who could promise you too-good-to-be-true sumptuous deals. And this could leave you in regret for accepting their offer. Besides that, if a lender would need a collateral for you to secure the car loan. Ensure that it’s what you could afford to offer as a collateral.

Just as life is unpredictable, that’s also how unforeseen circumstances that require funds can also come our way. And some of these unforeseen circumstances could come as car repair, wedding, or even a medical bill. Emergency loans in Ghana enable some financial organizations to help Ghanaians with funds for such emergencies.

Other types of loans such as guarantor, SME, or even student loans might not be enough for you. However, an emergency cash loan can equally help customers deal with their short-term cash problems. Reading further, you’ll know more about emergency loans in Ghana and how you can get one.

What is an Emergency Loan?

Emergency loan is an unsecured loan you can take out to cover unexpected expenses. And the amount you can borrow varies depending on how much you need to cover your expenses. Most of the time, you can get the emergency fund quickly, with disbursement within a day or two after your lender approves it. Besides that, some lenders can even transfer you the emergency loan on the very day you apply. This is also how you can access quick loans and mobile money loans. Moreso, they do not require collateral because most emergency loans are unsecure. They sometimes call them quick loans.

But some lenders offer secured personal loans that require borrowers to put up assets to borrow money. Such assets include homes, cars, savings accounts, funds and other assets. Also, you can access emergency loans through credit card advances and payday loans as they have their own advantage.

What are types of Emergency Loans in Ghana?

Emergency loans come in different forms here in Ghana. They include:

1. Personal loans

Some lenders offer secured personal loans, which usually require collateral. And this collateral can come as cars, investments, real estate, etc. However, there are some personal loans you can get without collateral.

2. Credit card advances

The interest rates on credit card cash advances are higher than APR on regular purchases, as well as additional fees. Interest accrues when you take money out. Normally there’s nothing like a grace period. This, however, implies that you’ll pay higher interest rates when you get an emergency loan with the credit card advances.

Learn how to get a credit card in Ghana

3. Payday loans

A payday loan is a small, high-interest loan that rarely requires credit checks. But it usually has a fast turnaround time and requires that you pay it back by your next paycheck. 

4. Title loans

Title loans are loans taken out against the title to a vehicle, like your car, in exchange for cash. And if you can’t repay the loan, the lender can keep your car.

Uses of emergency loans in Ghana?

In Ghana you can use emergency loans for various purposes. They are:

• You can use emergency loans for utilities. With the emergency loan, you can pay utility bills on time. Thereby, enabling you to maximize the use of your electrical appliances. Staying on top of your bills will prevent a drop in credit scores and keep you from falling behind on expenses.
• An emergency loan can help you cover unexpected medical expenses or expenditures.
• You may need an emergency loan if a loved one passed away and did not have life insurance.
• Often an emergency loan may be the only way to get by until you get paid again if you cannot pay your rent or mortgage.

It’s important to check the terms and limitations of your potential lender before applying for a personal loan. This is because some lenders prohibit the use of emergency loans to pay for post-secondary education in Ghana.

How do I choose an Emergency Loan in Ghana?

When exploring various emergency loan lenders. It is essential to avoid picking the first one that appears when making your research. There is a need to analyze various available options for the best lender by considering:

1. Financing time

Normally, one to two days is the perfect time frame. While some lenders take several days to deposit funds, other lenders can do so the same day.

2. Fees

Find out the exact costs that each lender charges by reviewing the fine print. For instance, origination fees and late payment penalties are common emergency loan costs.

3. Requirements for credit scores

Your credit score affects your interest rate and how much you can borrow from the lender. Most lenders have a credit score threshold, and you’ll need to meet that in order to apply for a loan.

4. Interest rates

You may qualify for the lowest interest rate if you have excellent credit. However, know what lenders charge for credit that is less than perfect. Then compare lenders accordingly for the loan you need.

5. Terms of repayment

Do you want to pay your loan back sooner with larger monthly payments? Or do you need smaller payments so you can pay it off? Emergency loan terms differ by lender, although some require repayment of at least a minimum amount each month. Therefore, if you borrow GH₵500, you could have a loan for up to a few months.

Where can I access an Emergency Loan?

We can arrange an emergency loan through a credit card store or a payday lending company. Also, the best option for funding a personal loan is a traditional unsecured loan. Especially through a credit union, a bank or online lender.

1. Credit Unions

Credit unions offer emergency loans to members who have credit union accounts instead of bank accounts. They are more friendly toward borrowers with fair credit and poor credit.

You may also want to consider other options because some credit unions lend only to their members. Or to those that have been members for a certain amount of time. They also have some criteria you must meet to qualify for their loans. If you don’t meet their criteria or if you seek a higher amount of money. Then you can consider other options for funds. 

2. Banks

Brick and mortar institutions like banks may assist you in getting a personal loan. Especially while you have a bank account with them.

Banks usually have different processing methods when compared to other lenders. Most banks, for instance, have higher credit scores or income requirements before you qualify for a personal loan. It could take longer than you think to get funds deposited into your account, so you check the time it typically takes before applying.

3. Online Lenders

Several online lenders offer a wide variety of emergency loans, and most don’t require members with a current account to apply. Many offer the option of pre-qualification so that you can see if you’re eligible for a loan before you actually apply. This way, you can avoid a hard credit check that may hurt your credit.

Many traditional banks also offer online applications and processing if you do not feel comfortable with an online lender. All you need to do is to make sure that it’s a reputable online lender with a secure website and a strong offering.

Note: Each lender has different standards and requirements. Therefore, there is a need to review as many as you can before applying for an emergency loan.

What are the alternatives to Emergency loans in Ghana?

There are other options besides emergency loans for borrowing money fast. You may consider these before applying for an emergency loan:

• Getting rid of your high-interest credit cards.

Merging your credit cards, or applying for a zero percent balance transfer credit card.

• Repaying a medical bill.

Talk to the hospital about setting up a repayment plan that works for you. Some hospitals have interest-free repayment plans, so you can schedule several hospitals to settle your bill if you will pay a portion of it upfront. By doing this, they will collect payments and keep the rest.

• Accessing your home’s equity through a home loan.

They secured these with collateral in your home. HELOC interest rates are typically lower than unsecured loans, while repayment terms are usually long enough to allow you to afford low monthly payments.

Conclusion 

When you’re in dire need of funds, you’d normally need your friends and family to help you out. But when it becomes impossible to access the complete funds necessary to see you through your financial debacle from them. Getting a loan becomes the ultimate choice you must make. And speaking of ultimate choice, emergency loan literally tops the chart of the essential loan offers to go for.

The uncertainties of life have taught many people lessons they’ll never forget in their lifetime. Consequently, lenders have created emergency loans to always help people out of some uncertainties that’ll require financial aid. However, always remember to repay any loan you get so that your lender will grant you another loan in the future.

People who are not employed also have financial obligations they must meet. Some people opt to take personal, business, debt consolidation or travel loans, etc. Unemployment typically makes them face financial difficulties regularly. Besides that, it could make people have low self-esteem, which sometimes could lead to depression. Moreso, unemployment could lead people to commit societal vices to access funds. Because of the mentioned problems unemployment could cause the populace. There is indeed a way out for that in Ghana; ‘Loans for unemployed in Ghana.’

As you read along this article, you’ll know the requirements for the loans, how to apply, interest rates and so on.

About loans for unemployed in Ghana

They designed loans for the unemployed to give people who are not employed funds to carry out their financial obligations. Before lenders give out the loans for the unemployed. They must make sure the borrowers have a way to make repayments.

Because of unemployment, the unemployed people usually have difficulty affording their basic needs. And some of these basic needs could sometimes require a quick loan. But for them to meet their basic needs, they need money or an adequate source of income. However, there could also be payments like education fees, electricity bills, telephone bills and so on to make. Regarding all these financial obligations, money to meet all those expenses is essential. Therefore, getting loans for the unemployed in Ghana is a good option to take.

Loans for the unemployed are usually short-term loans. This is so because the lenders want the borrowers to pay back the loans with no difficulty.

What are the features of loans for the unemployed in Ghana?

Loans for unemployed in Ghana have features of which are among:

1. They are short-term loans
2. The loans give you small funds
3. Loans for the unemployed do not require collaterals or credit checks
4. Sometimes they come with high interest rates
5. You must pay back the loan fully to avoid penalty
6. An individual person with inadequate credit issues like; defaults, missed or late payments, bankruptcy and so on can also take loans for the unemployed.

What are the requirements for loans for the unemployed in Ghana?

It is rare if not impossible to see a financial institution that gives loans without requirements from the borrowers. There are requirements to meet for any form of loan. Loans for unemployed have requirements which could differ from one institution to the other.

The following are the requirements for loans for the unemployed in Ghana:

1. The applicant must be in between 21 to 60 years old
2. You must be a Ghanaian citizen or resident in Ghana (legally)
3. Must possess proof of address.
4. Provide utility bill less than three months old
5. Proofs of identification such as passport, driver’s license, Voter’s card and so on.

How can I apply for loans for the unemployed?

Getting a loan as an unemployed was difficult. But today, you can get loans for unemployed by:

1. Visiting the office of a financial institution (lender) that offers loans for the unemployed
2. Choosing an online lender and visiting their website with your smartphone, tablet or personal computer. Then request loans for the unemployed after filling an online application form. Fill in some details like; your name, bank account, address, email address etc and then submit.

What are the things lenders test in my loan application?

Lenders test some factors while evaluating your loan. This is because they want to be sure that you will repay the loan after giving it to you.

The following are what lenders test in your loan application:

1. They know you do not have a job at the moment. Therefore, sometimes they might want to know the income of your closest relation (maybe your spouse).
2. The capital money or gains from your investments may be in real estate
3. Your retirement benefits
4. They test your debt-to-income ratio
5. They put your credit score into consideration

How fast can I get the loans for the unemployed?

When to expect the disbursal of a loan is paramount, especially when you need a loan. This is because you have needs that require urgent attention. However, you get loans for the unemployed once your application is successful.

How important is my credit score if I want to get loans for the unemployed?

Your credit score is very important for you to get loans for the unemployed. Your credit score becomes very important when you are unemployed. And chances of getting loans for the unemployed when you have an excellent credit score are higher. There are lenders in Ghana who offer loans even if you have a low credit score.

However, in some of these cases, the minimum credit score you may have to maintain is around 600. The credit score requirement will vary from one lender to the other.

What are the cons of borrowing while unemployed?

Loans naturally come with risks to both the lender and the borrower. These risks emanate from the inability to make repayment of the loans.

The following are the risks you are about to take while unemployed:

1. Without a job, you risk missing payments. This can harm your credit score and can worsen your already tough financial situation.
2. Some loans for the unemployed come with high interest rates.
3. You will get a shorter repayment term if the lender is not likely to believe you will become financially buoyant in a short while.

Financial institutions that can offer loans for the unemployed in Ghana

You might not get the offer of loans for the unemployed in all financial institutions in Ghana. However, there are some financial institutions in Ghana that can offer these loans to Ghanaians.

The following are the financial institutions that can offer loans for the unemployed in Ghana:

1. GCB bank
2. STANBIC BANK
3. FIDELITY BANK
4. FIRST BANK
5. FIDO MONEY LENDING LIMITED
6. FAST-TRACK MICROFINANCE BANK

Conclusion

Loans for the unemployed help people without jobs to meet their financial obligations. And because of this, they can now address their many needs. Moreso, the unemployed can now cater for unforeseen circumstances because they have the funds to do it. However, the unemployed should beware of the risks that come with loans. Therefore, they should ensure to pay back the loans after getting it. Ultimately, borrowers should beware of loan sharks and get loans from credible lenders.

In the world today, getting a home you desire has become easier as they come. You can easily request a home loan or mortgage loan from the comfort of your home. This is also the same way you could request a quick loan or business loan from your home. In Accra and other parts of Ghana, owning a home is no longer as difficult as it used to be. Ghana Home Loans help Ghanaians to get their dream homes. What you should know about Ghana Home Loans, how to apply, how they operate, are all-inclusive in this article.

About Ghana Home Loans

Ghana Home Loans (GHL) is a provider of mortgages and other retail and corporate banking services in Ghana. They have been operating in Ghana for over 20 years. During these years, they have gained an excellent reputation in the region. And this is because of their exemplary services to customers. They help their clients to grow their businesses by offering them loans with reasonable interests. The consistency in their operation is because of firm support from other financial institutions within and outside Ghana.

What are the requirements for Ghana Home Loans?

Most financial institutions would need you to meet some requirements before you can apply for their loans.

The following are the requirements they would need you to meet:

1. Proof of identification
2. Collateral
3. You must be an adult, etc.

Note: There are other requirements, but to get them. You can visit them at their head office or get to them through their contact details below (in this article).

How do Ghana Home Loans operate?

The following information about how they operate in Ghana. Also, it will help you see more clearly the services they offer and how they do.

Ghana Home Loans Shareholders

Ghana Home Loans works closely with other organisations for financial aid. This is to provide excellent services to their clients. And most of these organisations are financial institutions, while others are not. 

Who are the partners of Ghana Home Loans?

Ghana Home Loans have companies they partner with to ensure that they serve their customers excellently.

The following are the companies they partner with:

1. Netherlands Development Finance Company (FMO)
2. The Abraaj group
3. Shelter Afrique
4. Overseas Private Investment Corporation (OPIC)
5. Standard Bank
6. International Finance Corporation (IFC)
7. Bank for Investment and Development of Cambodia (BID)
8. CAL Bank
9. Aureos capital
10. German Investment Corporation (KWFW DEG)
11. Ghana International Bank

What are the products that Ghana Home Loans offer?

Every financial institution usually has products they offer their customers. And Ghana Home Loans is not in exception. However, they offer three products to their customers.

The following are the products they offer:

1. Mortgage
2. Cooperate
3. Diaspora.

Under the mortgage loan category. The following are the loans you will find.

• 100% purchase mortgage
• Land purchase mortgage
• Home improvement mortgage
• Quick cash mortgage
• Mortgage refinance
• Home completion
• Save-to-own

What are the Ghana Home Loans careers?

Ghana Home Loans usually advertise vacant job positions whenever they have it. They help to create many job opportunities for Ghanaians. And this is to help curb unemployment in Ghana. However, they employ people who have the qualifications they require.

Where can I locate Ghana Home Loans office in Ghana?

Sometimes in the quest for one creditor the other. You could need further inquiries, then you have to reach out to your loan provider. For further inquiries, you can visit any of their head offices in Ghana.  Especially their office in 1 Kofi Annan Street, Airport Residential Area, Accra.

Where are the branches of Ghana Home Loans in Ghana?

In order to get to render their services more efficiently to Ghanaians. They have about four branches across Ghana. And these branches are additions to their headquarter office in Accra.

You can locate those branches in the following areas:

• Accra, A & C Mall

Physical Address: 14 Jungle Road East Legon, Accra.

•  Takoradi

Physical Address: Ground Floor, Far West Building, B Market Circle, Takoradi.

• Tema

Physical Address: Ground Floor, Lodestar Heights Community One, Tema.

• Kumasi

Physical Address: Ground Floor, Annex Building SSNIT Complex, Harper Road Adum, Kumasi.

What are the contact details of Ghana Home Loans?

There could be the need for more clarifications along the line. Especially regarding the loan you want to get, so that you make the choice that suits you best.

The following are the contact details of Ghana Home Loans:

1. Telephone numbers: 024 243 6777, 080 077 0522 or 0302 770 522
2. Email: info@ghlbank.com
3. Facebook: GHL Bank
4. Twitter: GHL Bank
5. Instagram: GHL Bank
6. LinkedIn: Ghana Home Loans

Conclusion

Getting a dream home with ease is what everyone would like. Besides that, knowing that a capable financial institution is at the helm of it makes it even more spicy. Ghana Home Loans work with other financial institutions within and outside of Ghana to ensure that they satisfy their customers. And this could be one reason to try them out. Moreso, Ghana Home Loans do not get only a new home for you. They also help renovate your home and boost your business. However, you must meet their requirements before they give you the loan. 

An insufficient amount of credit on your phone can always cut off your important phone conversation. Just like how you can’t fulfill financial obligations if you don’t have enough funds, which could ultimately make you seek a mortgage, business, travel, consolidation, mobile loans, etc. However, in Ghana, Vodafone provides a way out for customers who couldn’t complete their conversations because of insufficient airtime. Because of this, you can now complete the important conversation you are having, which could be a life-saving one. Vodafone SOS credit, amounts you can borrow, how to borrow credit on Vodafone in Ghana, etc are all-inclusive in this article.

What is Vodafone SOS credit?

Vodafone SOS credit is one of their packages that allows customers to access airtime on credit and repay later. Also, this package is exclusive to prepaid subscribers who are eligible for it. MTN also offers a replica of the Vodafone SOS credit in MTN Qwik loans services to their subscribers. Besides that, their customers can borrow the airtime even when they have little or no money in their balance.

What are the amounts of credit I can borrow from Vodafone?

When you run out of airtime and you want to borrow credit. There are various options that a telecommunication network will always pop up to you. Then you can now make a choice of the option you prefer.

The following are the amounts that Vodafone offers you:

1. GHs 1.50
2. GHs 2
3. They also offer GHs 5
4. GHs 10
5. GHs 20

Note: Vodafone will charge you 10% of the credit you request as a commission. Besides that, they will need you to have a minimum of GHs 1 or below to apply for the credit. And also, they’ll need you to repay it once you top up.

How can I borrow credit on Vodafone using SOS credit in Ghana?

Emergencies can occur, and because of this,, it’s really important to know how you can borrow credit or airtime as a Vodafone user. Consequently, this is the reason lenders offer emergency loans.

However, if your credit finishes in the middle of a discussion, Vodafone gives you the opportunity to continue that discussion. 

The following is how you can borrow airtime from Vodafone:

1. Open your phone’s dialer
2. Dial *505#
3. Select the amount you wish to borrow
4. The press 1 to confirm it

Note: Some SIM cards of Vodafone can automatically give you airtime you are eligible for once you dial *505#. This will deny you the options to choose from.

Am I eligible to borrow airtime on Vodafone?

Having seen how you can borrow airtime on Vodafone. Also, this offer doesn’t require collateral from customers. You might wonder if you are eligible to borrow airtime from Vodafone. However, you can be eligible to borrow the airtime with the following conditions:

1. Vodafone must have registered your line.
2. Your line must have been active for over 90 days.

How can I check Vodafone account balance?

Maybe, after completing your calls, you could want to know how much you still have on your balance. To know that, just dial *124#. They’ll send you your balance as a pop-up.

Conclusion

Vodafone has a cool call charge and internet speed. They let customers subscribe to a data package with airtime. You wouldn’t need the help of any loan officer. Besides that, they always have the best interest of customers in mind. They do this by offering pleasant options for them to borrow airtime to complete their conversations. However, all customers should know that they will repay the credit they borrowed once they top up. Ultimately, this will keep your credit score in excellent condition.

Credit cards help customers to use funds more securely. Getting a credit card in Ghana helps to curb the chances of loss of cash and encourages cashless financial transactions. Large hotels and restaurants in Ghana accept payments with credit cards. You can also buy bitcoins with credit cards. Although the credit cards that are rampant in Ghana are Visa card, Mastercard and American Express. However, the use of credit cards in Ghana is still at an infant stage. Especially when you compare it to advanced countries.

Meaning of credit card, how you can get it, etc are all-inclusive in this article.

What is a Credit card?

A credit card is a short-term financing option that a commercial bank issues. This allows holders to borrow money at the automated teller machine (ATM). Besides that, they can pay for goods and services at a point of sale device using the credit card. The issuing bank of the credit card determines the limit a customer can borrow. However, before they issue the credit card, they assess the customer’s creditworthiness. 

Tips on how to can get a credit card in Ghana

You can apply for a credit card from any of the issuing banks. But before you do that, ensure you meet the following criteria:

1. Have an active bank account with them

If you do not have a bank account with them, they would require you to open one. Thereafter, they would require you to run that account for at least a six-month’s period. With that, they can watch your earnings and cash flow more closely.

2. Have a good relationship with the bank

Most times, the banks in Ghana rely a lot on the relationship clients have with them. And this relationship comes in when they make certain decisions.

3. Good credit history

Your credit history is essential in determining whether they’ll grant your credit card request. Once you have a track record of repaying your loans or credits with their interests promptly. They will not relent to grant your credit card request.

4. Employment

Before banks issue credit cards, they usually look out for customers who are employed. They could require information about what you do if you are self-employed. Besides that, they could also want to know how you generate your income.

For salaried workers, they could require your employer to sign an undertaking. And your employer has to promise to always pay your salary through that bank.

What are the banks that issue Credit cards in Ghana?

The knowledge of the banks that issue credit cards in Ghana will enable you to know where to apply for one.

The following are the banks that issue credit card in Ghana:

1. Ecobank Ghana
2. Barclays Bank Ghana
3. Stanbic Bank Ghana

Note: Only the credit card Barclays Bank issue caters for the needs of low and middle-income earners.

Ecobank has the following two types of credit cards:

• Advantage Gold Credit Card
• Premier Platinum Credit Card

You can apply for the two cards on an Advantage Current Account or a Premier Current Account.

Stanbic Bank also offers credit cards for high-income earners, just like Ecobank. In order to know the card which is the best for you, know the requirements of each issuing bank. When you know the requirements, then measure them with your income level. Besides that, if you feel you need more clarification. You can visit any of their branches or call their customer service centers.

What are the advantages of getting a credit card?

Credit cards help customers to use funds more securely. Besides that, there are other benefits of getting a credit card.

The following are some advantages of using a credit card:

1. A credit card can enhance living conditions

It can enhance your living conditions, as it provides a short-term financing option that you can access. Besides that, short-term financing comes with flexible payback terms.

2. You can get discounts with some credit cards

You could also get discounts with some credit cards at partner shops and some retail centers. And this discount could be up to a whooping 50% on all purchases at the issuing bank’s partners.

3. You can block the credit card if you lose it

This is one reason it’s better to use a credit card than cash. This is because when you lose your credit card, you do not lose your money. You can easily block it by informing your issuing bank immediately. And also you can easily replace it with a new one immediately.

4. They accept it worldwide

You can pay for goods and services with credit cards worldwide. Because of this, you do not need to have cash on you all the time to make payments.

What are credit card fees I might pay in Ghana?

There are some fees the issuing banks of the credit cards require you to pay in Ghana. These fees help them to keep the services of the credit card up and running.

The following are the usual credit card fees you can incur in Ghana:

1. Foreign transaction fees

On the amount of each foreign transaction, you could pay up to a 3% transaction fee.

2. Currency conversion fees

If you pay in foreign currency (especially the US dollars), they could charge you a currency conversion fee. Making such payments attracts a Dynamic Currency Conversion (DCC).

Conclusion

In Ghana, you can freely use a Visa credit card. However, you could also use Mastercard and American Express. But there’s a high probability of not accessing an ATM that uses them outside of Accra. This is because a cash withdrawal from ATMs can help you make payments at places that don’t accept credit cards. Although it could cost you additional fees. Ensure you do not overspend when you get your credit card.

It is much easier to get loans these days than before. This is because of the continuous increase in lending institutions. Many lenders offer various loans such as; quick loans, mobile app loans, student loans, etc. And these lenders keep advertising their products to attract customers to themselves. Because of this, it has now become survival of the fittest in the world of financial institutions in Ghana.

What is MTN Qwik loan?

MTN qwik loan is the loan package MTN offers their Ghana customers. This loan package allows them to access loans through their mobile money platform. It is comparable to MTN Ahomka loan but has its own unique qualities. Because of how much easier it is for MTN Ghana customers to access this loan, they wouldn’t need to provide proof of collateral in order to access the loan.

Once you’re in Ghana and you’re an MTN network user, you can access the cash loan. And this is regardless of the time you apply for it or for any purpose of the loan. Besides that, you can get this loan from any functional mobile phone.

What is the maximum loan amount I can get from MTN Qwik loan?

Before applying for the MTN qwik loan, it’s necessary to know the maximum loan amount you can get. The maximum loan amount you can get from MTN qwik loan is GHS 1,000.

What are the requirements for MTN qwik loans?

For any financial institution to give you any form of loan. There are some requirements they expect you to meet. These requirements help them assess borrowers and also help them know which borrower should receive the loan.

The following are the requirements of MTN qwik loans:

1. You must be 18 years or above.
2. If you already have a loan with the platform. You must repay it before you can get another one.
3. Be a user of MTN Ghana.
4. To access this loan, you must have been an MTN Ghana subscriber beyond 90 days.
5. Create an account with MTN Mobile Money Services. Besides that, you must actively use it to perform some financial transactions. Transactions such as; sending and receiving money, paying of bills, purchasing of airtime, etc.

How can I apply for MTN qwik loans?

You must make the first move in order to get the loan you want. This is just the way it is for any form of loan application.

The following is how you can apply for MTN qwik loan:

1. Enter *170# on your MTN mobile phone
2. Select ‘5’ to access the Financial Services option
3. Select ‘3’ for loan options
4. Choose’1′ for a quick loan
5. Then select ‘1’ for the loan request
6. Thereafter choose the loan amount you want
7. Then choose your repayment plan. This is the number of days it could take you to repay the loan
8. After the steps above, a screen will appear whereby you will enter your secret mobile money pin. Thereafter, your loan application process is complete.

You can also check out Fido loans review.

How will I know MTN has approved my loan request?

You sure need a sigh of relief having applied for a loan. But normally, this sigh of relief comes with the confirmation that they have approved your loan request. And this is not different from what is obtainable from MTN qwik loan.

Once they approve your loan request, they will send you an SMS whereby you’ll confirm:

1. The loan amount
2. The repayment amount
3. An interest rate of 6.9%
4. The date for repayment

What is the interest rate of the MTN qwik loan?

Loans typically come with interest rates. This is usually the one reason lenders borrow money to individuals. This interest is a source of income for lenders. However, the interest rate for MTN qwik loan is 6.9%.

How can I repay my MTN qwik loan?

You must repay every loan you owe in order to keep a good credit score. Besides that, if you cannot repay the loan you owe, you can’t get another one from MTN qwik loan.

The following is how you can repay your MTN qwik loan:

1. Transfer the amount of money you have to repay into your MTN mobile money wallet before the deadline date.
2. On the deadline date, they will automatically deduct the loan amount you owe from your MTN mobile money wallet.
3. However, you can manually repay the loan amount you owe. You can do this by choosing the ‘Repay loan’ option on the quick menu by dialling *170#.

What is the loan duration of MTN qwik loan?

Every loan typically has a duration. This duration states when you have to repay the loan. The loan duration of MTN qwik loan is 30 days. If the loan is not paid after the duration it would be in default.

• Quick loans in Ghana – Everything you should know
• How to borrow credit from MTN
• Loans in Ghana without collateral – What you should know
• Mobile loans in Ghana – Meaning and where you can get it

Conclusion

Today in Ghana, you do not need to visit any bank before to access all loans. Most times, people who visit the banks do not go there for loan applications. This is because they can easily access the loans they need from the comfort of their homes. MTN qwik loan ensures that Ghanaians have easy access to loans. Besides that, they wouldn’t need collateral before they can get the loans.

A letter of credit acts as an instrument buyers and sellers use in their business transactions. There are always risks in buying and selling. Most typically when you do not know the organisation you’re dealing with so well. Besides that, even when you have some level of trust in a buyer or seller. Unforeseen circumstances can pop up and totally district your arrangements, which can cost you financially. The meaning of letter of credit, how it works, and the process are all-inclusive in this article.

What is a letter of credit?

A letter of credit is a letter that a bank writes guaranteeing timely payments by the buyer to a seller. Besides that, the bank assures that the payment will be complete. They also call a letter of credit ‘credit letter.’

However, if the buyer cannot pay upon purchase from the seller. They will require the bank to cover the full payment or the remaining amount of the purchase. They could offer this as a facility to the bank.

It has become a really important aspect of international trade. Because of international dealings with factors such as distance, and different laws in those countries.

How does it work?

A letter of credit acts as instrument buyers and sellers use in their business transactions. Here, the issuing bank will pay the beneficiaries or the bank they select. But if it is transferable, the beneficiaries may select another receiver they wish. And this could be by giving a third party or a corporate parent the right to draw.

Banks charge a service fee for writing this letter and this charge could be as a percentage of the size of the letter. In international transactions, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits oversees the letters of credit process.

What are the types of letters of credit?

The knowledge of types of letters of credit will help you know the right one you could use. Besides that, it will also help you understand what you are working with.

The following are some types:

1. Commercial Letter of credit

They also call this type of letter of credit ‘Documentary credit’ or an ‘Import/ export letter of credit.’ Here, the bank plays the role of a neutral third party to release funds. Once they meet all the conditions of the agreement.

2. Standby Letter of credit

This type of credit provides compensation, especially when unforeseen circumstances happen during a transaction. It enables payments if something happens along the way or cannot happen.

There is a bit of similarity between the commercial letter of credit and the standby letters of credit. However, they can only activate them only if the beneficiaries can prove that their agreement has default.

Overall, standby letters ensure beneficiaries receive their payments. Besides that, they also guarantee that services will occur satisfactorily for all the parties in the agreement.

3. Irrevocable Letter of credit

You cannot change the irrevocable letter with the authorization of all the parties in the agreement. Revocable letters don’t have the security that most beneficiaries need. Because of this, almost all letters of credit now are irrevocable.

4. Revolving Letters of credit

Buyers use this type of letter often because it allows them to do business repeatedly.

Therefore, this type helps buyers to make multiple payments. Besides that, it relieves them of the stress of getting a new letter for each transaction. The validity of this letter can be up to three years or fewer.

Case Study

A bank in Ghana offers letters of credit for buyers in Asia, Eastern Europe, Australia, and the Middle East who may have difficulty getting international credit on their own. The Ghanaian bank’s letters of credit process help exporters minimize the importer’s country risk and the issuing bank’s commercial credit risk.

• Student Financial Aid For International Students Explained
• Loans in Ghana – Meaning and types of loans you can get
• How to use credit cards to buy bitcoin
• How to get a Credit card in Ghana

They typically provide these letters within two business days. Therefore, guaranteeing payment by the confirming Ghana bank’s branch. This specifically benefits a client in a potentially unstable economic environment.

How can I get a Letter of credit?

After seeing some of the types, you might want to know how you can get one. However, contact your bank for one. For this to happen, you might need to meet an international trade department or commercial division. This is because not all financial institutions offer letters of credit. But some banks around you can easily direct you to where you can get it.

How does it work in international trade?

In international trade, the letter of credit process comes into reality. This is because importers and exporters use them regularly to protect their transactions. The risks of working with people from other countries that you don’t know too well can be risky. Most times, a buyer from overseas might have good intentions to make payments on time. But because of some constraints, like political unrest or business troubles can delay payments.

Because of the different time zones, languages, etc communication could become difficult. Therefore, the letter help makes the details of the agreement clear to everyone from now on. Minimizing the room for uncertain assumptions among the parties.

Also read up and understand what is a lease?

What must I consider before getting a letter of credit?

A letter of credit backs up your business transactions should unfortunately fall apart. It reduces the risks you encounter in business and ensures the continuation of your business. Therefore, in order to enjoy the benefits of the letter, there are things you must consider.

The following are the things you must consider before getting a letter of credit:

1. Review all the requirements for the letter carefully before you agree to the deal

2. Ensure you have a full understanding of all the documents and ask your bank questions when you are not following

3. Ensure you can get all the documents you may need for it

4. Know the time limit that comes with the letter and know whether they are cool for you

5. Know how fast your service providers or shippers will produce documents for you

6. Make thorough verification of all documents they require for the letter and match them to the letter of credit application as they require it. Avoid typographical errors or common substitutions because they can cause problems during the application.

Conclusion

With the letter of credit, the path for international trade will always be free from hindrances. Because of this, sellers have little or nothing to fear regarding timely payments for business transactions from the buyers. Whereas the buyers will have little or no fear about adequate delivery of goods and services, they pay for.