Bank Loan in Kenya- Charges and Costs
When you think about a Bank loan in Kenya, it is usual to forget about all the charges that levied on the loans that you take. The charges make the loan more expensive. If you do not able to pay for the extra costs and charges associated with your bank loan type in Kenya, you may fail to be successful in your bank loan application
Bank loan in Kenya – Legal fees
These are charges that are a requirement for the bank loan. You cannot get a bank loan in Kenya unless the charges to the lawyer are fully paid. It is usual for the bank to have law firms that they prefer and who they recommend for the loans to be worked on expeditiously. The lawyer fees depend on what the requirement for the loan is. Where there is land, it has to be searched, that is to ensure that the land being bought does belong to the seller. The lawyers also confirm if there are any charges like land rates that are yet to be paid on the property being purchased.
The lawyers also charge for ‘charging’ the land. The security documents have to be charged to the loan. If anyone else wants to use the security documents, they will show they are already charged. When the loan is fully repaid, the loan taker has to pay the lawyers a certain amount of money to have the documents released and the charges dropped.
The lawyers also charge to have the contract for the Bank loan in Kenya drawn and signed. The fees mainly depend on the value of the land and the number of pages.
Insurance fees for bank loan in Kenya
The loan that you take is insured by you in case of permanent disability or death. The insurance company is supposed to pay the bank the amount outstanding on the loan. This insurance amount is renewed every year and the insurance amount added to your loan amount. It is important to ensure you know the time the insurance is renewed so that your account or loan does not fall behind schedule. Insurance may also be taken on the subject of the Bank loan in Kenya, for example, car insurance or mortgage insurance.
Bank charges on bank loan in Kenya
There are charges that are paid to the bank whenever you take a Bank loan in Kenya. These charges are bundled or labelled facilitation fees. Depending on the bank, these could be a percentage of the loan amount or a flat rate. A loan applicant should ask the bank to avail a list of all the bank chanrges on the type of loan that is being sought.
Bank loan in Kenya Interest charges
Interest charges are what most borrowers remember to factor into their loan repayments. The banks could charge interest on reducing balance or compound interest. The interest rate on loans charges as per the changes in the economy. If the interest rate today is 10% this could change to 15% in 1 year due to inflation. Where the rates move very drastically in a short period, it is better not to take the loans as repayment may become impossibly expensive.
Statutory charges for a bank loan in Kenya
They are charges like stamp duty that must be paid to the government. These are usually a percentage of the bank loan in Kenya amount.
The applicant for a bank loan must count the costs associated with the bank loan and prepare for all the costs before approaching the banks or financial institutions. There are some financial institutions that avail full funding inclusive of the costs and charges to the applicant for the bank loan in kenya.