wazua Wed, Dec 25, 2024
Welcome Guest Search | Active Topics | Log In | Register

Equity Loan facility for property development:
kaifastus
#1 Posted : Friday, September 04, 2015 10:02:14 PM
Rank: Member


Joined: 8/17/2011
Posts: 207
Location: humu humu
Yesterday i received a letter from equity telling me that they have increased the interest rates on my loan facility.( due to the increase in kbrr etc etc).
In 2013 i had taken a 5yr loan facility from equity at 18%. Last year equity priced its loans at around 16-17%. I went to ask for an interest rate review (downward in line with new kbbr after 6 months stipulated period) but they declined.
Today i talked to a manager and learned the following
a.) They don't review interest rates for existing loans downward even when cbk does so:
b.)Even when the interest rates are low know that they win eventually. As soon as the rates go up (and they will go up) they quickly adjust your rate.Now apply point a.
c.)wait, i forgot to add that they can indeed adjust your rate downward!...that is if you top up your existing loan. but then again rem low rates regime in kenya is nadra.. so rates eventually go up and you are trapped with a bigger expensive loan.Refer to point a above
Anyway i could not have completed my project any other way and am grateful to equity. equity process loans very fast(a week).any experiences from other banks out there?

sparkly
#2 Posted : Saturday, September 05, 2015 7:31:38 AM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
kaifastus wrote:
Yesterday i received a letter from equity telling me that they have increased the interest rates on my loan facility.( due to the increase in kbrr etc etc).
In 2013 i had taken a 5yr loan facility from equity at 18%. Last year equity priced its loans at around 16-17%. I went to ask for an interest rate review (downward in line with new kbbr after 6 months stipulated period) but they declined.
Today i talked to a manager and learned the following
a.) They don't review interest rates for existing loans downward even when cbk does so:
b.)Even when the interest rates are low know that they win eventually. As soon as the rates go up (and they will go up) they quickly adjust your rate.Now apply point a.
c.)wait, i forgot to add that they can indeed adjust your rate downward!...that is if you top up your existing loan. but then again rem low rates regime in kenya is nadra.. so rates eventually go up and you are trapped with a bigger expensive loan.Refer to point a above
Anyway i could not have completed my project any other way and am grateful to equity. equity process loans very fast(a week).any experiences from other banks out there?


Thanks for sharing your experience.
Life is short. Live passionately.
Bachuma Gate
#3 Posted : Saturday, September 05, 2015 7:58:21 AM
Rank: Member


Joined: 3/26/2012
Posts: 280
You need to consult further because the idea of KBBR was to have a benchmark meaning rates should move in tandem with KBBR. Otherwise what was the point of introducing it. Go also to KBA website; they do explain how to determine your rate but have not read it myself.
DOH
Boris Boyka
#4 Posted : Saturday, September 05, 2015 8:44:52 AM
Rank: Veteran


Joined: 11/15/2013
Posts: 1,977
Location: Here
Last time Interest rates were increased in 2012 My personal loan that i had taken when rates were low increased by four (4) installments. I enlightened my colleagues to check their loan balances and they found incresases ranging from 4-6 installments depending on how much the loan was and repayment period. I was curious and took a loan form from the bank(COOP) and several other banks. When i read the terms and conditions, there was a clause " the bank reserves the right to vary interest without prior informing the client." I also took.my loan statement and went through all transactions one by one. I inquired from several people and the banks employees and found out that IF you take a LOAN when rates are low:
a). ALL Banks are quick to vary interest rate up but TOO SLOW to vary it down.
b). If loan is reducing balance, the interest rate is calculate monthly using that months balance and PREVAILING RATE. So for my case when rate went up, inerest charged monthly shot high...when interest rates were lowered, interest charged came down. Even though they took several months to effect downwards.
IF you take a LOAN when rates are HIGH:
a). When market rates come lower, your loan rate remains HIGH unless you top up the loan. ALL Banks.
** Similarly at that time Saccos had had varied rates upto between 1.1% to 1.25% monthly as a result of pressure from banks and gvt to create balance.
The only way to curb this is CBK tell banks to change that clause. That is what i found out.
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
Users browsing this topic
Guest
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Copyright © 2024 Wazua.co.ke. All Rights Reserved.