Commercial banks have extended loan repayment period for TSC teachers and civil servants. The banks now allow teachers to take personal loans with upto 120 month repayment period.
Previously teachers were only allowed to take loans with upto a maximum of 96 months.
A number of banks have sent text messages to teachers inviting them to take advantage of the new changes.
Bank loan interest rates as at April 2024
(1). Absa 18%
(2).Kcb 17.84%
(3).Co-op 17 %
(4). Family bank 17%
(5).Nbk 17%
(6).Equity 16%
(7). Saccos 14%
Equity bank has asked teachers to visit their branches located countrywide to apply for personal loans of upto sh 8.5 million with repayment period of upto 120 months.
This week for the first time in four years, the Central Bank of Kenya (CBK) has lowered its policy lending rate, handing borrowers a reprieve in loan-servicing costs after years of heightened rates in efforts to contain inflation and shilling depreciation.
The apex bank on Tuesday cut its policy rate by 25 basis points to 12.75 percent from 13 percent, noting inflation has fallen to comfortable levels, growth remained resilient, and global macroeconomic conditions have improved.
“The MPC concluded that there was scope for a gradual easing of the monetary policy stance while ensuring continued exchange rate stability. Therefore, the Committee decided to lower the Central Bank Rate (CBR) to 12.75 percent,” CBK said in a statement following the Monetary Policy Committee sitting on Tuesday.
The CBR guides the rate at which the top bank lends to commercial banks, which influences the rate at which they lend to their customers.
CBK last lowered its rate in March of 2020 when the global Covid-19 pandemic hit households with high costs of living amidst a cash crunch that impacted all sectors of the economy.
The drop is set to bring down the cost of loans for domestic borrowers, many of whom have been struggling to service their loans since the CBK started raising the rates in June 2022 amidst global economic shocks that saw inflation rates hit the roof.
The high CBR, coming amidst high inflation and increased taxes, saw a surge in defaults on loans and mortgages to record levels as average lending rates by commercial banks went as high as 18 percent.
Early this year TSC refused to adhere to a request from some banks including National bank to restructure teachers loans to be inline with their new interest rates.
The banks had adjusted the loan repayment period for existing loans after the Central Bank had raised the lending rate.
