Before assuming that a loan is unaffordable, you need to educate yourself on all the alternatives available to it. Ask yourself, how can I qualify for a loan in Kenya?, and then make the decision whether you can afford to get the loan and pay back. While loan eligibility and requirements can scare off first-time borrowers, it is important to understand that there are other options and different types of loans available.
Let us discuss how to qualify for a loan in Kenya.
Qualifying for loan
Loan qualification, simply put, is the measure of the quality of a loan standards outlined, that banks and other financial institutions use as part of their underwriting process. In deciding whether to approve a loan application, lenders use qualifying ratios, which compare a borrower’s debt obligations with their income.
Note: you can not get a loan you do not qualify for.
How can I qualify for a loan
How I can qualify for loans in Kenya are:
- By checking your credit score. Having a good credit score qualifies you for an unsecured loan.
- Get a copy of your credit report.
- Pay up all outstanding bills if there is any
- Show willingness to pay early and evidence of last early repayments.
- Show proof of a stable income.
- Finally, research and find the right lender.
What disqualifies you from getting a loan?
- Too Much Debt
- Unacceptable credit score
- Inadequate monthly income
- Fluctuating employment
Eligibility to qualify for a loan in Kenya
- Be 18 years and above
- Have a national ID number
- Posses a registered phone number
- Some loan platform request for M-Pesa account
- Have a unique and valid account number
How do I qualify for a bank loan?
Almost every lender will check your credit score and report. An improved credit score will typically result in a better rate and more favorable loan terms when lenders review your application. Qualifying for a bank loan in Kenya is the same as qualifying for a loan as mentioned in this article except some few other documents that will be required. The documents are:
- 3 months Payslips
- A guarantor or a joint application with a creditworthy cosigner
- 6 months Bank statement
What are the qualifications for a personal loan?
Lenders determine whether you qualify for a personal loan based on your
- Credit score
- Payment history and
What do lenders use to determine who qualifies for a loan?
Lenders determine who gets a loan, how much they’ll loan, and what the interest rate will be based on three fundamental factors:
- Capacity, and
Getting a personal loan can be a good choice if you need to cover unavoidable and urgent expenses. You can use the fund to make investments that will pay off in the future (e.g. home improvements that will increase the value of your house). In order to qualify for a loan, you need to first review your credit score and credit report. Then check your:
- Payment history.
- Outstanding amount.
- Length of credit history.
- Credit mix and
- Recent credit.