By Isaac Blessings
Bank loans in Kenya vary depending on different factors like negotiation fees, excise duty charges, appraisal fees, legal fees and credit life insurance charges. According to the information released by the Kenya Bankers Association (KBA) in partnership with the Central Bank of Kenya (CBK), Kenyans could save up to Ksh 100,000 depending on the lender they choose. Below is a list of some of Kenya’s Banks that offer the cheapest loans.
Bank of Baroda
The Bank of Baroda offers the cheapest loans in Kenya with a credit cost of Ksh 70,794 that comprises the interest charges only for a Ksh 1 million loan. This is from Ksh 60,580 that the bank was charging in March 2020 at an interest rate of 11 percent. The bank doesn’t offer legal fees, insurance charges or processing fees. For instance, taking a Ksh 1 million loan at the Bank of Baroda will save you a whopping Ksh 82,427 compared to the one taking a loan of the same amount at ABSA Bank. The Bank of Baroda has an Annual Percentage Rate (APR) of 12.82 percent.
KCB Bank
The Kenya Commercial Bank which is the richest bank in Kenya in terms of assets is the only top tier bank ranked in the category of the cheapest lenders. The state-owned bank has an Annual Percentage Rate (APR) of 19.91 percent. In March 2020, the bank offered a personal secured loan worth Ksh 1 million at a cost of Ksh 71,807 but it has recently updated its charges to include non-interest charges bringing the total cost to Ksh 107,207. The charges are broken down into Ksh 25,000 appraisal fees and Ksh 5,400 as credit insurance fees. KCB Bank recently disclosed that at least 70 percent of their deposits do not attract interest fees and only charges a 2.5 percent negotiation fee.
Also Read: KCB CEO Joshua Oigara Biography, Age and Family, Education, Positions, Salary and Net Worth
First Community Bank
The First Community Bank also found its way in the list of banks offering cheap loans in Kenya. The bank doesn’t offer non-interest charges to any of their loans. According to the Kenya Bankers Association (KBA), taking a Ksh 1 million personal and secured loan repayable in 12 months will cost the borrower Ksh 71,807 only which amounts to the interest charges.
HF Bank
The Housing Finance Group Bank makes it to the list of banks offering cheap loans in Kenya as of 2022. The bank has favorable qualities such as no early repayment penalties and competitive interest rates on reducing balance. The bank doesn’t include non-interest charges in their different types of loans. For instance, a borrower applying for a personal secured loan worth 1 million Kenyan shillings to be repaid within 12 months will only incur a cost of Ksh 71,807 which is the interest rate.
Jamii Bora Bank
The bank offers different types of loans at a lending rate of 12.3 percent. If you apply for a Ksh 1 million personal secured loan that should be repaid within a period of 12 months, you will only be charged an interest cost of Ksh 71,807/=.
Credit Bank
The Credit Bank Limited offers access to different types of loans at a 13.1 percent interest rate. The bank doesn’t charge any non-interest charges such as negotiation fees, legal fees or appraisal fees thus making it one of the cheapest banks to get a loan from. Borrowing a Ksh 1 million personal and secured loan repayable in a span of 12 months will have you incur an interest rate of 71,807 Kenyan shillings only.
Transnational Bank
The Transnational Bank also appeared in the cheapest loan banks list released by the Central Bank of Kenya (CBK) in conjunction with the Kenya Bankers Association (KBA). The bank only charges interest fees omitting other charges like processing, appraisal and legal fees. It will only cost you Ksh 79,589/= to get a personal secured loan worth 1 million Kenyan shillings to be repaid within 12 months.
Bank of India
The Bank of India which is one of the oldest banks in the world also found its way in the list of banks offering cheap loans in Kenya. The bank has an interest rate of 3.25 percent for loans that are payable in less than a year. It also doesn’t charge additional fees such as negotiation fees, legal charges and insurance costs. A Ksh 1 million personal and secured loan that is payable in a span of 12 months will only incur a cost of Ksh 83,807/=.
Habib Bank
The Habib Commercial Bank was also considered as one of the banks offering cheap loans in Kenya. The bank has a 12.5 percent interest rate to all of their loans available. The bank only charges the interest charges and doesn’t include any other additional charges to their loans. It will cost you Ksh 83,807/= only to get a personal and secured loan worth Ksh 1 million expected to be repaid within 12 months.
Victoria Bank
The Victoria Commercial Bank closes for us the list of top ten banks offering cheap loans in Kenya as of 2022. The bank offers loans at an interest rate of 13 percent per annum and has also omitted the non-interest charges such as legal and insurance fees. A borrower applying for a personal secured loan worth Ksh 1 million to be repaid in 12 months will only be charged Ksh 83,807 which is Ksh 86,880 less than at Family Bank which was ranked as the most expensive bank in Kenya.
