@Waria...

Never have... but will look into it... Thanks...

@Monzerat

Thank you for insightful analysis. I have always assumed that SACCO loans are cheaper than bank loans. After doing the maths.. the bank loan is cheaper. However if you manage 15K monthly payments,the SACCO becomes marginally cheaper. Very insightful analysis though..

Nevertheless,i think i would rather pay that extra 5K or 10K for the convenience of the SACCO vs the bank,anyday.






Sacco






Initial Loan
300,000.00
300,000.00
300,000.00
450,000.00


Monthly payments
7,500.00
10,000.00
15,000.00
15,000.00


Interest on deposit
8%
8%
8%
8%


Repayment period (months)
51
36
22
36


Interest per month on Reducing balance
1%
1%
1%
1%









Total Payments
384,440.11
358,714.55
335,700.54
538,071.82


Interest Charged
84,440.11
58,714.55
35,700.54
88,071.82


Interest from deposits - compounded
38,691.86
25,971.20
15,153.43
38,956.80









Total Borrowing costs over period
45,748.26
32,743.35
20,547.11
49,115.02









Value after repayment period






Initial amount
100,000.00
100,000.00
100,000.00
150,000.00


Loan Amount
300,000.00
300,000.00
300,000.00
450,000.00


Borrowing costs
(45,748.26)
(32,743.35)
(20,547.11)
(49,115.02)









Total Value
354,251.74
367,256.65
379,452.89
550,884.98
















Bank






Initial Loan
200,000.00
200,000.00
200,000.00
300,000.00


Monthly payments
7,500.00
10,000.00
15,000.00
15,000.00


Repayment period (months)
34
24
15
22


Interest per month on Reducing balance
1.5%
1.5%
1.5%
1.5%









Total Payments
256,780.82
239,635.69
224,833.07
354,441.88


Interest Charged
56,780.82
39,635.69
24,833.07
54,441.88


Arrangement fee (3%)
6,000.00
6,000.00
6,000.00
9,000.00


Insurance (0.3%)
600.000
600.000
600.000
900.000









Total Borrowing costs over period
63,380.82
46,235.69
31,433.07
64,341.88









Value after repayment period






Initial amount
100,000.00
100,000.00
100,000.00
150,000.00


Loan
200,000.00
200,000.00
200,000.00
300,000.00


Extra Payments paid by Sacco
127,659.29
119,078.86
110,867.47
183,629.94


Borrowing costs
(63,380.82)
(46,235.69)
(31,433.07)
(64,341.88)









Total Value
364,278.47
372,843.17
379,434.41
569,288.06









Net gain (Bank over sacco)
10,026.73
5,586.51
(18.48)
18,403.08

@ Mkimwa

Thank you for that analysis.......at least we are now three in this.

As i said in my previous posts,saccos are good but there is definitely room for improvement. One way of enhancing the saccos( now that the figures are out there for all to see) is to push them to charge interests only on the figure which is over and above your savings. Afterall what is the use of the guarantors?

That has been my argument,notwithstanding other sacco merits which are of course well documented. Remember with banks none of the money that you borrow belong to you.


WOULD RATHER DIE FIGHTING 4 MY RIGHTS THAN LIVE FOREVER WITHOUT ANY RIGHTS

@waria... perhaps you could share more insights on the two banks... i presume we are talking about islamic banking.

@all... i loved the math... and the conclusion... did not see that one coming... gr8 stuff

Remembered this informative discussion and thot i'd put it out there for those who missed it