The month is not over, but the money is already running out. There is food to buy, transport to pay for, electricity to recharge, and perhaps school fees or an unexpected medical bill to settle. The salary that came in a few weeks ago has been stretched in every direction, and there is still more to pay for.

For some Nigerian households, this is when a personal loans starts looking less like an option and more like a way to get through the month.

Borrowing can provide relief when expenses pile up, or an unexpected situation catches a family unprepared. A loan can help cover an urgent bill, keep children in school, or take care of a household need that cannot be postponed. But when people repeatedly turn to credit to meet expenses their regular income can no longer cover, it raises questions about how well households are managing financially.

Outstanding personal loans reached ₦1.99tn at the end of June 2026, increasing by approximately ₦58.5bn from the previous quarter. That represents a 3.03 percent rise from the ₦1.93tn recorded at the end of March.

The wider consumer credit market also grew by 3.26 percent to ₦3.17tn during the second quarter. Personal loans accounted for 62.87 percent of that amount, meaning they made up nearly two-thirds of the credit owed by consumers.

The figures show that personal borrowing is becoming a significant part of household finance. But the more important question is what Nigerians are doing with the money and whether taking on more debt is making life easier or simply pushing financial pressure into the future.

When the salary is no longer enough

For many households, the problem is not necessarily a lack of income. It is that the money coming in does not stretch as far as it once did.

Food, transportation, electricity, rent, and other regular expenses compete for the same salary. Even people who earn consistently can find themselves making difficult choices about what to pay first. When an additional expense appears, there may be little left to absorb it.

This helps explain why borrowing for everyday needs is becoming more common. The 2026 Access to Financial Services in Nigeria Survey found that 40.8 percent of formal borrowers used loans mainly for coping and consumption purposes, compared with 31.7 percent in 2023.

During the same period, the share of borrowers using credit for productive enterprise purposes fell from 40.2 percent to 34.3 percent. More formal borrowers are therefore using loans to manage immediate needs, while a smaller proportion are borrowing to run or expand businesses.

There is an important difference between the two. Someone who borrows to purchase business equipment may generate additional income to repay the loan. Someone who borrows to pay for groceries or electricity gets immediate relief, but the expense does not create another source of money for repayment.

That does not make borrowing for household needs a bad decision. Emergencies happen, incomes can be disrupted, and sometimes a loan is the most accessible way to handle an urgent expense. The concern is what happens when borrowing becomes a regular part of the household budget rather than a temporary solution.

The money still has to be paid back

Getting a loan can make a difficult month easier. Paying it back is where the pressure can return. A borrower who takes money to cover rent, school fees or household expenses still has to meet the repayment schedule, often with interest. If income remains unchanged and living costs continue to take up most of it, finding money for repayments can become another challenge.

The lending environment makes this worth considering. The average prime lending rate declined from 19.37 percent in the first quarter of 2026 to 19.01 percent in the second quarter. However, the maximum lending rate increased from 34.34 percent to 34.37 percent.

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These are broader banking sector lending figures, not the specific rates charged on every personal loan. Actual costs depend on the lender, product and borrower’s circumstances. Still, they show that credit can come at a considerable cost.

For a household already struggling to balance expenses, repayments leave less money for the following month. If another emergency comes up before the previous loan is settled, borrowing again may seem like the easiest way to manage it.

Over time, this can become a difficult cycle. A loan taken to solve one problem creates another repayment obligation. When the next salary is not enough, another loan may follow. The household keeps meeting immediate needs, but its financial position may not be improving.

More access, but what kind of financial relief?

The rise in personal loans also reflects greater access to formal credit. The Access to Financial Services in Nigeria Survey found that formal credit use increased from six percent of adults in 2023 to 10 percent in 2026. Approximately 11.9 million Nigerians borrowed from regulated providers.

Credit use also increased among informally employed Nigerians, young adults and business owners. This matters in a country where many people have struggled to access personal loans through formal financial institutions.

Being able to obtain credit gives households more options when they need money. However, access alone does not tell us whether a loan is affordable or leaves the borrower in a better position.

For households, understanding the interest, additional charges, repayment period, and amount that will be deducted from future income can help prevent an urgent need from becoming a longer financial problem. Lenders also have a responsibility to consider whether borrowers can realistically repay what they take on.

Cynthia Nwanonyiri