Loan maturity,what about it?

    September 14, 2015   No comments

  When will this loan mature?When will my loan be fully paid?How long will it take to clear my loan in full?Credit facilities differ as per the purpose or financier in question.Lenders giving out  loans for business purposes [mkopo wa biashara] for example business startup working capital financing do offer longer repayment periods than their counterparts offering credit services for minor emergencies. Financiers like commercial banks may give less loan repayment periods than saccos [mkopo wa chama] for the same amount of loan.

  Sounds so obvious that it's worthless posting but wait.As Loans Kenya,we have a bank of questions from our blog viewers triggering concern.

"Are long term loans profitable?
How to apply for shot term loans?Whats the loan repayment duration?How long will it take to repay the loan? "

  REPAYMENT DURATION

All legitimate financiers in kenya are regulated by the Central Bank of Kenya.The minimum repayment duration is around one month and the maximum is close to six years[72 months].Only few extreme cases can go up to 20 years.The time attached to a loan facility depends some of the following;

AMOUNT -The higher the amount of money borrowed the longer is the repayment duration and the lower the amount borrowed the shorter is the repayment duration.
CREDIT REPORT -The better the credit report the longer the loan repayment period and the poor the credit report the shorter the loan repayment period.
LENDER -Though within the recommended range of time some lenders can decide to allocate longer repayment periods to a loan amount than other lenders.
Now you know.

SHORT TERM LOANS

They are quick to clear.They are characterised by small loan amounts.They attract smaller loan repayment installments.They have short repayment durations.

LONG TERM LOANS

They are characterised by high loan amounts.They attract longer loan repayment periods thereby making the repayment instalments small as they are spread over longer duration.Business loans can give borrowers ample time to work hard on their businesses ploughing back profits to the business while paying little instalments  to the financier.

CONCLUSION.

Its simple up to the borrower and the lender to settle for an agreed time period.Luckily nowadays there are online loan calculators on the respective lender websites.Make use of the same for quick results.Thanks

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Mwabaya Katana

Posted By Mwabaya Katana

Mwabaya Katana is a Personal Finance online writer.He is the founder of 'Loans Kenya' Blog.

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