How to Pay Back a Payday Loan

To pay back a payday loan in Nigeria, keep your salary paid into the lending bank's account. The bank deducts the repayment automatically, usually on your next payday, often as your salary lands. If the account is short, the bank can recover the debt from your other BVN-linked accounts. Most banks also let you repay early through their app or at a branch.

If you’ve taken a payday loan before, you might have woken up one morning, after payday of course, and see that the loan has been repaid automatically. Your lending bank deducts it from your salary the moment your salary lands. 

This is because payday loans are often linked to salary accounts which is where the name “payday” comes from.

Some banks take the full amount on your next payday or within about 30 days. Others split it into equal monthly installments over up to 12 months. Most let you repay early through their app or at a branch.

What do banks require to deduct payday loan repayments?

Because your salary is the lending bank’s security, the bank will usually ask you to:

• Have your salary with them, sometimes for 6 to 12 months before you qualify.

• Sign a salary domiciliation, so your salary can't move to another bank until the loan is cleared.

• Authorise automatic debits by the bank or your employer's payroll provider.

While Payday loans are built around your salary account for easy recovery, if you miss a repayment, the bank can turn to the CBN's Global Standing Instruction (GSI) to exercise its right to recover overdue loans from your other bank accounts linked to your BVN.

Can I borrow a payday loan without a salary account?

If you're self-employed or a freelancer, payday loan offers usually don’t apply to you. However, you can borrow other forms of loans.

With Renmoney, you don't need a salary account or an existing bank account to borrow. 

Sign up in the app, apply with your account at any Nigerian bank to borrow up to ₦1 million, and get a decision in about 5 minutes.

To repay easily on Renmoney, set up a repayment method and keep your Renmoney account funded a day before each due date. For more options, see how to get a quick loan and our list of loan apps approved by the CBN.

Borrow without moving your salary

Unlike a payday loan, a Renmoney loan doesn't depend on where your salary lands. Download the Renmoney app and apply in minutes, or explore our personal and business loans. Have questions? Check our FAQs or reach our team.

Frequently asked questions

When is a payday loan due? 

Usually on your next payday or within about 30 days. Some banks offer payday-style loans repaid monthly over up to 12 months.

What happens if I don't repay a payday loan? 

The bank can recover it from your other BVN-linked accounts under the GSI, and the default goes on your credit record. Talk to your bank early if you're struggling.

Can I repay a payday loan early? 

Most banks allow it through their app or at a branch. Check your loan terms for any early repayment charges.