This article will review how one can get a plot loan in Kenya. These days, most Kenyan banks now offer plot loans for people who want to finance buying land in urban areas. It is a good option since most Kenyans buy a plot first and later build a home. A plot loan is the best option for buyers who want to take homeownership step by step.
How to Get a Plot Loan in Kenya
The following is a step-by-step guide to getting a loan to purchase that plot you’ve been eyeing.
Find a Lender
The first step is to find a reputable lender. A reputable bank is the most preferred lender for this type of loan since you will be guaranteed friendly interest rates and professionalism. Most of the tier 1 banks in Kenya offer residential plot loan offers.
After finding a lender, you must ensure you are eligible for the loan. Most banks require you to be a customer with them for at least six months. They also check your credit rating and determine whether you have a consistent source of income.
Find the Plot
Before applying for a plot loan, you must have the plot first. Banks prefer to finance properties in urban centres since they are valued highly. When looking for a plot, ensure it has the proper paperwork. You can consult a lawyer to make sure that the property is genuine.
Prepare the Paperwork
A lot of paperwork is involved before you can take a plot loan. You must prepare personal documents such as proof of income, ID card, Passport photograph and KRA pin. Before the loan is approved, you must have the proper documents for the land, such as the title deed and sale agreement.
Present the Paperwork for Verification
Once you finish the paperwork, it is time to present it to the bank. They will do their verification to ensure all the documents meet the qualification. Depending on the lender, This process will likely take two weeks to a month.
Accept the Offer
After you pass the verification process, the loan is approved, and you are presented with an offer. Once you accept the offer, money is debited into your account for the purchase of land.
5 Best Plot Loan Providers in Kenya
Equity Bank Plot Loan
Equity Bank offers customers a long-term loan to finance the purchase of a residential or commercial loan. The loan can be paid for up to 120 months, depending on the loan amount. The bank offers up to 100% for the plot purchase.
What documents do you need to qualify for this loan?
- Last three months verified payslips
- ID card and KRA pin
- Proof of employment from your employer
- Signed authorization form, loan application, and appraisal form
- Sales agreement and valuation report
- Title deed
Who qualifies for this loan?
- Ability to pay through a check-off system
- Employers with a memorandum of understanding with Equity Bank
Family Bank offers plot loans to individuals and groups interested in buying plots for future developments.
Who qualifies for the loan?
- Verified payslips for the last three months for employed applicants
- Six months of bank transactions for businesses
- Copy of title deed and sale agreement from the seller
- Passport size photograph
- Copy of National ID card and KRA pin
- Proof of employment from the employer
The National Bank offers residential plot loans for people looking to build their dream homes. This loan covers plots of loans up to 5 acres, and you can pay the loan for up to 10 years.
With this loan, you can choose the location of your property and enjoy the benefits that come with the loan gaining value over time.
Safaricom Sacco has been offering plot loans to their Sacco members. The Sacco gives you a loan amount three times your savings. You do not have guarantors for the loan. The title deed of the loan is used as security for the loan.
This loan has a maximum repayment period of 48 months. You get reducing an interest rate of 1% on reducing balance, and you can get a loan of up to Ksh 10 million.
Gulf African Bank
The Gulf Bank is a great financier for those who want to buy a residential plot in major urban areas. They can finance up to 70% of the property after doing a valuation.
The best thing is that they have an extended repayment period of up to 10 years, depending on the loan amount. Their plot financing rules are similar to mortgages, so the law protects your money and interest.