Since 1902

By PETER KAMURI

The interest rates charged by banks on loans have hit the roof. Bank loans have become unaffordable, with many opting for other alternative lending options.

However, as more banks pitch tents in corners of the street, temptations to borrow will persist, coupled with the rising cost of living.

More people are becoming desperate for money to help them manage their affairs.

Although bank loans are expensive, they remain the lenders of choice to most people. On the other hand, banks are aware that people are desperate for money and that is why they come up with innovative ways of attracting borrowers. They use all means to lure them into taking loans.

Sarah Kemuma, a banker working in Nairobi says, "Surely, taking a bank loan may be a good way to get you out of the limbo. However, if you fill in that loan application form in a hurry, you may end up paying more than you would have paid if you were more careful."

She notes, "Filling your loan application form is usually an important part of your loan application process. That is why careful thought should be given to it to ensure that you do it meticulously and avoid botching up the process that may make you to live to rue your hasty actions." Kemuma observes, "Being thorough when filling your application form has some advantages. One, you ensure that you do not make errors that can make your form to be referred back to you for corrections. When this happens, the processing of your loan application will take longer than anticipated."

Filling the form

She adds, "Filling in your forms carefully ensures that you have taken time to read and understand the form and ask for clarifications." "Taking time when filling your loan application form ensures you fill in the information sought correctly. The information you provide can determines whether you will secure the loan or not. In some instances, this will determine how much you can qualify for," says Kemuma.

Beryl Owino, a banker in a micro finance institution cautions, "Before filling in the loan application form, do a self-evaluation to know whether you meet the basic requirements of the bank. "

"How can you rate your credit history? Have you previously defaulted in repayment of loans? Will the amount you are applying for affect your ability to maintain a steady payment schedule? Do you have other sources income?" says Owino. "Most forms begin by asking for personal information. Give correct information about your name, age, phone number, email address and marital status. Also, have your identification card or passport with you to be able to get the correct number. Giving erroneous information can cost you the loan," says Owino.

Gerald Kimingi, a financial advisor says it is common for some people to scale down money spend on various bills like water, electricity, telephone or even rent.

He advises applicants to be truthful and know the fees involved, the interest charged and projections in interest rates. "Ensure that there are no errors and you have provided all the information sought."