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The short answer
Try scholarships and bursaries first, because they do not need repaying, but apply for the NELFUND student loan in parallel so you are not left without funding if a scholarship does not come through. NELFUND loans were set up under the 2023 law as interest-free loans, with repayment starting two years after NYSC, so a scholarship that covers the same cost can reduce how much you need to borrow.
For most Nigerian students the real question is not loan or scholarship, but in what order and in what amounts. Scholarships are free money with competition and deadlines; the federal student loan is easier to qualify for but must be repaid. Handled well, the two work together: the scholarship covers what it can, and the loan fills the gap.
How the two differ
| Scholarship or bursary | NELFUND student loan | |
|---|---|---|
| Repayment | None | Yes, starting two years after NYSC |
| Interest | Not applicable | Set up as interest-free under the 2023 law |
| Who decides | Sponsor: government, state, school, company or foundation | Nigerian Education Loan Fund |
| Selection | Competitive: grades, need, state of origin, course | Eligibility rules rather than ranking |
| Timing | Fixed application windows | Applications through the NELFUND portal |
The figures and rules here come from NELFUND's Executive Secretary as reported in March 2024. For eligibility in detail, see who qualifies for NELFUND, and for interest, does NELFUND charge interest.
The order that usually works best
- List every scholarship you could qualify for. Federal schemes, your state's scholarship board or bursary, your local government, your school, professional bodies, companies and foundations.
- Note each deadline and what it pays for. Some cover tuition, some give a cash allowance, some pay books or accommodation.
- Apply for NELFUND in the same session. Do not wait for scholarship results; loan processing takes time and your school's fee deadline will not move.
- When a scholarship is confirmed, adjust what you borrow. If it pays your tuition, you may not need the loan to pay the same fee. Check NELFUND's current rules on changing or reducing support.
- Keep applying every year. Many scholarships are open to students already in school, so a loan in year one need not mean a loan every year.
Can you have both?
Often yes, as long as they do not pay for the same thing. A scholarship that pays a cash allowance can sit alongside a loan that covers institutional fees. What you should avoid is two sources paying the same tuition bill, which at best leaves money sitting idle and at worst breaches a sponsor's terms. Read each scholarship's conditions for clauses about other funding, and check NELFUND's portal for its rules.
A worked example
Example only. Tunde's annual fees are ₦300,000 and he expects ₦200,000 of other costs. His state bursary pays ₦50,000 in cash and a company scholarship pays ₦150,000 directly to his school. That leaves ₦150,000 of fees (₦300,000 − ₦150,000) and ₦150,000 of other costs (₦200,000 − ₦50,000) to find. He applies to NELFUND for the remaining fees only, rather than the full ₦300,000, so he owes less when repayment begins two years after his NYSC.
What to check first
- Your school is covered by NELFUND; see student loan options compared.
- Scholarship deadlines for the current session, from the sponsor's own website.
- Any scholarship that asks you to pay a 'form fee' to a person is likely fake.
- How and when NELFUND repayment works; see NELFUND repayment rules.
Spotting fake scholarships and loan offers
Students are a favourite target of fake funding offers, usually around admission season. The warning signs are the same for scholarships and loans:
- A 'form fee' or 'processing fee' paid to a personal account.
- A link sent by WhatsApp rather than published on the sponsor's own site.
- Promises of large awards with no essay, interview or school verification.
- Requests for your bank PIN, OTP or internet banking password.
Real sponsors publish criteria, deadlines and contact details, and real loans come through the official portal. See how to check a government scheme.
When a loan makes sense even with a scholarship
If your scholarship is paid late, for example after the school's fee deadline, a loan may be what keeps you enrolled. Plan for that gap, and check whether the scholarship can repay the loan or whether you simply borrow less in later years.
Keep a funding file
Keep one folder, paper or digital, with your admission letter, school fee schedule, NIN, BVN, results and every scholarship and NELFUND reference number. Sponsors and the loan portal ask for many of the same documents, and renewals each year go faster when they are in one place. Note each sponsor's renewal conditions, such as a minimum grade, so you do not lose an award by missing a requirement you could have met.
Where Pryme fits
Students who receive allowances can keep spending money and savings apart. A Flexible Savings Box holds money you set aside for next term's costs, and the Personal Assistant can remind you of deadlines, with nothing moving until you approve; see Personal Assistant.
Questions people ask
Should I apply for NELFUND if I am applying for scholarships?
Yes. Apply for both in the same session so you are not left short if a scholarship is not awarded, then borrow only what scholarships do not cover.
Can I collect a scholarship and a student loan together?
Often, if they pay for different costs. Avoid two sources paying the same fee and read each sponsor's conditions on other funding.
When do I start repaying the NELFUND loan?
NELFUND's Executive Secretary said repayment begins two years after completing NYSC.
Is a scholarship better than a student loan?
A scholarship is cheaper because it is not repaid, but it is competitive and may carry conditions such as a work bond. The loan fills gaps scholarships leave.
Sources
- Daily Trust (NAN): Students loan recovery begins 2 years after NYSC (8 Mar 2024) · accessed Oct 2026
- NALTF: Federal Govt introduces YouthCred, a national consumer credit scheme for Nigerians aged 18–39 (9 Aug 2025) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.