Student Loans in Kenya, All You Need to Know:

At FUNDGECKO, we take time to conduct thorough research and come up with the best student loan options. Compare the best student 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.

Key things you should know about student loans:

• There are different types of student loans. Hence, each will address different needs
• Student loans are way better compared to other types of loans in terms of repayment periods, building good credit scores, and others.
• You might have to provide a guarantee so you can get the funds
• A parent can apply for a student loan and repay them on behalf of their children
• HELB occasionally announces 100% waiver to encourage their beneficiaries to repay the loans without any penalties. The agency recently announced the waiver phase which ends at the end of March 2022.
• Beneficiaries enjoy a grace period of more than a year.

Types of student loans we can apply for

Some loan providers will reimburse the funds directly to your school’s account. However, other lenders can allow you to do much more than just financing the tuition fee. The loan can be used to fend for needs related to your studies such as transportation, hostels, and the likes. Let’s delve into the options you can get with a student loan:

• Financing your studies. In this case, you have two options for your studies:

1. The lender can choose to fund the tuition costs only by sending the cash directly to your school’s account, either in total or as a percentage, depending on the conditions of the loan.
2. With other options, the loans can finance the tuition fees and extend to covering other related expenses including paying for your hostel, transportation, and even educational trips.

• Scholarship advances: you can get a scholarship to either study in Kenya or abroad. However, in either of the options, many scholarships will fund after the academic year begins. This is why many scholarship students apply for scholarship advances so that they can repay the loan once they receive the scholarship funds.
• Post-graduate studies such as a master’s degree, a doctorate, and the likes. In most cases, the student will only receive the tuition fees and be required to fund the other related expenses.
• Studies abroad: for whichever course, the lender will provide an advance of the scholarship amount, just as in scholarship advances, and require repayment after the student receives the scholarship funds.
• Specialized courses: they’re mostly short courses such as CPA, computer classes, among others.
• Financing of laptops: this particular option is available in both banks and other lenders. The repayment conditions are friendly and less pressurizing. 

It’s now clear that depending on your study’s specifications, you cannot qualify for just any loan. That makes it essential to do personal research or inquire with the loan provider before applying for a loan.

Financing linked to the institution

In Kenya, almost every institution of higher learning has made agreements with banks or loan institutions that provide student loans. The loan institutions provide the funds before the beginning of the course and are available during the student’s admission process. These loan options have proved to be way better than other options out there, especially because they are customized to suit your course’s particular needs. 

Therefore, it’s advisable to inquire whether a school has these loan options before you’re registered or admitted into the school.

Are student loans cheaper?

Student loans in Kenya are generally cheaper than other loans. You can get a student loan with an APR as low as 6% while the fixed interest rate for other loan options is 12% in Kenya. However, the cost of your student loan depends on its terms and conditions.

Student loans also have other advantages like longer repayment periods, friendly repayment terms and in some cases, students enjoy 100% waivers (especially with HELB loans). 

Characteristics of student loans

• Student loans are considered generally good, compared to other loan offers. So what makes a good student loan?
• Low interest rates: In Kenya, you’re able to find a student loan with a 6% interest or lower. That’s what most people go for. Anything more than 8% should be considered expensive. 
• Commissions: this is the second aspect you need to look out for to avoid facing any additional payments in the future.
• Some loan providers will have you pay the opening fee in the first month of your repayment. The opening fee is normally 3% (at most) of the total loan amount. 
• You’ll only be required to pay the early repayment fee if you opt to repay the loan before the set time. Inquire with your lender about the early repayment fee.

Seek to know if your lender will ask you to have some type of tying, which in many cases includes free tied products.

• Guarantees: the lender will ask you to have a guarantor if you don’t have any form of income. 
• Read through the contractual terms and conditions to get the full details of the option you’re settling for. This will help you prepare for every payment you’re supposed to make without any surprises.
• Requirements for applying for a loan as a student
• Requirements for applying for a loan as a student are not as strict as in other types of loans. As lax as they may appear, the applicant will be required to abide by the set terms and conditions to be considered eligible.
• Age. Not all people can apply for student loans. These loans can only be provided to people of the legal age, which is 18 in Kenya. If younger than that, the parent or guardian will be required to apply for the loan instead. 
• If the parent makes the application, the financiers will be free to give the loan only if there are no bad credit records. Some lenders will look at whether your name is registered on Credit Reference Bureau (CRB) before approving the application. 
• Be a student at any institution within Kenya. Salaried applicants seeking to advance their studies are also eligible for these loans.
• For the case of salaried individuals, you’ll have to submit documents that show proof of income. 

Applicants without income can also benefit from these loans if:

• The parent or guardian applies on their behalf or becomes their guarantor
• The loan provider requires repayment after completing studies and provides a grace period within which the applicant can look for a stable source of income.
• The applicant applied for a scholarship advance, whereby the loan will be repaid once the scholarship funds are received
• The applicant applied for a studies abroad scholarship where they will repay the advance after receiving the scholarship funds.

In this case, you can only apply for a student loan option that’s compatible with your training needs.

Can I get a student loan without working?

Yes, you can qualify for a student loan in Kenya without working if only you’re able to get guarantors with a stable source of income to step in in case you’re unable to repay the loan. 

However, some entities will not approve your application if you don’t show proof of payment. This is because they only require one holder. If applying for these types of loans, be sure to have a stable job.

There are study credits that can be paid later?

A student loan is referred to as good debt. This is because the loans require repayment after completion of studies and include some grace period during which the loanee can go without paying anything and in rare circumstances be required to make some payments, depending on the entity. 

In many cases, beneficiaries of student loans are able to have some form of income by the time they’re required to start making repayments.

Wrapping Up

It’s very important to do personal research or inquire with an entity to know their terms and conditions before you sign up for a loan contract. This will help you plan wisely on how you’re going to make repayments in the future.

We hope that you’re going to settle for one of the listed best student loan options.

About this page, our methodology

What is this page for: we’re passionate about helping you to get the best financial options in a fast and convenient way. Therefore, we marshal up all the information you need about the kind of credit you need to equip you to make a good financial decision.

Source: the information about the APR and securities has been sourced from the Central Bank of Kenya statistics, among other reliable sources.

About FUNDGECKO: we are a team of experts specializing in personal finance and home economics products. FUNDGECKO is an online comparator website that helps you to not only compare the best available student loan options but also feeds you with rich information about student loans, helping you to make a personal decision viz-a-viz your unique needs.

Note: we offer our services free of charge as FUNDGECKO obtains its income from advertising and its featured products.