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Unsecured Loans in Kenya – Everything You Should Know

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Unsecured loans in Kenya are loans that are granted with no collateral. If a borrower defaults on the loan, it leaves the lender with few options to get paid outside of filing a lawsuit.

In the course of this article, we will be looking more into unsecured loans and if they’re right for you.

What is an Unsecured Loan?

unsecured-loans-in-kenya

As stated above, an unsecured loan is a form of loan that doesn’t need collateral or a security deposit to receive. With an unsecured loan, instead of pledging assets, borrowers qualify based on their credit history and income.

Lenders do not receive the right to take physical assets if borrowers stop making payments on unsecured loans. You promise to repay, but you don’t back up that promise by pledging collateral. 

An unsecured loan generally comes in three forms:

How Unsecured Loans in Kenya work

When applying for an unsecured loan, most lenders check applicants’ history to see if you’ve successfully paid off loans in the past.

Based on the information in your credit report, a computer creates a credit score, which is a shortcut for evaluating your creditworthiness.

Lenders will also want to be sure that you have the financial capacity to repay any new loans. When you apply for a loan, whether secured or unsecured, lenders will ask for proof of income.

Then, evaluation is done to ascertain how much of a burden your new loan payment will be relative to your monthly income. They typically do this by calculating a debt-to-income ratio.

Documents required for obtaining an unsecured loan

The following document requirements are obtainable with most unsecured loan providers;

  • Office address proof for self-employed individuals
  • Proof of continuity of business
  • Processing fee cheque
  • Duly filled loan application form
  • Couple of passport-size photographs of loan borrower
  • Identity proof – passport, driving license, voters ID, PAN card (any one proof)
  • Proof of residence – utility bill, passport, etc.
  • Salary slips for last 3 or last 6 months

How to Apply for Unsecured Loans?

The following are ways to apply for unsecured loans;

Company website: A great percentage of lenders in the market now provide their services through their websites. You can visit the official website of the bank and apply for a loan with your credentials.

Loan aggregators: These are third-party loan aggregators that can help you find the best deals available in the market. With them, you can compare the different loan products and choose the best product that suits your specific needs.

Branch office: Lastly, you may also visit the lender’s branch office and apply for a loan in person. With the Internet, this choice of application is gradually going extinct. However, if you are not Internet savvy, you may use this option to apply for a loan.

Top banks in Kenya that offer Unsecured loans

Knowing the fact that a great percentage of the risk involved in granting an unsecured loan rest on the shoulders of the lender.

Not every credit provider out there welcomes the idea of granting unsecured loans. The following banks offer unsecured loans in Kenya;

  • ICICI Bank

ICICI is one of the top private banks in the country. The lender is known for providing a wide range of loan products, including personal loans.

Benefits

  • Loan disbursal within just 3 seconds for pre-approved customers
  • Flexible loan repayment tenure up to 60 months
  • Minimal documentation and hassle-free application process
  • HDFC Bank

HDFC is one of the biggest private lenders in the country. The transparent process in offering loans helps customers with easy access to unsecured and other forms of loans.

Benefits

  • Loan disbursal within just 10 seconds for pre-approved customers
  • Loan disbursal within 4 hours for other customers
  • Optional insurance coverage for customers
  • Hassle-free application process

Yes Bank

Yes Bank is also one of the top-notch credit providers with a top-notch collection of loan products in its line-up. The personal loan offered by the bank comes with flexible terms for the benefit of applicants. They include;

Benefits

  • Repayment tenure ranging from 12 months to 60 months
  • Speed and hassle-free application process
  • Option for transferring existing loans (with high interest) from other banks to Yes Bank

IDFC First

Capital First is one of the major financial institutions that offers loans to small and medium enterprises in Kenya. The personal loan offered by the company comes with the following terms:

Benefits

  • Flexible repayment tenure ranging from 1 year to 5 years
  • Online approval in just 2 minutes
  • Hassle-free loan application process

How can I ensure my Unsecured loan application is approved?

Applicants can follow the steps mentioned below to ensure that their unsecured loan applications do not get rejected:

  • Bills and existing loans should be paid on time to maintain a high credit score.
  • In case a customer has a low credit score or has never applied for any credit before, he or she can build his/her credit score or enhance it over time.
  • Ensure your earnings match or exceed the minimum income criteria of the concerned lender before applying for an unsecured loan.
  • Having a stable and regular source of income also increases the chances of an unsecured loan application getting approved.

Pros and Cons of Unsecured Loans

From the borrower’s perspective, the main advantage of an unsecured loan is the fact that it is risk free. If you receive an unsecured loan and can’t make payments, you don’t risk losing your assets. You just put your credit score at risk.

For people and businesses with unsecured loans, there is a high chance that your debt will be discharged if you file for bankruptcy.

Additionally, since unsecured loans don’t require any collateral, the lender takes on more risk. This generally translates to higher interest rates and less favorable terms.

While unsecured loans may be less risky for the borrower, it’s important to know how much more it could cost you over its duration. You may find that putting an asset down as collateral is more beneficial than the extra money you’ll pay in interest.

Conclusion

An unsecured loan can be one of the best loan options for blacklisted people. The fact that you don’t have to provide any form of collateral is definitely an advantage to the borrower. Especially in a situation the borrower has little or nothing to offer at all.

Instant Unsecured Loans in Kenya Explained

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Instant Unsecured loans are loans that are granted with no collateral and within a few minutes. If a borrower defaults on the loan, it leaves the lender with few options to get paid outside of filing a lawsuit.

In the course of this article, we will be looking more into instant unsecured loans and if they’re right for you.

instant-unsecured-loans-in-kenya

What is an instant unsecured Loan?

As stated above, instant unsecured loan is a form of loan that doesn’t need collateral or a security deposit to receive and is disbursed immediately.

With instant unsecured loan, instead of pledging assets, borrowers qualify based on their credit history and income. Lenders do not receive the right to take physical assets if borrowers stop making payments on unsecured loans.

You promise to repay, but you don’t back up that promise by pledging collateral. 

An unsecured loan generally comes in three forms:

  • Personal loans
  • Student loans
  • Unsecured loans

How instant unsecured loans work

When applying for an instant unsecured loan, most lenders check the applicant’s history to see if you have successfully paid off loans in the past. Based on the information in your credit report, your credit score is created, which is a shortcut for evaluating your creditworthiness.

Lenders will also want to be sure that you have the financial capacity to repay any new loans. When you apply for a loan, whether secured or unsecured, lenders will ask for proof of income.

Then, evaluation is done to ascertain how much of a burden your new loan payment will be relative to your monthly income. They typically do this by calculating a debt-to-income ratio.

Documents required for obtaining instant unsecured loan

The following document requirements are obtainable with most unsecured loan providers:

  • Office address proof for self-employed individuals
  • Proof of continuity of business
  • Processing fee cheque
  • Duly filled loan application form
  • Couple of passport-size photographs of loan borrower
  • Identity proof – passport, driving license, voters ID, PAN card (any one proof)
  • Proof of residence – utility bill, passport, etc.
  • Pay slips for last 3 or last 6 months

How to Apply for instant unsecured Loans?

The following are ways to apply for unsecured loans:

Lender’s website: A great percentage of lenders in the market now provide their services through their websites. You can visit the official website of the bank and apply for a loan with your credentials.

Loan aggregators: These are third-party loan aggregators that can help you find the best deals available in the market. With them, you can compare the different loan products and choose the best product that suits your specific needs.

Branch office: Lastly, you may also visit the lender’s branch office and apply for a loan in person. With the Internet, this choice of application is gradually going extinct. However, if you are not Internet savvy, you may use this option to apply for a loan.

Top banks in Kenya that offer instant unsecured loans

Knowing the fact that a great percentage of the risk involved in granting instant unsecured loan rests on the shoulders of the lender.

Not every credit provider out there welcomes the idea of granting unsecured loans. The following banks offer instant unsecured loans in Kenya:

National Bank of Kenya

NBA is a commercial bank and licensed by the central bank of kenya. You can get an unsecured loan of kes. 6,000,000 without collateral

Benefits

  • Short processing period
  • Easy payment
  • No collateral required
  • Top up your loan
  • Easily accessible

Rates and fees

  • Minimum of KSh 50,000 and maximum of KSh 6,000,000
  • Interest Rate is made up of  CBR + Bank Margin % p.a on a  reducing balance.
  • Has a minimum of 6 months and a maximum  of 84 months
  • Negotiation fees  of 2% for first loans and buy offs. Then 1.5% for top-ups.

Internal costs

  • Appraisal fees charged per individual

External costs

  • Excise duty
  • Insurance fee charged against retrenchment and death.

HDFC Bank

HDFC is one of the biggest private lenders in the country. The transparent process in offering loans helps customers with easy access to instant unsecured and other forms of loans.

Benefits

  • Loan disbursal within just 10 seconds for pre-approved customers
  • Loan disbursal within 4 hours for other customers
  • Optional insurance coverage for customers
  • Hassle-free application process

Stanbic Bank Kenya

Stanbic Bank Kenya is also one of the top-notch loan providers with a top-notch collection of loan products in its line-up. The personal loan offered by the bank comes with flexible terms for the benefit of applicants. They include:

Benefits

  • Flexible payment and loan-top after 6 months or repayment
  • Fast and hassle-free application process and fund disbursed within 48hours

What you need to provide

  • Kenyan National ID
  • Proof of Residence. You can come along with your utility bill or lease agreement.
  • 3 months bank statement or your current payslip
  • Kenya Revenue Authority PIN

HF Group

H.F Group is an integrated property and financial solutions regulated by Central bank of kenya. They are major financial institutions that offer SME loans and Asset financing in Kenya. The personal loan offered by the company comes with the following terms:

Features & benefits

  • Maximum period of 36 months and Maximum amount of Kes. 500,000
  • No early repayment penalties
  • Attractive interest rate on reducing balance

How can I ensure my instant unsecured loan application is approved?

Applicants can follow the steps mentioned below to ensure that their instant unsecured loan applications do not get rejected:

  • We should pay bills and existing loans on time to maintain a high credit score.
  • In case a customer has a low credit score or has never applied for any credit before, he or she can build his/her credit score or enhance it over time.
  • Ensure your earnings match or exceed the minimum income criteria of the concerned lender before applying for an unsecured loan.
  • Having a stable and regular source of income also increases the chances of an unsecured loan application getting approved.

Pros and Cons of instant unsecured Loans

From the borrower’s perspective, the main advantage of an instant unsecured loan is the fact that it is risk free and gotten within a short while. If you receive an instant unsecured loan and can’t make payments, you don’t risk losing your assets.

You just put your credit score at risk. For people and businesses with instant unsecured loans, there is a high chance that your debt will be discharged if you file for bankruptcy.

Additionally, since instant unsecured loans don’t require any collateral and are paid within a few minutes after application, the lender takes on more risk. This generally translates to higher interest rates and less favorable terms.

While instant unsecured loans may be less risky for the borrower, it is important to know how much more it could cost you over its duration. You may find that putting an asset down as collateral is more beneficial than the extra money you will pay as interest.

Conclusion

An instant unsecured loan can be one of the best loan options for blacklisted people. The fact that you don’t have to provide any form of collateral and still get your loan within a few minutes is definitely an advantage to the borrower.

Especially in a situation the borrower has little or nothing to offer at all. You can enjoy instant unsecured loans from any place you are in Kenya. All you need is to login to the lender’s website or visit their physical office. 

Instant unsecured loans in Kenya – What you should know

by

Instant Unsecured loans are loans that are granted with no collateral and within a few minutes. If a borrower defaults on the loan, it leaves the lender with few options to get paid outside of filing a lawsuit. In the course of this article, we will be looking more into instant unsecured loans and if they’re right for you.

instant-unsecured-loans-in-kenya

What is an instant unsecured Loan?

As stated above, instant unsecured loan is a form of loan that doesn’t need collateral or a security deposit to receive and is disbursed immediately. With instant unsecured loan, instead of pledging assets, borrowers qualify based on their credit history and income. Lenders do not receive the right to take physical assets if borrowers stop making payments on unsecured loans. You promise to repay, but you don’t back up that promise by pledging collateral. 

An unsecured loan generally comes in three forms:

· Personal loans

· Student loans

· · Unsecured loans

How instant unsecured loans work

When applying for an instant unsecured loan, most lenders check the applicant’s history to see if you have successfully paid off loans in the past. Based on the information in your credit report, your credit score is created, which is a shortcut for evaluating your creditworthiness.

Lenders will also want to be sure that you have the financial capacity to repay any new loans. When you apply for a loan, whether secured or unsecured, lenders will ask for proof of income. Then, evaluation is done to ascertain how much of a burden your new loan payment will be relative to your monthly income. They typically do this by calculating a debt-to-income ratio.

Documents required for obtaining instant unsecured loan

The following document requirements are obtainable with most unsecured loan providers:

· Office address proof for self-employed individuals

· Proof of continuity of business

·         Processing fee cheque·         Duly filled loan application form

Proof of residence – utility bill, passport, etc.

Pay slips for last 3 or last 6 months

How to Apply for instant unsecured Loans?

The following are ways to apply for unsecured loans:

Lender’s website: A great percentage of lenders in the market now provide their services through their websites. You can visit the official website of the bank and apply for a loan with your credentials.

Loan aggregators: These are third-party loan aggregators that can help you find the best deals available in the market. With them, you can compare the different loan products and choose the best product that suits your specific needs.

Branch office: Lastly, you may also visit the lender’s branch office and apply for a loan in person. With the Internet, this choice of application is gradually going extinct. However, if you are not Internet savvy, you may use this option to apply for a loan.

Top banks in Kenya that offer instant unsecured loans

Knowing the fact that a great percentage of the risk involved in granting instant unsecured loan rests on the shoulders of the lender. Not every credit provider out there welcomes the idea of granting unsecured loans. The following banks offer instant unsecured loans in Kenya:

National Bank of Kenya

NBA is a commercial bank and licensed by the central bank of Kenya. You can get an unsecured loan of kes. 6,000,000 without collateral

Benefits

  • Short processing period
  • Easy payment
  • No collateral required
  • Top up your loan
  • Easily accessible

Rates and fees

  • Minimum of KSh 50,000 and maximum of KSh 6,000,000
  • Interest Rate is made up of  CBR + Bank Margin % p.a on a  reducing balance.
  • Has a minimum of 6 months and a maximum  of 84 months
  • Negotiation fees  of 2% for first loans and buy offs. Then 1.5% for top-ups.

Internal costs

  • Appraisal fees charged per individual

External costs

  • Excise duty
  • Insurance fee charged against retrenchment and death.

HDFC Bank

HDFC is one of the biggest private lenders in the country. The transparent process in offering loans helps customers with easy access to instant unsecured and other forms of loans.

Benefits

  • Loan disbursal within just 10 seconds for pre-approved customers
  • Loan disbursal within 4 hours for other customers
  • Optional insurance coverage for customers
  • Hassle-free application process

Stanbic Bank Kenya

Stanbic Bank Kenya is also one of the top-notch loan providers with a top-notch collection of loan products in its line-up. The personal loan offered by the bank comes with flexible terms for the benefit of applicants. They include:

Benefits

  • Flexible payment and loan-top after 6 months or repayment
  • Fast and hassle-free application process and fund disbursed within 48hours

What you need to provide

  • Kenyan National ID
  • Proof of Residence. You can come along with your utility bill or lease agreement.
  • 3 months bank statement or your current payslip
  • Kenya Revenue Authority PIN

HF Group

H.F Group is an integrated property and financial solutions regulated by Central bank of kenya. They are major financial institutions that offer SME loans and Asset financing in Kenya. The personal loan offered by the company comes with the following terms:

Features & benefits

  • Maximum period of 36 months and Maximum amount of Kes. 500,000
  • No early repayment penalties
  • Attractive interest rate on reducing balance

How can I ensure my instant unsecured loan application is approved?

Applicants can follow the steps mentioned below to ensure that their instant unsecured loan applications do not get rejected:

·         Bills and existing loans should be paid on time to maintain a high credit score.

·         In case a customer has a low credit score or has never applied for any credit before, he or she can build his/her credit score or enhance it over time.

·         Ensure your earnings match or exceed the minimum income criteria of the concerned lender before applying for an unsecured loan.

·         Having a stable and regular source of income also increases the chances of an unsecured loan application getting approved.

Pros and Cons of instant unsecured Loans

·         From the borrower’s perspective, the main advantage of an instant unsecured loan is the fact that it is risk free and gotten within a short while. If you receive an instant unsecured loan and can’t make payments, you don’t risk losing your assets. You just put your credit score at risk. For people and businesses with instant unsecured loans, there is a high chance that your debt will be discharged if you file for bankruptcy.

·         Additionally, since instant unsecured loans don’t require any collateral and are paid within a few minutes after application, the lender takes on more risk. This generally translates to higher interest rates and less favorable terms. While instant unsecured loans may be less risky for the borrower, it is important to know how much more it could cost you over its duration. You may find that putting an asset down as collateral is more beneficial than the extra money you will pay as interest.

Conclusion

An instant unsecured loan can be one of the best loan options for blacklisted people. The fact that you don’t have to provide any form of collateral and still get your loan within a few minutes is definitely an advantage to the borrower. Especially in a situation the borrower has little or nothing to offer at all. You can enjoy instant unsecured loans from any place you are in Kenya. All you need is to login to the lender’s website or visit their physical office. 

Cheapest Bank Loans in Kenya – All You Need To Know

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The Central Bank of Kenya’s (CBK) decision to raise its benchmark rate in March 2023 sent shockwaves through the Kenyan banking sector. As expected, most commercial banks followed suit, raising their lending rates. But amidst this rise, a different story emerged – one of smaller lenders defying the trend and offering borrowers a glimmer of hope with lower interest rates.

This blog post dives deep into the world of Kenyan bank loans, uncovering the cheapest options available and empowering you with the knowledge to make informed financial decisions.

We’ll reveal the banks extending a helping hand to borrowers with rates as low as 9%, while also exposing those charging a hefty 17.6%. So, buckle up and get ready to navigate the Kenyan loan market like a pro!

Cheapest Bank loans in Kenya

Based on our research, we came up with a list of banks that offer the cheapest loans in Kenya. Some of these banks are highlighted in the table below:

BankOverall rate
The Central Bank of Kenya9%
First Community9%
Ecobank10.7%
HFC11%
Access11.2%
Consolidated11.6%
Habib11.9%
DTB12.1%
Citibank12.2%
KCB15.6%

1. First Community Bank (FCB)

Standing out from the crowd, FCB boasts the current lowest average interest rate at an attractive 9%. This makes them a compelling option for borrowers seeking the most affordable loan. They offer various loan products, including personal and unsecured loans.

2. Ecobank Kenya

Following closely behind is Ecobank Kenya with a competitive average rate of 10.7%. This positions them as a solid choice for budget-conscious borrowers. They cater to a wide range of loan needs, making them a versatile option.

3. HF Bank

Offering a competitive rate of 11%, HF Bank provides a good balance between affordability and an established presence in the Kenyan banking sector. They specialize in mortgage and asset-backed loans, making them a good choice for those specific needs.

4. Access Bank Kenya

Rounding out the top contenders, Access Bank Kenya comes in at a slightly higher average rate of 11.2%.

Other Options to Consider

While not the absolute cheapest, these banks are still worth exploring depending on your specific needs and loan product:

  • Consolidated Bank
  • Habib Bank
  • DTB Bank

International Players:

  • Citibank: International banks like Citibank often cater to a different market segment and may have higher interest rates to reflect their operating model.

Traditional Powerhouses:

  • Kenya Commercial Bank (KCB): KCB loans often attract a 13% interest rate. They offer different categories of loans. Ranging from Masomo loans, personal unsecured check-offs, salary advances, etc. The only extra fee you pay is a negation fee of 2.5%. Interest rate comprises CBK rate at 9% and bank variable margin of 4%

Common Types of Cheap Loans Offered by Banks

  1. Secured loans
  2. Salary advance

Factors That Cause a Change in Interest Rate

The factors that cause changes in interest rates include:

  1. Monetary Policy: Central banks, such as the Federal Reserve in the United States, have the authority to set interest rates. By adjusting the benchmark interest rates, central banks can influence borrowing costs for businesses and consumers.
  2. Inflation: When inflation is high, central banks may raise interest rates to curb inflationary pressure and maintain price stability. Higher interest rates can reduce borrowing and spending, which can help slow down inflation.
  3. Demand and Supply of Credit: Interest rates are influenced by the demand for credit from borrowers and the supply of funds available from lenders. When demand for credit is high compared to the supply of funds, interest rates tend to rise. Conversely, when there is less demand for credit or an excess supply of funds, interest rates may decrease.
  4. Economic Growth and Financial Markets: Interest rates can also be influenced by the overall state of the economy and financial markets. During periods of economic expansion, interest rates may rise to control inflation and cool down the economy. Conversely, during economic downturns, central banks may lower interest rates to stimulate borrowing and spending to boost economic activity.

It’s important to note that interest rates are complex and can be influenced by multiple factors, and the interplay between these factors can vary depending on the specific economic conditions and policies in different countries.

How Commercial Banks Choose Their Interest Rates

Commercial banks determine interest rates using several factors such as:

  1. Market demand: The bank’s cost of obtaining funds is one of the most significant factors in determining the interest rate. The bank’s cost of borrowing affects its lending rate to customers, as the bank needs to earn enough interest to cover its cost of borrowing and also make a profit.
  2. Operational costs: Operational costs such as overhead, administrative and personnel expenses, and other costs of providing loans also contribute to the interest rate charged.
  3. Yield curves.
  4. Additionally, commercial banks assess potential borrowers’ credit scores, credit history, and assets to determine the risk of lending to them and the appropriate interest rate. 
  5. Finally, commercial banks also consider market conditions, for example, the prevailing interest rate trends, the demand for credit, as well as, the economy’s overall health and stability.

In conclusion, interest rates are influenced by various economic factors, including market demand and the bank’s operational costs. Banks aim to maximize profits while still remaining competitive by striking a balance between profitability and affordability to their customers.

Conclusion

Most borrowers fall prey to banks that offer expensive loans. The reason is that they patronize the ease of getting the loans rather than knowing the interest or other fees attached.

In urgent situations, borrowers may not notice some features. Some banks exploit Kenyans at this point of vulnerability. 

Note that it is better to conduct proper research for the cheapest loans before taking one. This would enable you to make your repayments easily.

How do I apply for M-Pesa loans- All you need to know

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The process of applying for M-Pesa loans is simple. How do I apply for M-Pesa loans will be answered in this article.  M-Pesa Kenya is a mobile money service that you can use to store, send, receive, and repay bills.

There are a variety of M-Pesa applications  that offer loans directly to your M-Pesa account. It is quickly taking over and  dominating the market. We will discuss how to apply for M-Pesa loans in Kenya.

M-Pesa loans

M-Pes loans are offered through the M-Pesa app. They are loans transferred directly to your M-Pesa account. M-Pesa is the most affordable way to handle money, transfer and get loans. Over millions of Kenyans enjoy the loan. It is instant, easy to apply and comes with wonderful features. There are other additional features you can enjoy from the M-Pesa platform.

13 M-Pesa loans apps in Kenya

  1. KCB M-Pesa
  2. M-Shwari 
  3. Tala
  4. Branch
  5. Timiza
  6. Haraka
  7. Zenka loan app
  8. Ipesa loan app
  9. Saida loan app
  10. Shika loan app
  11. Berry simple swift loan app
  12. Pezesha loan app
  13. Okolea loan app

How do I apply for M-Pesa loan 

To apply for M-Pesa loans in Kenya, follow the step below:

  1. Got to M-Pesa menu
  2. Choose loans and saving
  3. Select the M-Pesa loan app (like M-Shwari, KCB etc.)
  4. Request for loan
  5. Input amount
  6. Type in the M-Pesa pin and submit
  7. Loan amount will be sent to your M-Pesa account 

How do I qualify for M-Pesa loans

In order to qualify for M-Pesa loans, be sure to:

  1. Have M-Pesa account for at least 6 months
  2. Be a Safaricom user
  3. Use other Safaricom services such as voice, data e.t.c

What is the maximum amount M-Pesa can hold

Maximum balance M-Pesa can hold is Ksh. 300,000

5 M-Pesa application transactions 

  1. Paying bills
  2. Buying airtime
  3. Buying goods
  4. Sending money
  5. Saving on the platform 

Conclusion 

Most Kenyans depend on short-term loans to solve their needs. Additionally, they appreciate instant loans. These are all features of M-Pesa loans. You are responsible for choosing the best M-Pesa app with the best repayment plan and interest rate. Do your research smartly. 

You can also check out apps like dave and Diamond Trust Bank options.

Commercial Banks in Kenya that give loans without collateral

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Proper execution of economic activities in Kenya is a major role financial institutions have played through loan provision. However, the deep concern of banks while advancing loans is how to get their cash back. Noting that the transaction between the bank and the borrower is an enormous risk. There are still banks that advance loans without collateral.

Notwithstanding the risks involved, some banks give loans to their customers without collateral. They look at your excellent credit history, strong income proof, and long relationship with them.

Let us explore some banks in Kenya that give loans without collateral.

banks-in-kenya-that-gives-loans-without-collateral

Bank loans without collateral are loans you can access without having to present an asset for loan commitment. Banks look at your income, cash flows, and credit history first before consideration. Moreso, for business loans, they look at the strength and stability of your business. Some banks also put into consideration your long relationship with them.

Having to look at these criteria, they approve your loan. When you cannot repay, they have agents that work for them. These agents will send you a notice upon term expiration. 

Banks in Kenya that give loans without collateral 

Some banks in Kenya give loans without collateral and they include:

  1. Commercial Bank of Africa: they offer SME loans without collateral to young entrepreneurs and other businesses. With flexible repayment terms and less interest rate.
  2. KCB bank Kenya: KCB bank Kenya offers personal and SME loans to businesses. A repayment period of 12months with 9% interest rate 
  3. Diamond Trust bank: you can access personal, business and salary advance of up to Ksh. 30,000 to Ksh. 250,000.
  4. Cooperative Bank of Kenya: They give loans for personal use without presenting any commitments. All you need is a good credit history amidst other requirements.
  5. NIC Bank: they render quick loans to customers daily. Open an account with them and have a strong means of repayment.
  6. National Bank of Kenya
  7. Standard Chartered Kenya

How to apply for bank loans without collateral. 

  1. Visit the bank’s website or office and fill the application form
  2. Apply for the loan and supply all personal details 
  3. Submit all necessary documents 
  4. Wait for loan approval and if approved, have your loan within 24hrs 

What determines your eligibility for bank loans without collateral 

Your eligibility for bank loans without collateral are:

  1. Be 18years and above with proof of strong income, cash flow and business record.
  2. Posses a national ID 
  3. Have a valid phone number
  4.  Strong credit history 
  5. Some banks also determine your eligibility by your long-standing relationship with them. And also by having an account with them for a certain period.

Requirements for banks’ loans without collateral 

Below are the requirements needed. There are lists of requirements for banks who offer loans without collateral. They are:

  1. National ID card
  2. 6 month’s statement of account 
  3. Payslip
  4. Business record, licence and certificates for business loans
  5. Passport photograph
  6. KRA pin certificate 

Types of loans you can get from a bank without collateral 

The type of loans you can get from a bank without collateral are:

  1. Personal loans 
  2. Unsecured loans 

Other loans you can get from the bank without collateral 

  1. Business loans 
  2. SME loans
  3. Salary advance

Conclusion 

With the current pandemic and poverty in the economy, you can cling to banks for loans without collateral. It is important to note all the requirements for you to have a good chance. We conclude with the facts that accessing credit without collateral does not have to be an avenue to abuse the privilege. Make repayment so you won’t have to worry when next you need a loan.

How To Apply For Quick Loans in Cooperative Bank Kenya

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Let us learn how to apply for quick loans in co-operative bank Kenya. Many people in Kenya, both salaried and non-salaried, have different needs in life. Some of these needs tend to be urgent and require swift action, while others seem to need slow action.

Kenyans seek money in different places. Individuals with bank accounts take salary advances and loans from banks and pay back after they get paid.

This is therefore why Co-operative Bank of Kenya understands this and has therefore made provision for loans for various needs of Kenyans. 

About Co-operative bank loan

The Co-operative Bank of Kenya is a publicly listed bank, aiming to be Kenya’s foremost bank with a strong national presence. Incorporated under the Company Act in 1965 and also licensed to carry out banking business under the Banking Act in Kenya.

Subsequently, companies of Co-operative bank Kenya runs three subsidiary companies, namely:

  1. kingdom securities limited: a stockbroker with a 60% controlling stake in the bank.
  2. The bank owns the fund management subsidiary Co-opTrust Investment Services Limited.
  3. Co-op Consultancy & Insurance Agency Limited (CCIA): A subsidiary wholly owned by the bank that specializes in corporate finance, financial advisory, and capacity building.

How do I qualify for a co-operative bank loan Kenya?

  1. 18years and above
  2. Original National Identity Card
  3. Original KRA PIN Certificate
  4. Salary pay slips for the last 3 months.
  5. Filled loan application form.

How to apply for co-operative bank Kenya loan 

To apply for co-operative bank loan, check round their website and download the form. You can also visit their physical branch and have then guide you on loan application 

Loans offered by the Cooperative Bank of Kenya

Loans offered by co-operative bank of Kenya are:

  1. Personal loans 
  2. Bizwise SME loans
  3. Co-op bank Flexi loan (salary Advance)
  4. Insurance finance loans

Personal loans

Personal loans offered by Co-operatives have been designed with features that facilitate the purchase of specific goods and services. In this regard, customers can get a Co-operative Personal Loan to buy shares on the NSE, to Top-up their loan balance to the original amount. To also finance the expansion of dairy production for dairy farmers or even for Sacco to on-lend to members.

Enhanced Benefits:

  1. The Maximum borrowing limit for unsecured loan raised to Ksh. 3 million.
  2. Maximum repayment period extended from 36 months to 60 months for loan amounts above Ksh. 100,000

Features:

  1. Minimum loan amount of Ksh 50,000
  2. Maximum loan amount of Ksh 4,000,000
  3. Maximum term of 72 months
  4. The purpose of the insurance policy includes education, medical, furniture, consumer durables, motor vehicles, plot purchase, holidays and shares.
  5. Credit scoring serving as a determinant for the appraised value of applications.
  6. Applications approved within 48hours.

Business/Bizwise SME loan

They provide small and new businesses the funding they need to grow. Small business owners can apply for the loan and the rates are affordable.

Their business expansion loan enables you to open new branches and launch new products. You can also finance the purchase of equipment, and purchase assets like land, buildings, and motor vehicles. The Bizwise SME loan can be up to 50 million.

Requirements:

  1. Need the applicant to have operated a business current account in Co-op bank for at least 6 months.
  2. Provide the bank with bank statements 
  3. Business Registration documents such as a Certificate of incorporation, Memorandum e.t.c.

Co-op Bank Flexi Loan (Salary Advance)

Don’t worry about surviving a tough month with Co-op Bank. Co-op Flexi Cash lets you borrow between Kshs 3000 and 100,000 for emergencies or short-term expenses.

This product has an interest rate of 1.16% and is repayable for not more than three months. The Co-op Flexi Cash has no additional security requirements. And, if you apply through MCo-op Cash, you will not incur any facilitation fees. You must have an active salary account with the bank for at least six months to qualify for Flexi Cash.

Insurance Finance Loan

This loan is given to people with insurance policies who need to pay their monthly premiums. Essentially, a lump-sum premium payment is made to the insurer on your behalf by the bank leaving you to pay the loan back in simple monthly installments at very competitive interest rates. The bank also offers flexible repayment options between 4 months and 10 months.

Benefits:

  1. The benefit of the loan is that it was tailored to fit the individual cash flow needs.
  2. Funds are freed up, giving you the liquidity you desire.
  3. Quick approval and simple application process, and no security required. 
  4. The minimum amount to be financed is Ksh 15,000 and there is no maximum. 
  5. Anyone can apply, and almost any insurance finance policy is covered. 

How to apply for Co-operative insurance Finance loan

You can apply at any Co-op bank branch countrywide or through your insurance broker.

The Co-op mobile banking App

Co-operative is banking on the mobile service to grow earnings from transaction charges. M-Co-op Cash charges a one-off seven per cent fee for secured personal loans between Sh100,000 and Sh200,000 repayable within 30 days.

Features of the app

  1. Apply for a loan
  2. Send money to other mobile money services, for example, M-PESA.
  3. More than 100k downloads 

Co-operative bank loan Calculator 

The Cooperative Bank of Kenya loan calculator is available online to customers, and helps them calculate the total cost of the loan, the start and completion dates as well as the monthly installments. With a customized calculator, you can choose your repayment period and monthly installment for each loan type.

How to repay your co-operative bank loan

You can repay by funding your account and having the money automatically deducted 

Or

By visiting the bank and asking for a different option. 

How long does it take to process a loan in a co-operative bank?

The duration of the Co-operative bank loan usually depends on the type of loan one wishes, such as personal loans, business loans, SME loans, and others. Most loans are approved within 24 business hours. 

Conclusion

In Kenya, Co-operative banks are offering guaranteed loan approval all over the county. They are very different from the banks or those finance agencies where the loan applicants have to struggle a lot to borrow money.

Their application procedure is so simple and straightforward. Borrowers are free from documentation hassle. 

Co-operative bank has a team of loan experts and insurance finance brokers who have immense experiences in helping people out from their financial emergency.

Debt Consolidation Loans in Kenya Explained

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Imagine being able to take a loan to cover your debts and liabilities. As strange as it sounds, it’s real as it gets. With favourable terms of the loan which include a lower interest rate, lower monthly payment, or both.

Individuals can use debt consolidation loans as a tool to deal with student loans and other forms of liabilities.

What is a consolidation loan? 

We can see the term debt consolidation as the act of taking out a new loan to pay off other liabilities and consumer debts. These loans are generally unsecured ones. Here they combine multiple debts into a single, larger piece of debt, usually with more favourable payoff terms. These favourable payoff terms include a lower interest rate, lower monthly payment, or both. Consumers can use debt consolidation as a tool to deal with student loan debt, credit card debt, and other liabilities. 

Key things to know about consolidation loans?

  • Debt consolidation is means taking a loan to pay off other debt and liabilities. 
  • Debt consolidation loans do not entirely erase the original debt. They only transfer a benefactor’s loan to a different lender or type of loan.
  • There are two major types of debt consolidation loans. They include secured and unsecured.
  • Benefactors can apply for debt consolidation loans, lower-interest credit cards, and special programs for student loans.

How does debt consolidation loans work?

As stated above, debt consolidation is the act of using a different form of financing to settle other debts and liabilities. When a consumer is saddled with different debts, they can apply for a loan to merge those debts. Those debts are standardized into a single liability and paid off. They then make payments to the new debt until the debtor settles it in full.

Most consumers can apply through their bank credit union, or credit card company as the first step of the application process. A consolidation loan is a great way to start, especially if you have a great relationship and payment history with your institution.

An important point to note is that debt consolidation loans do not entirely erase the original debt. Instead, they simply transfer the benefactor’s loan to a different lender. For actual debt relief/ or for those that don’t qualify for loans, it’s advisable to look into debt settlement. Debt settlement is available to reduce consumer’s obligations rather than the number of creditors.

2 Types of Consolidation loan

There are two major types of debt consolidation loans. They are secured loan and unsecured loans.              

Secured loans are usually backed by the borrower’s assets, such as a house or a car. The asset here works as collateral for the loan.

Unsecured loans are not backed by any asset. This type of consolidation loan is usually very difficult to get. They also have higher interest rates and lower qualifying amounts compared to other forms of loans. 

With either of the loans, interest rates are typically lower than the rates charged on credit cards and other forms of loans. Also, in most cases, the rates do not fluctuate, so they do not vary over the repayment period.

Requirements for getting a debt consolidation loan?

Before qualifying for a consolidation loan, applicants must;

  • Possess a letter of employment,
  • Have two months’ worth of statements for each credit card or loan you wish to pay off.
  • Possess letters from creditors or repayment agencies.  
  • Provide a copy of the latest bank statement, reflecting three salary deposits 
  • Have the income and creditworthiness needed to qualify, especially if you’re going to a brand new lender.

Although the documentation you will need often depends on your credit history, the aforementioned documents are quite essential.

Advantages of consolidation loans

The following are the major importance of consolidation loans;

  • Debt consolidation is a great tool for people who have multiple debts with high-interest rates or monthly payments.
  • Debt consolidation loans can help your credit score. Settling the portion of the principal loan sooner can keep interest payments low. This means less money out of your pocket. This can help boost your credit score, making you more attractive to future creditors. 
  • Taking a debt consolidation loan can give you a tax break chance. The internal Revenue Service permits deduction of interest on any unsecured debt consolidation loans.
  • Going through the debt consolidation process can reduce calls or letters from the collection process. As long as the new loan is kept up to date. 

Disadvantages of consolidation loans

Debt consolidation loans have their downsides too. These disadvantages include;

  • Debt consolidation loans have longer payment schedules. This means that applicants might pay more in the long run.
  • By transferring existing loans into a brand new one, there may initially be a negative impact on the consumer’s credit score. This is because credit scores favor longer-standing debts with longer, more-consistent payment histories.
  • Ending the old credit accounts and opening a single new one may reduce the total amount of credit available, raising the debt-to-credit utilization ratio.
  • Consolidation loans can also cause potential loss of special provisions such as interest rate discounts and other rebates.

Conclusion 

Debt consolidation rolls and tackles multiple liabilities and debts, typically high-interest debt such as credit card bills, into a single payment. Debt consolidation might be a great idea for you, especially if you can get a lower interest rate. That will help you reduce your total liability and reorganize it so you can pay it off faster.

Loans and Advances Explained – Meaning and All You Should Know

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The need to make a sound financial decision when borrowing funds for your personal or organisational need cannot be over emphasized. Basically, when individuals choose to go for funds to expand a business, personal need and purchase of land, the best option is a loan.

But when institutions seek to raise a short-term find to cover salary, purchase of materials and other office expenses, an advance is the best.

Stay tuned. We will discuss the differences between the two terms and in this article. 

loans-and-advances-in-kenya

What is a Loan?

A loan is a sum of cash or fund that you borrow and expected to pay with an interest on a specific due date. A loan is also an act of lending of money by individuals, financial institutions, and other entities. Some even borrow airtime.

The borrower incurs a debt which 8sbmwant to be repaid. The lender and borrower agree on the interest rate and repayment terms.

Moreso, loans are often secured with a collateral, credit score and other required entries which helps to reduce the risk of the loan.

Objects of Loan Contracts 

Contracts of loans includes objects like:

  1. The principal amount
  2. The repayment amount
  3. Number of repayment duration 
  4. The repayment terms and
  5. Collateral, if there is any.

Types of Loans

Types of loans include:

  1. Secured loans
  2. Unsecured loans
  3. Personal loans
  4. Fixed-rate loans 
  5. And variable rate loans

What is an advance 

An advance is a means of finding rendered by the bank to other institutions or entities to meet up a short-term need (often less than a year). 

Facilitation in advances 

The key facilitation of advances includes:

  1. Primary security: This includes the promissory notes, and here the bank stands as a priority to repay the loan before any other parties involved. 
  2. Collateral loan: This is more like a mortgage of property like land, buildings and other fixed assets.
  3. Guarantees: It is given by the partners, promoters, chief executive officers and so many others.

Types of Bank Advances 

Types of bank advance we have are:

  1. Short-term loans 
  2. Overdraft 
  3. Bill purchase
  4. Cash credit 

Conclusion 

Normally “Loans” and “Advances” are seen as “Loans”. But technically, and for all things balanced, the two terms are distinct.

As it stands, a company or an individual who needs funds for personal use or capital projects shall get a loan.

The agreement is between the borrower and the lender and the latter agreeing to pay the sum with an interest. But a company needs to solve a short-term financial need shall go for an advance. So loans and advances have been explained properly in this article.

How To Qualify For KCB Loans- All you Should Know

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We would be looking into how to qualify for KCB loans in this article. The KCB loan application process is simple and anybody who meets the requirements has already qualified for the loan.

Customers can borrow from KCB for a variety of amounts ranging from ksh.1,000 to Ksh. 1,000,000. Their loans are accessible and affordable. Read along to understand more about this topic.

About KCB Loans Group

KCB Group is a licensed banking institute and a registered non-operating holding company. It started operations in January 1, 2016. The holding company oversees KCB Kenya. KCB Kenya renders financial services to the people.

They have different types of loans that suits various needs. KCB group has regional units in Uganda, Tanzania, Rwanda, Burundi, Ethiopia and South Sudan. It also owns KCB Insurance Agency, KCB Capital, KCB Foundation, National Bank of Kenya and all associate companies.

How Do I Qualify for a KCB Loan?

What KCB needs from you to qualify for the loan include: 

  1. Valid Kenyan ID or passport.
  2. Recent original Payslips.
  3. Evidence of source of income for self-employed persons.
  4. Be an active KCB account holder for a minimum of 6 months
  5. For credit card advance, possess a KCB financial card

Eligibility to Qualify for KCB Loans

  1. Be 18years and above
  2. Have a valid national ID
  3. Possess a registered sim

How Long Does it Take to Process a KCB Loan?

KCB loans are gotten once you qualify and are done with the application. At most, expect it within 7 working days.

Different Categories of KCB Loans

  1. Personal secured loans
  2. Personal mobile loan 
  3. Unsecured checkoff loans
  4. Emergency loans
  5. Salary advance 
  6. Business loans
  7. Sharia Compliant personal loans 

How to Apply For KCB Loan 

Applying for KCB M-pesa loan is simple. Just follow the steps below:

  1. Visit the website to apply from there
  2. Fill all required information
  3. Get a feedback, apply and Submit all documents if requested for
  4. Wait for approval, if approved, you get your loan within a few hour

Conclusion

KCB loans are easy to qualify for once you meet all the requirements. It is also very easy to get the loan. Go ahead and apply once you meet the requirements.

There are also different types of loans available. Every loan type serves a purpose for a particular goal. Take advantage of KCB loans and all the features that come with them.