Loans aren’t always a bad idea if you go about it right. Technology has revolutionized loans, making them accessible with a few taps on your phone. Our goal is to educate you on loan application and agreement forms and how to write a simple loan agreement.

What is a Loan Agreement?

Informally, a loan agreement is a contract between two parties – a lender and a borrower defining the conditions of the loan. In the event that one of the parties fails to fulfill their obligations, the other party may enforce the loan conditions in court.

In return, the borrower promises to repay the lender the loan at a later date, possibly with interest. Moreover, the lender cannot suddenly decide not to lend money to the borrower, especially if the borrower made a purchase with the expectation of receiving money soon from the lender.

What is a Loan Agreement Form

A Loan Agreement is a document that is signed between two parties that want to get into a transaction involving a Loan. The loan agreement document is signed by a Lender (the individual or company giving the loan) and a Borrower (the individual or company receiving the loan).

Loan application 

A loan application is a procedure for obtaining a loan. Applicants for a loan use loan applications to request financing. Borrowers reveal key information in their loan applications. An application for a loan is critical to determining whether the lender will approve the loan or not.

What should be included in a loan agreement?

1. Details of the borrower 
2. About the lender
3. Loan amount 
4. Interest rate
5. Repayment date and duration 
6. Collateral 
7. Late charges
8. Other fees like origination fees, legal fees, insurance fees, etc.
9. Prepayment for a discount
10. Governing law in case there is a problem with the agreement 

Personal Loan Agreement form template 

The loan agreement sample below details an agreement between a borrower and a lender. The lender agrees to give the borrower a loan, who agrees to pay back the loan according to the conditions specified.

How do I write a simple loan agreement?

Here are 6 easy steps to writing a personal loan agreement:

1. In starting the Document, write the date at the top of the page. 
2. Write the terms of the Loan and state the purpose of the personal payment agreement and the terms for returning the money. 
3. Date the Document of Agreement
4. Sign the Document
5. Record the Document

Who Needs a Loan Agreement?

1. Borrower 
2. Buyer of a home
3. Buyer of a car
4. Seller of a home or a car
5. Investors 
6. Business men
7. Family members 

When To Use a Loan Agreement Form

Often, relying on only a verbal promise can result in one person falling short. A written agreement can specify a loan’s terms and the amount of interest owed by the borrower. 

Here are some situations where you may need a Loan Agreement:

1. Starting a business and need a capital loan
2. Purchasing land or a home with a real estate loan
3. Investing in a higher education or repaying a student loan
4. Buying a new car or boat for personal reasons
5. An employee loans from their employer
6. Helping a friend or family out with a personal loan

Sample loan agreement in Kenya

The loan agreement template in Kenya addresses the following details:

1. Who: The borrower and the lender, or the person taking money and the person giving money
2. What: The amount of money or “principal” that is being borrowed, and whether interest or a percentage of the principal is also owed
3. When: The duration of the loan or date the principal and any interest should be repaid back to the lender.

Conclusion 

Borrowing money could be one of the best decisions you ever make. Those trying to apply for a loan often do not know how to go about it. In contrast to traditional loan applications at banks that take a lot of time and are filled with procedures, online applications are far easier. Find out how to write a loan agreement, how to complete a loan application, and when to use a loan agreement form. With all these, you are good to go.

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?

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:

• Personal loans
• Student loans
• Unsecured credit

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.

Private money lenders in Nairobi believe that in tough times and in need of financial help, the last thing to do is worry about where to get a loan. Mobile banking is rampant in Kenya.

Some of these private lenders operating mobile banking systems have their primary offices in Nairobi. Nairobi is in the heart of Kenya.

Private money lenders give out online, business and secured loans to the people in the city. Their priority is to give you money when you need it.

We will take you through private money lenders in Nairobi.

Who is a private money lender

A private money lender is an independent person or organization rendering financial services to the people. They give out loans to investors and customers to solve distinct problems. They also give out different loans.

In addition, they provide platforms both online and offline where you submit application loans. At the end of the month, you pay back the loan with a stipulated interest. They are almost an opposite to getting commercial loans.

List of Some Private Loan Lenders in Nairobi

This is the list of some private money lenders in Nairobi. They are:

1.  Izwe loans – Kabarsiran Avenue, Nairobi Kenya
2. Rudisha instant loans- Gikomba market road, Nairobi Kenya 
3. Instant loans on items – Jevanjee Garden shopping Mall along Moktar Daddah Street, Nairobi 
4. Eclof Kenya- 73 ground floor, Kubrick, spine road, Nairobi Kenya.
5. GetBucks Kenya- 300 Tom Mboya St, Nairobi.
6. Samchi Credit Limited- Parklands/Highridge Parklands Parklands Plaza, Nairobi, Kenya.
7. Mombo app -13th Floor Argwings Kodhek Rd, in Landmark Plaza, Nairobi.
8. Kenya Ecumenical church loan fund – P. O. Box 34889, Nairobi, Kenya.
9. Mwananchi credit limited– Ecobank Towers’ 10th Floor, Kenya.
10. Loan millennium Place Shop 11 opposite Quick Mart Supermarket along Mumias South Road, Kenya.
11. Housing finance- 03 Koinange St, Nairobi, Kenya.

How to Become a Private Money Lender in Nairobi

To Become a Private Money Lender in nairobi, these are the things you need to do:

1. Start and establish your business and obtain the required insurance cover.
2. Meet and discuss with a talented lawyer about the lending structure 
3. Look out for your preferred lending attention.
4. Join a peer-to-peer lending group to find possible borrowers.
5. Test any potential customers by calculating returns and risk.
6. Then begin your private lending business. 

Functions of Private Money Lenders 

Different functions of private money lenders in Nairobi are:

1. They provide quick, personal and unsecured loans
2. Render advice on how to pay back your loans.
3. They also render other products aside from loans. Products that range from savings, airtime, etc.
4. They help upload your credit scores to CRBs, where you can quickly access them.

Types of Loans by Private Money Lenders

There are different types of loans provided by different private lenders in Nairobi. They are:

1. Personal loans
2. Unsecured loans
3. Business loans
4. Online loans
5. Civil servant loans
6. Car logbook loans

Documents Required by Private Money Lenders

The list of documents required by private money lenders in Nairobi are:

1. National ID
2. Letter of undertaking and Recent passport by some lenders.
3. Employment card for civil servant loans
4. Logbook documents for car logbook loans

 Elements in Private Money Lending 

There are three basic elements in private money lending. They are:

1. The lender: The is the private individual lending to investors and the public
2. The borrower: The borrower is the person who applies for loans from the lender.
3. Paperworks: This the platform that holds the agreement between the lender and the borrower.

How Private Money Lenders Get Paid

Private Money lenders get paid through the following ways:

1. Interest rate and
2. Application and extra fees.

Tips to Becoming a Private Money Lender in Nairobi

Simply put or state that private money lenders acts as a bank for other investors and the general citizens. It is beneficial, but there are certain tips to note. The tips are:

1. Start out small
2. Know what you are going into/subject matter
3. Be transparent
4. Find an excellent attorney
5. Be familiar with changes in the system.

Conclusion

Given the points above, private lending system in Nairobi has several benefits. If done properly, customers will know you and you explore from there.

With this in mind, they lend their own money to other citizens because they look forward to getting interest. Coincidentally, private money lending serves as an alternative to traditional lending institutions.

In conclusion, there are a lot of private money lenders in Nairobi that are transparent, find them out and secure a quick loan when you need one.

When you are looking to buy a house or own a home and you don’t have enough to fund it. You can take up a home loan in Kenya.

Home loan enables you to buy lands or build your dream house. Get your documents ready and be honest with every single detail. Have a consistent income. Then you are ready to take up a home loan.

We will take you through a home loan application and all you need to know.

What is a Home Loan?

Home loan is a loan designed to help individuals own a house or purchase and develop commercial properties.

It is a loan taken to purchase plots of land to rent out for commercial usage or private usage. With a home loan, you can become a landlord in a few years after repayments. 

General Features of a Home Loan

1. Home loan is only for construction of a new house or purchase of a ready-to-move-in property
2. Interest rate is low compared to mortgage 
3. Typically, between 0.8% to 1.2% of the loan value
4. Up to 30 years

Difference between home loan and mortgage loan

Home loan is a loan for buying or constructing of houses while,

Mortgage loans are loans taken against a property that the borrower already owns.

How do you qualify for a home loan?

To qualify for a home loan, you need:

1. Credit score of at least 620 points and above 
2. APR and DTI ratio should be less than or equal to 50% to qualify for a home loan.
3. Have a consistent income flow
4. Be ready and willing to reveal everything single truth and present all documents required. 

Credit score for a home loan

You need a credit score of 620 and above. It involves enormous sums and lenders are not ready to lose or give out their fund just like that. You need to have a good credit score to qualify. 

How to improve your home loan eligibility 

To improve your home loan eligibility:

1. Check out for errors on your credit report 
2. Ever ready to respond to your lender

How to get your home loan approved

Because of the enormous sum involved in home loans, lenders conduct strict observation and scrutiny before disbursements. To get your home loans approved, you need to;

1. Be aware of your financial situations
2. Make a higher down payment
3. Have a good credit score
4. You can use a co-applicant like your parents
5. Keen details to application forms and documents.

Some home loan lenders in Kenya 

Some home loan providers in Kenya include:

1. HF groups
2. KCB
3. NCBA Bank
4. Stanbic Bank of Kenya

The HF groups 

They are private lenders that give out home loans in Kenya. 

Features

1. Up to 90% financing of the selling price or value
2. Maximum loan term of up to 20 years for employed individuals and 10 years for SMEs and groups
3. Product is for outright purchase of a home

Benefits

1. Our Home Loan provides you with an affordable way to buy a home with
2. Loan repayment duration of up to 20 years for occupied homes there is tax relief for customers
3. Mortgage protection cover in case of death or disability
4. Includes insurance cover for fire

Requirements for Employed Persons

1. National ID 
2. Passport copies
3. KRA PIN Copy
4. 3 months payslips
5. 6 month’s salary bank account statements
6. Letter from employer

Requirements For Self-Employed Customers

1. National ID
2. Recent Passport photograph
3. KRA PIN Certificate
4. 3 years audited books of account
5. 1 year bank statements
6. Certified copy of partnership deeds (for partnerships) and Rental schedules (for landlords)

Fees & Rates

1. Commitment Fee of 1.5%
2. Valuation fee of approximately 0.5%
3. Legal Fees of approximately 1-2%
4. Stamp duty of 4%

KCB bank

The KCB is one of the biggest banks in Kenya, with a strong capital and assets base that provides a home loan.

KCB home loans features:

1. Appraisal fees at 2.5% of loan amount
2. Ledger fees of Kes 350 per month
3. External Application Fees
4. Mortgage Plus Fees
5. Negotiation Fee of 2.5% of loan amount
6. Ledger Fee of Kes 350 per month.
7. Legal and valuation Fees
8. Stamp duty at 4% of cost of property or value on the open market
9. Stamp duty on charge at 0.1% of loan amount
10. KCB can finance insurance premium
11. Charges are not inclusive of tax

Visit their website to find out more about KCB KCB loans 

NCBA bank 

NCBA home loans features

1. Competitive Mortgage interest rates
2. Friendly loan terms
3. Loan repayment periods of up to 25 years.

Features

1. Mortgage loan facilities of the loan amount in local currency, 1.5% of the loan amount in foreign currency.
2. They offer NCBA mortgage loans in Kenya Shillings, Dollars, Pounds, and Euros.
3. 105% Financing of property value or market price, whichever is lower.
4. Maximum term of up to 25 years.
5. They calculate home loan Interest on a reducing balance basis.

Stanbic Bank home loans

Stanbic Bank home loan features:

1. Up to 105% finance of properties below Kes. 20M
2. Up to 100% of finance for construction of single residential houses below Kes. 20M
3. Loan tenure–up to 20 years (240 months)
4. Debt to income ratio–should not exceed 50% of net salary
5. Minimum loan amount–Kes. 1M
6. Minimum property value–Kes. 3M
7. Free cover limit for loan amount Les. 30M and below
8. Only available to salaried customers in local currency

Visit their website to read up more 

General requirements for a home loan

1. A completed and signed mortgage application form.
2. Your Original ID/Passport (plus copies)
3. 6 months certified bank statement.
4. 3 months’ pay slips.
5. Sale agreement or letter of offer(for purchase mortgage only)
6. Letter of introduction from an employer.

Benefits of home loans

Benefits of home loans include:

1. Easy repayment 
2. Mortgage cover
3. Fire insurance cover from some lenders 
4. Longer repayment duration 
5. Tax relief from some financial lenders.

Simple ways to make easy repayment 

Ways to make easy repayment of home loans:

1. Pay a down payment of over 20%
2. Make a part payment
3. Go for short tenor repayment duration 
4. Choose a lender with low interest rate
5. Never miss your monthly repayment 
6. Take advantage of home tax exemption

How to repay home loans

There are general ways of repaying home loans. Different lenders have different ways of collecting their loan repayment. They include:

1. Login or locate your M-Pesa account 
2. Select paybill 
3. Enter the business number
4. Enter your phone number as your account number 
5. Type in the amount you want to repay
6. Enter M-Pesa pin
7. Confirm details and press ok
8. Repay your home loan

Note: you can also repay through your bank account. By writing a standing order to your bank or transferring directly to the lender’s account. 

Conclusion

During the home loan application process, it is pertinent that you reveal all information which applies to your personality. Be true with it. Know what you are going for and every single detail. If not, they might reject your Home Loan application. If you are not sure about your eligibility, you can use Home Loan Eligibility Calculator to avoid Home Loan rejections.

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.