Payday Loans in Kenya, All You Need to Know:

At FUNDGECKO, we take time to conduct thorough research and come up with the best payday loan options. Compare the best payday loan options in Kenya for free and in just a matter of minutes. Besides giving you the options, we equip you with all you need to know before you sign up and walk you through the whole application process.

The current market for payday loans 

Here is the latest news about consumer credit:

• The Government of Kenya introduced a new bill that purged out high-interest loan lenders. Borrowers can now enjoy payday loans at reasonable interest rates.
• The Central Bank of Kenya stepped in to regulate interest rates among digital lenders who now offer loans at as low as 7% monthly interest against previous APR which could go as high as 400% with some lenders. 

With the massive growth in payday loan popularity, the government also stepped in to ensure that loanees are protected from scammers.

How to compare between online loan offers

You might think you’ve gotten a good payday loan until you discover a better one. It’s prudent to work with the best available options, paying attention to the finest details so you can end up with an option you’ll be most comfortable with. 

Some of the factors to give great consideration to are the interest rates, the cost of the link, any added costs like commissions, and the repayment period. 

How to use FUNDGECKO to get payday loans

FUNDGECKO loan guidelines walk you through the whole process of application by informing you about the characteristics of different options, and their terms and conditions. We do this intending to make our customer’s decision-making process very easy.

So what are the steps to take?

• Identify several customer credits you’re interested in then compare their services for free.
• Pay careful attention to their terms and conditions to discover any unique specifications.

Our FUNDGECKO forum will be there to assist in case of any doubts. Our team of experts will walk you through each loan website, assisting you to get started with the loan option you settle for.

You have an option to leave your reviews in the comments section if you’d like to share your experience with other users.

How to apply for a payday loan 

While the process of getting a quick loan can be unique to the lender, we’ve listed down the steps you’re most likely to follow with all loan options. The following steps will guide you to getting financed easily and conveniently.

1. Find at least three loan options that you’re interested in and compare their services.
2. Use our data to fill out the application form giving considerations to their operations and conditions before submitting it to the financier, either online or in dropping it at their offices.
3. You’ll receive a pre-approval notification in a matter of days for the physical application and instantly if you submitted the application form online.
4. Submit the required documentation either through their online platform or in person.
5. Read between the lines of the pre-contractual information you receive after your loan is approved. There, you’ll learn everything about your future loan including the commissions, interest, term, and loan amount.
6. Sign up for the contract if you agree with their terms and conditions (in person or by digital signature).
7. Get the funds either immediately or after 2 days at most, depending on the lender.

Requirements for payday loans in Kenya

What exactly does it take to qualify for a payday loan in Kenya?

• Be 18 years and above
• Be a Kenyan resident or citizen
• Have an M-Pesa account that’s been active for at least 6 months
• Depending on your lender, you might need an active Facebook account 
• Some lenders will only give loans to employees who have a source of income
• You might be required to demonstrate your ability to pay a loan

Payday loans are among the leading causes of indebtedness in Kenya. Hence, apply for a loan size that you’ll comfortably pay back.

Documentation for applying for a payday loan

• Have a national identification card or any other valid form of identity
• Some lenders might request your proof of income
• You might need to present your proposal – how you’re planning to spend the funds (mostly with big loans).

Be sure to know and submit the required documentation during the application process to avoid the hassle of going back and forth.

Who grants payday loans in Kenya?

Since the introduction of M-Shwari in 2012, many other payday loans found their way into the market, breaking the dominance of banks in offering these loans.

Entities that grant payday loans:

1. Banks
2. Credit Financial Institutions (CFI)
3. Private lenders
4. P2P lending platforms

Payday loans through banks

• Friendly interest rates
• Flexible loan limits
• Longer repayment terms
• More financial products than other entities
• Strict eligibility parameters like seniority and good credit history
• Longer application process than other entities
• Loanees tend to receive a portion of the amount they sign up for

Credit Financial Institutions

• Hassle-free application process
• Reasonable interest rates
• Wider range of financing options than banks
• Strict eligibility parameters

Loans through online private lenders

• Less strict eligibility criteria
• Seniority is not often required
• Get funded on the same day
• Extremely high interest rates
• Can lead to over-indebtedness

Loans through P2P platforms

• Convenient financing options
• Fast online application process
• Lower interest rates
• Lack of government protection or policy
• Applicants with good credit scores are preferred

FAQ: Frequently Asked Questions

What is a payday loan?

In Kenya, a payday loan is an unsecured type of short-term lending. The lender will expect you to repay the loan after an agreed period of time. Their interest rates are normally high and the loans are given without collateral.

According to the Central Bank of Kenya, loanees who fail to repay an amount less than $10 will not be listed on the Credit Reference Bureau (CRB). Meaning, you’re likely to develop over-indebtedness if you don’t use the loans responsibly.

Why don’t you give me a payday loan?

There are few deterrents to getting a payday loan in Kenya. One reason could be the failure to fill out the correct personal details. Moreover, some lenders only give loans to Kenyan lenders.

What is the binding offer of a payday credit?

Payday loanees have the option of asking for a binding offer, where the entity lending the loan abides by the conditions of the loan it’s giving out for at least 14 days.

Can I repay a payday loan in advance?

The Kenyan law has allowed loanees to repay loans in advance, whether in part or the whole amount. In both cases, the loanee is required to pay back the interest accrued and give prior notice before making the payment. 

What if I take out a loan online then regret it?

If you feel like withdrawing a loan you’ve already received approval of, Kenyan law gives you the right to do so within 14 days after application.

What happens if I don’t pay back a payday loan?

Failure to pay back a loan means developing a poor credit history and may end up with you listed on CRB. Both circumstances will hinder you from getting a future loan, especially with big payday loans.

When to apply for a payday loan

A payday loan is able to bail you out of your financial crisis in a shorter time than you expected. It is what you need when you want to finish a project but can’t get enough funds from other sources. 

Using the lenders we listed above, the application process should be very smooth with the help of their amicable customer care services.

If looking for a big loan, be sure to present some valid form of income. For foreign income, the process might be a little hectic but successful if you have the required documentation.

When to apply for a fast loan

Fast loans come into the picture when you need a quick financial fix. However, we recommend complete loans except for emergency cases, to avoid over-indebtedness.

Wrapping Up

It’s very easy to fall into the hands of scammers. Hence, stay safe and only accept loans from a verified lender.

We hope that one of our recommended options ends up being your financial solution.

About this page, our methodology

What is this page for: we’re here to help you end up with a financial product that best suits your needs and their peculiarities. We, therefore, walk you through the best available loan options in the market and help you find the option that’s the most compatible with you at the moment.

Source: Information about the Kenyan government regulatory measures on loan interests among private lenders was sourced from the Central Bank of Kenya’s 2021 statistics, among other reliable sources.

Methodology: data about the characteristics of the above-mentioned financial products was obtained through thorough online research and consultation of the official statistics of the aforementioned reference sources.

About us: FUNDGECKO is an online comparator platform that seeks to help users to compare the best available financial offers at no charge. 

Note: Our services include no charges at all. FUNDGECKO gets its income from advertising and its featured products.