This write-up will explore institutions offering unsecured personal loans in Kenya, the application process, benefits, and drawbacks.
Unsecured loans are becoming more and more common in Kenya among those looking for financial aid. Unsecured loans don’t need any kind of security, in contrast to secured loans, which do and demand collateral like real estate or a car. Therefore, debtors who are unable to repay the loan won’t lose their property.
Unsecured loans are the best option for many things, including establishing a company initiative, covering unforeseen medical expenses, or supporting a personal project. The loan amounts range from 10,000 to 5,000,000 Kenyan Shillings, with a maximum 60-month repayment term.
Advantages of Unsecured Personal Loans in Kenya
Easy to Apply
The size of the loan, the length of the payback period, and the lender all affect the interest rates for unsecured personal loans.
Unsecured loans have an easy application procedure. Applicants must complete an application form and include details about their income, employment history, and credit score.
After reviewing the application, the lender will decide if the applicant is qualified for the loan. If accepted, the borrower will quickly obtain the money they require.
No Collateral is Needed
Personal loans that are not secured by collateral are available. As a result, borrowers who lack any assets to serve as collateral can nevertheless get financial aid.
Improved Credit Score
Unsecured personal loans also benefit borrowers by assisting in the improvement of their credit scores. Borrowers can prove to lenders they are responsible borrowers by making their loan payments on schedule. They may find it simpler to obtain credit in the future as a result of this.
Disadvantages of Unsecured Personal Loans in Kenya
High-Interest Rates
Lenders take on additional risk when lending to borrowers because these loans are not secured by collateral. Lenders may impose higher interest rates on unsecured loans compared to other loan kinds to account for this risk.
Available to Few Borrowers
Before being authorized for a loan, consumers would normally need to meet specific income and credit score requirements set by the lender. Because of this, it may be challenging for borrowers with low incomes or bad credit to receive these loans.
Read also, How To Get A Personal Loan In Kenya
Banks That Offer Unsecured Personal Loans in Kenya
Several banks in Kenya offer unsecured loans. Popular banks that provide this type of loan include but are not limited to:
- Standard Chartered
- National Bank of Kenya
- KCB Bank
- Stanbic Bank Kenya
- I&M Bank
- NCBA Bank
- Equity Bank
- Cooperative Bank
- Absa Bank Kenya
- Family Bank
Conclusion: Unsecured Personal Loans Providers In Kenya
There are hundreds of financial institutions in Kenya, a majority of which offer secured loans. These are just a few of those who offer unsecured loans.
Many more lenders including Microfinance institutions are introducing unsecured loans. However, they have to pass borrowers through a rigorous approval process which one must fulfill to be awarded a loan.
