This article will learn about the rates associated with checkoff loans in Kenya. You will also learn about the benefits of checkoff loans and how to get one. Many people are unaware of what checkoff loans are and their rates. We will clear that up for you in this article.
I know there comes a time in our lives when we are in dire need of financial assistance, and we don’t know where to turn. I have been there before, and it’s not a pleasant feeling. Fortunately, there are options available to us, one of which is checkoff loans.
What is a Checkoff Loan?
A checkoff loan is a loan made available to employees of a company that has signed an MOU with a lending institution.
The loan repayments are deducted directly from the employee’s salary and sent to the lending institution.
The employer is responsible for remitting the loan repayments.
Checkoff loans are convenient because they are easy to obtain, and the repayment process is automated. However, they can be expensive, as the interest rates are often high.
Employees should carefully consider whether a checkoff loan is suitable before taking one out.
Why take a Checkoff Loan?
- Checkoff loans are quickly processed within the shortest time.
- Sometimes an employee can enjoy a lower interest rate depending on the negotiation between the employer and the bank.
- Moreover, one must not present security to get a checkoff loan. The only proof of employment is needed.
- Repayment terms are also more flexible than taking any other loan from the bank.
Checkoff loans Providers in Kenya?
There are many lending institutions offering checkoff loans in Kenya. The good news is that most employers might have an MOU with more than one lending institution. Therefore, making it easier for an employee to choose from a wide range of lending institutions to secure their checkoff loan.
1. Equity Bank Check-off loans
Equity Bank is the most popular lending institution with MOU with various companies to offer checkoff loans to their employers. There are no lengthy procedures to put up with before securing a loan.
Moreover, this checkoff loan has a repayment period of up to 12 months, and one can access up to KES 300,000.
One must present an introduction letter from your employer and copies of your payslip for the last three months.
2. Absa Kenya
Absa Group offers checkoff loans for employees whose employers have signed an MOU with them. Therefore, if an employee is experiencing a personal emergency, they don’t have to worry about it because Absa got them.
It’s worth noting that all that one needs to present to the bank before accessing this loan is copies of bank statements and the most recent payslip.
Features
- The repayment period is between 12 – 72 months
- No security is required to access the loan
- Absa Group offers competitive interest rates as compared to other banks
- One can borrow up to KES 6,000,000
- Through this loan, one will gain access to affordable life insurance.
3. Faulu Bank Kenya
Faulu Bank Kenya is very particular about the kind of employees it offers its checkoff loan. One has to be employed by TSC, the disciplined forces, parastatals, civil service, and county government.
Benefits
- This checkoff loan has a repayment period of 84 months
- One can borrow between KES 10,000 to KES 3,000,000
- The top-up feature is available.
4. Family Bank
The family bank is another financial institution offering Checkoff loans in Kenya. To be able to access this loan, one has to meet the following requirements:
- Present filled checkoff loan application form in duplicates
- Two recent passport size photos as well as three copies of ID
- Payslips for the last three months
- Their bank statements for the previous three months
- KRA pin certificate
Features
- One can secure up to KES 3,000,000 without security
- This loan is to be repaid within 72 months
- Enjoy insurance cover over disability and death
- Loan buy-off and top-up features are available.
5. KCB Checkoff loans
KCB Bank is well known for offering its customers the most innovative loan products and services. As a result, it has the most innovative checkoff loan product.
As long as one’s company is an MOU with KCB bank, one can access up to KES 4,000,000 without security at only a 13% interest rate.
The repayment period is within six years.
Moreover, it is straightforward to secure this loan as there are no long bureaucratic processes to be followed.
6. FinCredit Limited
They are committed to ensuring that you continuously develop financially and through the acquisition of skills. Their payroll checkoff loans are tailored to help you meet some long-term commitments such as purchasing a plot or car, paying for school fees, or meeting other financial needs requiring some significant cash.
The finCredit loan approval process is quick and easy.
Requirements
- Copy of ID/Valid Passport
- Copy of PIN
- Passport Photo
- Copy of Utility Bill
- Certified Payslips (3 months)
- Certified Bank Statements (6 months)
- Details regarding your two referees (next of Kin and a close relative, friend, or workmate) plus their ID Copies
7. Caritas- Microfinance Bank
Caritas Microfinance Bank is licensed and regulated by the Central Bank of Kenya. They offer a full range of innovative and customized financial solutions.
Features
- Competitive interest rates
- Quick approval process
- No penalty for early repayment
Conclusion – Checkoff Loans in Kenya
There are many financial institutions offering checkoff loans in Kenya. One must keep in mind that their employer must be in MOU with the financial institution before securing the loan.
