Checkoff Loans in Kenya and Rates [2021 Update]

In today’s article, we will look at the various places that employees can secure checkoff loans in Kenya and their rates. We will define what a checkoff loan means, its advantages, and the various institutions that offer these loans.

What is a Checkoff Loan?

A checkoff loan is a loan made available to employees of a particular company whose employer has signed an MOU with a lending institution to give its employees loans.

The loan repayments are deducted directly from the employee’s salary and send to the lending institution.

Therefore, the responsibility to remit the loan repayments lies with the employer.

Why take a Checkoff Loan?

  • Checkoff loans are quickly processed within the shortest time.
  • Sometimes an employee can enjoy a lower interest rate depending on the negotiation between the employer and the bank.
  • Moreover, one is not required to present security to get a checkoff loan. The only proof of employment is needed.
  • Repayment terms are also more flexible than when you take any other loan from the bank.

Checkoff loans Providers in Kenya?

There are many lending institutions offering checkoff loans in Kenya. The good news is that most employers might have an MOU with more than one lending institution. Therefore, making it easier for an employee to choose from a wide range of lending institutions to secure their checkoff loan.

1. Equity Bank Check-off loans

Equity Bank is the most popular lending institution with MOU with various companies to offer checkoff loans to their employers. There are no lengthy procedures to put up with before securing a loan.

Moreover, this checkoff loan has a repayment period of up to 12 months, and one can access up to KES 300,000.

All that one needs to present is an introduction letter from your employer and copies of your payslip for the last 3 months.

2. Absa Kenya loans

Absa Group offers checkoff loans for employees whose employers have signed an MOU with them. Therefore, if an employee is experiencing a personal emergency, they don’t have to worry about it because Absa got them.

It’s worth noting that all that one needs to present to the bank before accessing this loan is copies of bank statements and the most recent payslip.

Features of Absa Group Checkoff Loan

  • The repayment period is between 12 – 72 months
  • No security is required to access the loan
  • Absa Group offers competitive interest rates as compared to other banks
  • One can borrow up to KES 6,000,000
  • Through this loan, one will gain access to affordable life insurance.

3. Faulu Bank Kenya

Faulu Bank Kenya is very particular about the kind of employees it offers its checkoff loan. In this regard, one has to be employed by TSC, the disciplined forces, parastatals, civil service, and county government.

Benefits of this loan

  • This checkoff loan has a repayment period of 84 months
  • One can borrow between KES 10,000 to KES 3,000,000
  • The top-up feature is available.

4. Family Bank

The family bank is another financial institution offering Checkoff loans in Kenya. To be able to access this loan, one has to meet the following requirements:

  • Present filled checkoff loan application form in duplicates
  • 2 recent passport size photos as well as 3 copies of ID
  • Payslips for the last three months
  • Their bank statements for the last three months
  • KRA pin certificate

Features of Family Bank Checkoff loan

  • One can secure up to KES 3,000,000 without security
  • This loan is to be repaid within 72 months
  • Enjoy insurance cover over disability and death
  • Loan buy off and top up features is available.

5. KCB Checkoff loans

KCB Bank is well known for offering the most innovative loan products and services to its customers. As a result, it has the most innovative checkoff loan product.

As long as one’s company is an MOU with KCB bank, one can access up to KES 4,000,000 without security at only a 13% interest rate.

The repayment period is within 6 years.

Moreover, it is straightforward to secure this loan as there are no long bureaucratic processes to be followed.

Conclusion of Checkoff Loans in Kenya

There are many financial institutions offering checkoff loans in Kenya. All that one has to keep in mind is that their employer must be in MOU with the financial institution before securing the loan.