All the Payday Loan Questions Answered

payday loan

Sometimes, even the most prepared people may find themselves in a cash crunch. Financial hitches can be as inescapable as they are upsetting; this is why it is essential to have the backup of a mobile payday loan.

Surveys indicate that although Kenyans do an incredible job of maintaining their finances, they will need occasional help. A higher percentage of them are going for the payday loans to bridge a short-term money deficit or to cover for unplanned expenses that may arise before the next payday, without incurring rotating debt.

The best payday loan lenders in Kenya provide mobile apps that allow for painless loan application process. These apps are user-friendly, easy to navigate and automated, and make it flawless for one to get their loans, fast.

This article covers the wide-ranging question that people frequently ask about payday loans.

How often should one use payday services?

A payday advance is a short-term remedy to an emergency need that crops up between paydays. It is by no means a long-term solution for continuous finance management. One should not use the payday loans on a frequent or ongoing basis because it can result in serious financial hardship.

Are mobile payday loans confidential?

Most people prefer keeping their financial information a secret, and the lenders understand this fact too well. As such, they guarantee 100% confidentiality in all transactions. Some applicants raise concerns about their references finding out about their financial situation, but this should not be a cause for worry. The best payday loan providers in Kenya will only call the reference to confirm whether the provided numbers are valid. Financial institutions respect the client’s privacy desire in handling their financial matters.

How do lenders determine a payday advance amount?

Loan amount largely depends on a person’s current income. Sometimes, a person may get as much as they would like. However, it is not always helpful to request for more than one can comfortably repay. Payday loans come handy during emergencies, to cater for the unexpected costs, and can suffice a financial hardship between paydays – but it should be used responsibly as part of a short-term plan.

Why do financial organizations provide a lot of information in the agreement?

The customer agreement serves as a contract that binds the two parties. The contract indicates the terms of the transaction, including the fee for the service in cash and as an APR (annual percentage rate). It serves to bind the two parties and cut out any surprise element that may arise later on.

What happens when one does not have funds to repay the loan on their due date?

Just like clients, lenders hope that this does not occur. However, in case it does, the best payday loan lenders in Kenya are devoted to collecting the loans in a fair, professional, and lawful way. If the lenders try to debit an account and it bounces because of insufficient funds, clients may be eligible to pay the returned item fee as stipulated in the contract. Most lenders will charge non-sufficient funds (NSF) fee for the returned check and may even withdraw the checking account privileges from the client.

Does one face criminal charges if they do not pay their payday loans?

Reputable payday loan lenders in Kenya will not press criminal charges against a client due to unpaid funds; however, if they become negligent, the lender will bar them from getting another loan. Other actions may include reporting the client’s account information to the credit bureaus, referring the case to a loan collection agency, or using other legally acceptable means to collect the funds due.

What if one is dissatisfied with the solutions rendered?

Trusted financial institutions strive to offer professional and friendly customer support solutions to guarantee satisfaction. Nevertheless, if an issue arises with the payday loan, it is advisable for one to contact the company and have them address the concern. In the unlikely event that the two parties fail to resolve the dispute, agreement contracts provide that one can request arbitration or take the issue to small claims court where a neutral third party can help to make a binding decision.

Can someone pay his or her Payday loan early?

Yes. Be sure to talk with the service providers to arrange for the early payoff.

Will Paying Off My Old/Bad Debts Raise My Credit Score?

credit score

If you are worried about the effect of old or bad debts on your credit score, we are here to tell you that bad credit doesn’t last forever! It will only take some improvement in your financial life to make the mistakes from your credit report completely disappear over time.

We know how much a debt collection can make it difficult to get new credit and loans. It can be the worst type of entries on a credit report. Now the question is, are you also having problems with your credit score due to the debt collection?

Well, don’t be too worried because every debt has its time period and will soon be removed after paying off the debt. How much time? It depends; for unpaid or delinquent accounts, it’s seven years and for Chapter 7 bankruptcies, it is up to ten year!

These bad credit reports can be quite frustrating when you are trying to clean the record while making any sort of big purchases like a new home, or a car or even starting a new business. We won’t say that the reports will disappear instantly from your record but we can definitely bring you some peace of mind. By following the steps given below, your credit score will surely improve at a decent rate.

Here are some possible ways to remove bad credit reports from haunting you any further:

  • Remove by settlement

Not able to pay the full amount? Try settling your debt. We would suggest you try this first because it can help your financial life too. Negotiations with the debt collector personally to delete your debit account from your credit report in exchange for payment is a great idea.

You must try it! A “settlement” payment is some percentage less than the actual amount you owe. Send a written request and after deletion, make sure to take a written letter of the agreements before making the payment.

This can be a long process so I suggest you take your debt file out a year before any purchase.

  • Remove by paying in full amount

Most lenders will need you to pay off your debts in full and many debt collectors don’t settle for settlement payments. For this, we would suggest that you pay off your debt in full ASAP and then proceed onto requesting the collector to change your report to say paid in full.

This will increase your credit score more than the settlement payment and show the lenders that you are responsible when it comes to paying obligations.

  • One debt at one time

Don’t try to rush things because it won’t help you much. A genius way to remove the bad records and raise your credit score is to take baby steps. What we mean to say is when you are ready to pay off one of your debts, just call up the company owning the debt and repay them fully.

Are you thinking of paying small amounts to all the debt collectors? That trail of thought may be natural but it’s not appropriate. Why? Because if you do so, now and then the companies will keep bothering you. Therefore it’s better than if you repay one at a time.

  • Positivity in recent credit history

It is important to focus on the present than just fixing your past records. Most companies will look at your recent credit records than that of six years ago. So be sure to keep your recent records clean.

  • Take time to raise your credit score

Your credit records won’t just magically improve in a day or two. It will take some time, especially if you have fallen behind on your payments for a period of time.

Don’t recognize a debt? Contact the company and gather basic information right away. If it isn’t you, file a police report and talk to the company immediately. Your debt will draw out helping you raise your credit score.

  • Don’t let it happen again

Now that your credit score is rising, don’t let it fall again! Make a calculated budget and don’t waste your money unless it’s absolutely necessary. It will keep raising your credit score over time and clean all your bad credit records.

Borrowing money can help at times of dire need, so think twice when borrowing money uselessly. If you’ve been following all the advice given here, I can assure you that your credit score WILL rise.

We would also suggest you have a look at Mombo Sacco if you want to protect your financial future. They offer loans of up to 5 times your savings at amazingly low-interest rates per annum. They do care for you. So don’t be a spendthrift! Be wise when spending.

Need Funding for Business? Here’s What to Know Before Applying for a Loan in Kenya

loan in kenya

When you need a loan for your small, medium or large-sized business, it’s highly likely that you’re willing to take the first deal that comes your way, but don’t. Taking time to analyze your needs, plans and the potential lender will help you settle for the best loan in Kenya.

If you’re just getting started with loans, you might find it challenging to know the right questions to ask yourself, let alone the service providers. This article comprehensively covers everything you need to know before you apply for a loan in Kenya.

Understand why you need a loan for your business

There are unending reasons to borrow a loan in Kenya for your business. You might want to boost up your inventory, expand your physical location, do some renovations or marketing, help with recurring expenses or pay employees. You also might need money to serve as a cushion for a rainy day. Whatever your reason is for considering a loan, ask yourself:

  • Will the money help your business grow? For instance, if you borrow Sh. 100,000 for paying employees, your credit won’t generate more revenue, meaning you could still be in the same situation a few months down the line. If you put the money where it can grow, then you’ll realize more profits with time, and help minimize future borrowing needs.
  • Do you have an adequate cash flow to settle the loan? Most lenders will want to see a cash flow that’s at least triple your debt payment requirements. If they realize that you might have problems making payments if one of your clients pulls out, that’s likely to scare them away.

Related: four steps to make the most of your credit

Consider how much money your business needs

This might seem obvious, but you’ll be surprised by how many business people end up borrowing way more, or even less than they initially thought they needed. So, the second thing you should do is to take a pen and paper and write down all your needs, against the cost. This will help you come with an ideal figure, which is essential for two reasons:

  • Knowing how much you require will assist you in finding a provider who’s capable of financing your needs. Some will only give you a fraction of what you need, which will be too little, and won’t be worth taking. On the same breath, taking more than you require will mean bigger payments, which might strain you at the end of the day.
  • Having the ideal figure in mind will guide you in borrowing what you need; it removes the guesswork from the picture. This way, you won’t take less or more than what your business requires. Besides, with everything written down, you are aware of how you’re going to use the money, and it will serve as a guide for careful spending.

Analyze the cost of the loan

Once you’ve figured out how much money you need for your loan in Kenya, the third thing is to know how much it will cost you – or the interest. The market presents hundreds of options when it comes to money lending, but only a few will give you value for money. The hard part is finding the “few”.

Borrowing smart is the way to go; don’t go into it with your eyes wide shut, blinded by the excitement of what you’re getting. Debt isn’t bad, ignorance is. Here’s how you understand the real cost:

  • In addition to your potential interest rate, ask your lender about the Annual Percentage Rate (APR) for the loan. The APR includes all the extra charges – like the accounts, loan processing, and origination – and will give you a more accurate quote of what you’ll pay.
  • Ask if there are any prepayment penalties or extra costs. With this information, you’ll know whether or not your business can comfortably pay back the loan that you’re planning to take.

Find out about the payment terms

The good thing about loans is you can repay over a period. Before you commit to one, you should always be aware of its terms (how long the loan will last and its features). Top providers of quick loans in Kenya are flexible and allow repayments from 2 days up to 48 months. It’s best to know what you prefer before settling into a deal. You can:

  • Find out if the interest rate is floating or fixed. Floating interests fluctuate with the financial market, whereas the fixed one doesn’t change regardless of the market.
  • Consider if the term you’re interested in uses compound interest (CI). With CI, the interest amount is added to the principal borrowed amount periodically. Find out if you’ll incur any penalty for early repayment. If there isn’t, and the loan is using CI, then you can pay up the full amount sooner to save up.

Establish how soon you need the loan

If you want a quick business loan to boost your stock in a high sales period, or to cater for an emergency need, you’ll pay more for the convenience you’re getting. Fast cash is a bit more expensive than those that take longer to materialize. Prior to settling for a deal:

  • Analyze your business needs. Can the investment wait, and for how long? Is it an emergency? With the answer in mind, you’ll know what to settle for.
  • It’s also important to know who you’re working with. Some lenders will want to squeeze you dry because they know you need the money. You can opt for SACCOS which are highly regarded for helping in such situations.

Related: how to open a savings account that enables you to borrow against savings

Always ensure that you are well-versed with all that goes into the process before you resolve to take a loan in Kenya for your business. Big funds with minimum interest sound incredible, but if you can’t qualify, then it isn’t the right loan for you. A business loan is just about matching your needs with your options. Best of luck.

6 Ways a Quick Online Loan Can Help In Emergency Situations in Kenya

fast personal loans in nairbi

Financial hardships, like losing a job, medical emergencies, bills, bereavement-related expenses and other living costs can occur at the worst time and when you least afford them. Securing a quick online loan in Kenya for such unplanned expenses can help get you back on your feet.

If you are like many middle-class Kenyans, you are likely to plan for different expenses in your life; from how you’ll pay your children’s school fees to how you’ll pay for a car or a home and so on. You also might have some little money set aside for miscellaneous. However, when emergencies or unplanned situations that require a considerable amount of money up front hits, you may find yourself in a monetary crisis.

While the saving fund could cushion part of the emergency costs, you might still need some money to offset the outstanding balance. In such cases, getting a quick online loan in Kenya to stem the tide will relieve you the stress. Personal loans provide incredible payment periods and interest rates, which makes them the most convenient and affordable way to borrow.

Unlike bank credits, online personal loans are easy to apply, and not as involving. They avail forms that only include essential details to gauge your compliance and suitability. If you pass the checks, your loan approval process could happen in minutes. Here are 6 ways a quick online loan in Kenya can help in emergency situations:

Car Repairs

Car repairs occur to everyone. You’re going about your daily routine, spending within your financial limits, and viola, an emergency repair strikes – hard. According to consumer reports, repair charges amounts to 4% of the annual cost that owners pay to get the vehicle. It doesn’t matter if you’re riding an inexpensive car, you still could be looking at tens of thousands shillings per year in repair and maintenance cost. Some common emergencies that might get you flat footed are replacing the spark plugs, dead battery, fixing brakes, which can quickly increase beyond your budget.

Medical emergencies

When sudden illness or injury happens, and you don’t have cash on hand, a quick online loan can suffice the situation. Yes, you might have insurance and all, but it may not cover your medical needs. Dental procedures, infertility treatment, hair loss restoration and replacement and weight loss surgeries might not feature in the insurance list, meaning you’ll have to deep into your pocket. Besides, some insurance only covers a certain percentage of the entire medical cost. A simple loan can help you take care of the rest.

House and office rent payments

Financial struggles like the emergency medical bill, car repairs, and job loss can eat into your rent. Unfortunately, most Kenyan landlords wouldn’t want to hear about it, and you risk being slapped with an eviction notice. Although you’re in a tight spot, you still need to figure out how you’ll pay rent, on time. This is where quick online loans for rent come in. You can browse online for reputable and legitimate online lenders committed to offering people with emergency loans at low rates.

Starting a side business

With bills skyrocketing by the day, you need a side hustle to keep you afloat. The money you get from your job can’t be enough to take care of all your expenses, let alone invest in a business. This is why many working class folks are opting for a second income stream. The only problem then becomes getting the initial capital. If you find yourself in such a situation, a personal loan could be the answer you’re looking for.

Create an emergency fund

In situations where a quick online loan in Kenya is the only thing standing between you and bankruptcy, then it makes total sense to ask for money. Rather than waiting until an emergency arises, consider taking a loan that provides you with enough repayment periods while you establish your savings. For better deals, it’s advisable that you do your due diligence up front, instead of trying to do so when you’re pressed for time.

Utility bills

When you’re having financial issues, you might find it hard to pay your electricity and water bills. These bills quickly add up. Failure to pay might mean a disconnection, and once you are disconnected, you’ll have to incur additional reconnection costs. Getting a quick online loan in Kenya can help you avoid those circumstances.

Four Steps to Make the Most of Your Credit

how to build credit

Maintaining your credit health is almost the same as maintaining a healthy life. Just like your health needs balanced nutrition and proper exercise, your credit health also needs attention, balanced spending, and responsible behavior. Your credit can be a very important tool in your financial life and you need to know how to Build Credit score.

Are you planning on buying a new house or a land? Your credits will come in great help here. But if you don’t manage your credit wisely, you are going to just hurt yourself financially.

In this case, you should grow some healthy habits to keep your credit from ruining your financial health. Take control of your finances and establish good credit. Do not be confused: Credit score and credit reports are two different things and when you understand this, it makes it much easier for managing your credit. We are going to provide you a complete guide how to build credit score.

Here are 4 healthy habits you want to incorporate into your life how to build credit :

  • Wise choice of credit card

Getting calls from different companies to sign up for their credit cards? Don’t get drawn to their offers, research! It is important for you to choose a credit card according to your circumstances. Do your research on different credit cards before signing up.

Also, make sure to ask for their terms and conditions because it can be useful for you. Keep in mind of two things: to look for low-interest rates and making sure it has no annual fee. We also suggest you compare different credit cards to find out which one best suits your specific needs and requirements.

Don’t max out your credit card because it will affect your credit score and pay your dues in full each month to maintain a clean record. Limit yourself to one major credit card with the limit you can afford. Don’t go overboard with too many credit cards on your name.

  • Build credit history

Make using your credit card “responsibly” your number 1 priority. Credit cards can be used to build your score but it can also come down falling as an unforgivable curse due to misuse of it. Be sure to pay in full each month. This saves you some cash and polishes your credit report.

A firm credit report is a major part of securing your mortgage or a car loan at a lower rate. Try regularly reviewing your credit report. It is a vital part of managing a good credit score and guarding against identity theft.

Are past credit mistakes haunting you and resisting your credit score rise? If you’re wondering what to do now, we suggest you should pay off your debts in full so that you can start repairing your credit history.

If you maxed out your several cards, worrying won’t help- paying off the bills will. You can close down one or two afterward but keep your oldest card running.

  • Lower your interest rates

Are you overwhelmed by the high-interest rate of your credit card? Don’t worry, you may not be stuck with it forever. But how? You can always negotiate with your bank or credit card company to get a lower interest rate. If they deny, try asking them every now and then. Perseverance might pay off in this case.

If the first option doesn’t work, transfer your money to a new card with a 0% interest rate. This will allow you to pay off your debt easier and manage your credit score better.

  • Knowing true facts about credit cards

Let us tell you a fact: you don’t need to sign up for credit cards if you don’t need one. Yes, it’s true! Maybe you are better off without one. It may make you feel valued but it will all come crumbling down when you end up owing quite a lot of cash to the banks. And if you are using one, be careful about how and when you are using it and remember to keep paying off debts in a timely fashion.

When you learn how to build credit properly according to your situation, you will be fine. But if you’re unsure, then don’t get one in the first place! But if you absolutely must, we would suggest you visit Mombo Sacco for smart savings! They offer loans up to 5 times your hard earned savings, and very low interest rates. It’s quick, it’s simple and they are upfront about their dealings so no more worrying about any hidden charges and sweetest of all? It’s all digital so say goodbye to tedious paper works from now on.

Along with Mombo Sacco, try regulating these steps into your life because keeping a good credit report can get you the most out of your credit. So, no matter what your situation is, try to keep your records clean and the end your payoff is guaranteed to be sweet!

How to Get Same Day Cash Loans – How Do They Work?

Getting a same day cash loan could be the answer to all your money problems… or it could end you in serious financial difficulty if you’re not careful. It’s all about finding a reliable lender, using that cash wisely and repaying it sensibly!

In this short article, we’re going to cover all that you could possibly need to know about same day cash loans, so you can manage money like a pro.

What are same day cash loans?

A same day cash loan is a loan that arrives in your Bank account the same day that you apply for it.

In other words, it’s an instant loan that deposits the money into your account without all the waiting, paper forms and interviews you’d face at the bank.

Generally, same day cash loans in Kenya are small amounts (see what kind of emergencies they can cover in Same day cash loans can save the day! below) that can be secured against your salary, assets (like a car) or savings.

Like nearly all loans, you’ll have a set period to pay it back in with interest and there may be penalties and fees for not paying it back in time.

How to find the best same day cash loans

Finding the best same day cash loan for you really depends on your circumstances. Here are some of the things you need to think about before getting a cash loan:

  • How much you realistically need.
  • How long it will take you to pay it back.
  • If you can pay it back early or in a lump sum.
  • If the money isn’t for an emergency, is the loan really worth it or can you save up the money yourself?

Once you know that, all you need to do is find a reputable lender who has a loan that meets your requirements.

What you need to apply for same day cash loans

Requirements will vary from lender to lender, but most lenders need to see proof of identity, either from driving license, passport or national ID. Some may also need to see your recent bank account statements and others may run a credit check on you.

Online and mobile lenders, like us at Mombo, can do all of this via an app or over the telephone. We want to make same day cash loans as quick as possible, so once you’ve applied with us we can have the money in your Bank account in as little as 10 minutes with the Insta Loans service.

We can deposit money into your bank account or M-Pesa account, whichever is more convenient.

Same day cash loans can save the day!

Here are some examples of how a same day cash loan can really save the day:

  • Emergency car repairs if you break down and need to travel to work.
  • Health care if you or a relative is in an accident.
  • Home repairs if the boiler or electrics break.
  • You need to pay a deposit on a holiday or other item and need to pay it quick before it’s gone!

What could you do with an instant loan? These same day cash loans are small amounts of money that can really save you in an emergency. But if you need some cash for non-emergencies (like your wedding day, a new TV, redecorating the house) you will be better off with a different kind of loan. One that offers you more money and easier repayment terms.

3 tips for repaying same day cash loans

  • Write on the calendar or in the diary when each repayment needs to be made – the last thing you want to do is forget. Late payments can have hefty fees. Our app will notify you if you’ve got a Mombo loan that needs repaying.
  • Work out how much the interest is going to cost you so that you always have enough money to make each repayment and keep the lender happy. Ideally, you should never take a loan that’s difficult for you to pay back without cutting down on living expenses (e.g. food, fuel etc.).
  • Finally, try and balance repaying loans with savings. Some people may tell you that repaying the debt should be ALL that you’re doing, but here at Mombo we really believe that repaying same day cash loans doesn’t mean you shouldn’t be able to save money too! You can read more about debts vs savings in this article.

Same day cash loans are a great way to get instant cash when handled sensibly! Keep checking back to our blog for more great tips and articles on managing your money.

Short on Funds before St Valentine’s Day? Check out Instant Online Loans in Kenya

instant online loans

St Valentine ’s Day is probably the second most expected holiday after Christmas. Why? Because all of us expect love. And when everyone around you is in a romantic mood, you can’t help expecting this day to be very special for you too. Maybe you have a person you’ve got tender feelings for and wait for an opportunity to make a declaration. Or maybe you are looking to refresh romance in your worn-out marriage… Or you just want to hearten your nearest and dearest and say they mean a lot in your life… In any case, feelings are not enough. You’ll need some tangible evidence such as flowers, sweets or jewellery. But what if you are low on funds before the holiday? Financial difficulties don’t mean you must stay outside the celebration of love. Sometimes, it’s not a bad thing to get some extra cash in such unromantic way as taking a loan. We’ll tell you about instant online loans in Kenya that take only a couple of hours to get!

Some St Valentine’s Day stats. How can you stay outside after that?

Do you know that over $13 billion is being spent on the most romantic day of the year? According to StatisticBrain, 180 million Valentine cards are bought to exchange love. And now some food for thought. 14% women decide to send themselves flowers on this day in order to not look unattended. Do you still think your favourite person has to buy flowers for herself? Just asking… Because 53% of women decide to quit the relationship if they don’t receive a gift for the St Valentine’s Day.

The truth is women take this holiday seriously. Even if they tend to behave like they don’t care. They do care.

Maybe you belong to those people who treat this holiday sceptically. Like it will humiliate love if we celebrate it only one day in a year. The idea is really weird. But we cannot change the fact this holiday exists. We can only change the way we spend this day.

This holiday has a great power to impact our relationship in a better way. Why? Because we all are tuned and ready for love weeks before the holiday arrives. Thanks to media, malls’ decorations and global excitement. The scenery is already set. All we need is to step up and take the prize. If you want to start a relationship, there is no better time like the St Valentine’s Day.

Unromantic question: should I apply for a loan to buy a present?

Many guys buy expensive presents just to impress their girlfriends. There is no wise reason you should do the same. Think what would work best in your situation. Think of things (or activities) your beloved one likes most of all. They can be quite inexpensive and plain things. Flowers and chocolates won’t cost you a lot and you won’t have to borrow too much. Looking for something extravagant? Then you can consider dining out in a restaurant or even a romantic escape to a beautiful place.

Tip: Look for instant online loans in Kenya if you want to get a fast approval and enjoy the lowest interest rates.

Where to get a loan online in Kenya?

If you need quick money against your next paycheck, search for payday loans online. With Mombo App, you can quickly borrow up to half of your net salary. All you need to do is to enrol with Mombo using the App and provide your valid chequebook. The requested amount is yours in less than 2 hours, and you can be off shopping for romantic stuff. The interest rate is only 12%, and you can comfortably pay out the loan within 6 months.

What if your romantic scenario requires a more substantial financing? Mombo can lend you the money quickly against your personal assets such as a car.

Where can I get a loan with bad credit?

Conventional brick-and-mortar banks don’t give loans to people with poor credit. But you can always use services of online lenders such as Mombo. Moreover, even win on a much lower interest rate (12%) than that of traditional banks (approx. 20%). With the Mombo App, you can get a loan with bad credit. You just need to provide collateral and honestly explain the reason for your bad credit.

You know people who want to achieve something, look for opportunities. Those who don’t want, look for excuses. We at Mombo work hard to create opportunities to make your boldest romantic dreams come true this St Valentine’s Day!

How to Apply for Small Loans in 3 Simple Steps

apply for small loans

A small loan could be all you need to ease financial strain, buy a vehicle, get married or just make some home improvements. But you need to be responsible with your loan. You need to find the best rate, the right term length and a reputable Kenyan lender.

Follow these 3 steps to apply for small loans with success.

 

Step 1 – Planning

There are many different types of small loans available for you to apply for: you need to find those that are suitable for your needs.

Payday loans offer you money against your salary – you accept the small loan and pay it back on your next pay day. Apply for small loans like this if you need a small amount of money in advance of your pay day, and you’re certain you’ll be able to pay back the loan from your salary.

You can also apply for small loans against your savings – different lenders will offer you different loan amounts. You could use this money for things like celebrations, home renovations or even emergencies.

Many lenders will also offer different kinds of small loans to apply for. The factors you need to pay particular attention to are: interest rates, added fees and restrictions when it comes to paying back the loan or the actual term of the loan.

Work out how much you need and how long you need to loan for. For example, Mombo App lends from ksh.2,000 to ksh.3,000,000 for terms of 1 week to 48 months.

 

Step 2 – Check Your Credit Score

Lenders will want to see your credit score as part of the application process, so it’s a good idea to take a look at your credit score in advance. If your credit score is poor, you might want to wait before you apply for small loans. It is wise to get your credit score to a good level before applying, to increase your chances of being accepted.

In Kenya, you can obtain your credit score from bank transactions or M-Pesa transactions.

  • Bank Transactions: you can obtain your credit score from the 3 credit reference bureaus (CRBs) in Kenya. These credit scores will have details about your transactions through banks and microfinance institutions. A score can be anywhere from 100 to 900: a good score is considered to be 700 or above. This credit score is better if you’re looking for large loans of ksh.200,000 or more.
  • M-Pesa Transactions: these are great for when you apply for small loans. Mobile lenders, like Mombo App, prefer these credit scores for small amounts between ksh.2,000 and ksh.200,000. The M-Pesa credit score has more details about your overall financial status as it covers mobile money transactions, while the bank credit scores do not.

 

Step 3 – Apply for Small Loans

Once you’ve got your score in good shape and you’ve planned out carefully how much money you need when you apply, it’s time to start searching for lenders.

The most popular or newest lender might not always be the best. Whether they’re a bank or a mobile app, there are a few things you should look for:

  • Bad reviews or good reviews?
  • Small print details – is the lender transparent about lending fees and conditions?
  • Does their website look reliable? Do they have a permanent address that checks out?
  • Can you call them and speak with an adviser to ask questions?

 

When you apply for a loan you’ll undoubtedly have to provide personal details as well as your credit score and other requirements. These will vary from lender to lender – some may require that you provide ID, others may just need a phone call or physical meeting to verify your identity.

When you come to apply for small loans just remember these 3 steps and be sensible! If you have any questions or concerns, why not get in touch with us at Mombo? We’d love to help you work out what loans are suitable for you and how much you could borrow. Find out more about Mombo App and apply for small loans here.

Things you Should Know Before you Apply for a Personal Loan

personal loan

Dealing with lenders is not easy. Especially if you are applying for a loan, there are MANY things you have to know beforehand.

If this is the first time you are going to apply for a personal loan, there are a few things you should keep in mind. The first and most important thing you should do is consider your credit score.

Your credit score is the value generated by credit reporting agencies based on your credit report. Factors such as your payment history, number and type of current loans (whether they are revolving or non-revolving), debt to credit available ratio affect your credit score the most.

Before you start the process to even talk about a loan with a lender, make sure you can trust the institution.

There are many fraud lenders these days who might use your information to commit identity theft. Especially if you are thinking to apply for a personal loan online, you HAVE to make sure the website is legitimate.

Otherwise, you might basically hand over your information to someone who would be more than happy to flush your credit score down the drain! So, if you want to get a guideline about what you should do, read on.

· Check your credit report

Before a lender approves your loan, your credit report will be the first thing they check- which is why you should review it first!

Your credit decides whether or not you can be trusted with a loan, or how risky you are as a customer. It also dictates how much interest you will have to pay as people with a bad credit report will have to pay higher interest (since they already have a bad record and are deemed risky).

Start by reviewing your credit score. If your score looks weird to you, make sure you check your reports carefully. If you find errors, get them corrected as soon as possible.

· Look for local options or apply online

The first places you should look for a loan is a local lender that is nearby you.

Taking a loan involves multiple trips to the lender; hence choosing one that is far away from you will be pretty inconvenient. Start by collecting details about the banks available and what their requirements are for a personal loan.

Most of the information you need will be available on their websites or brochures. If you have more questions to ask, you should talk to their loan officer over the phone or even in person. Don’t keep questions unanswered.

If you want things to be even more convenient, you could apply for a personal loan online.

· Research and compare

If you think looking at one lender is enough for you to decide whether or not you should take a loan, you are going to make a huge mistake.

Be sure to look into multiple lenders and compare their rates. Also find out all the terms and conditions of the loans they offer, whether they have some hidden charges or not.

Moreover, make sure you know the consequences of failing payments or becoming default. Even though you will obviously be trying to make your payments on time, some lenders have major repercussions for delays in payment.

Finally, only apply for the loan(s) that matches your requirements and is ensured to be accepted. Every loan application you make will negatively affect your credit score, so try not to apply for loans that you know you will not receive.

· Collect the paperwork and information that you will have to provide

Whenever you apply for a loan, you have to provide certain information about yourself.

Such information includes your monthly or annual income as they need to know your debt to income ratio. They will also require information about your expenditures, the number of dependents, residential status (whether you live in your own apartment or in a rented flat), name and address of your employer and how long you have worked for them.

Therefore, preparing the paperwork of this information beforehand means you will be able to submit them the moment they are asked for, hence reducing delay.

Even though dealing with lenders might seem like a scary task in the beginning, it will become a piece of cake for you if you follow these guidelines! Applying for a personal loan in Mombo is pretty easy. We have an app for it and the application process is like a walk in the park. Mombo SACCO offers loans of up to 5 times ones savings, loans at 12% per annum, interest on savings at 6% per annum withdrawable twice annually, annual dividends on one’s share capital, all processes are digital no paperwork. Download our app to know more.