I took out a cfc scheme loan of 1.2m feb 2011 ksh29563pm for 60 months.It was employer negotiated meaning interest was fixed at 15%pa plus a few percentage points the banks adds. Even b4 the CBK altered rates in october last year cfc has changed rates 5 times without informing our employer. Their loan statement shows eg may interest is 21000 principle 8400 yet june interest goes to 16000 principle 12000 yet its supposed to be on reducing balance. Some months like jan 2012 1ntrest shows 28000 meaning principles is less that 1000. Other charges inserted totaling to 19000ksh penalty late payment yet employer pays on time. This they say they will refund but i want to sue them. I have made 11 installments totaling 325,171 yet loan balance is 127,897 meaning i have paid less that 100k. I have taken loans with EB,BBK and their interest reduces every months as total balance goes down(even with rates increases) with statements u can elewa They say rate is now 28% up from 15% yet direct sales guy are telling pple 19%. Paying balance to escape is even hard they say early repayment penalty is now 12% these SOUTH aFRICAn thieves pls avoid like plague use stanchart or barclays.Kenya Bankers Associated in a press release on 14th dec 2011 said no early penalty should be applied on borrowers whos rate have been altered from the original contracted rate.Who knows a good lawyer who can take these guys to sweat.

I hope the 1.2m didn't go towards the purchase of a toyota premio.

next time go for sacco loans.they are cheap and straight forward

haha didnt buy a premio finished my house to start earning owner occupier.My issue with cfc is that they dont even charge what interest they have quoted even after the increase ie jan 2012 out of the 29563 deduction 28000ksh went to interest they cant explain why no mount went to principle kwani the interest is 99%. They have agreed to refund though but i want to go legal.The rate was 15% pa btn march 2011-october 2011 yet interest btn sme months vary by as much as 8000pm system error given as reason.The communication from KBA was that no early repayment penalty to be applied on loans that have interest increased if borrowers want to pay full balance yet cfc has put in 12% to block anyone trying to runaway from their robbery without violence indurstry average is 4%.I think they have a policy to steal as much as possible and take it down south Africa

@ Premio, Too sad.

I would echo @ bird_man advice. You may be hurt but start by sitting down with your offender, the bank. Work out what the payments should have been based on the loan agreement and let them effect the amendments to reflect the true status. Mistakes do happen and can always be resolved if both parties agree to resolve. Use the lawyer as a last resort as even with a lawyer they can buy time and the bank might delay any resolution until the case is over!

All the best.

SACCO is the way to go...My young brother is a banker when he sees my call...he already knows what Im going to say to him! I pity him sometimes...