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Avalanche reduction in interest rates
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MaichBlack
#11 Posted : Tuesday, July 15, 2014 8:08:27 AM
Rank: Elder

Joined: 7/22/2009
Posts: 7,912
icecube wrote:
Boris Boyka wrote:
obiero wrote:
standard chartered leads the way

14.9% personal,10.9% mortgage though less risk (insurance) fee = hidden charges but it's okay


Those are good rates, but fixed or reducing balance?

Very important to establish this! For example, I'm told the 'cheap' loans Faulu has been advertising are not cheap at all! They are apparently hood winking Kenyans. Those rates are calculated on the principal as opposed to a reducing balance!! This means you end up paying the same or more than someone on a much higher quoted rate on a reducing balance! Mchezo Kasarani!!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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bird_man
#12 Posted : Tuesday, July 15, 2014 8:58:46 AM
Rank: Veteran

Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
MaichBlack wrote:
icecube wrote:
Boris Boyka wrote:
obiero wrote:
standard chartered leads the way

14.9% personal,10.9% mortgage though less risk (insurance) fee = hidden charges but it's okay


Those are good rates, but fixed or reducing balance?

Very important to establish this! For example, I'm told the 'cheap' loans Faulu has been advertising are not cheap at all! They are apparently hood winking Kenyans. Those rates are calculated on the principal as opposed to a reducing balance!! This means you end up paying the same or more than someone on a much higher quoted rate on a reducing balance! Mchezo Kasarani!!

Stanchart...step in the right direction but quite useless.They need to specify whether they will use reducing balance,flat rate or compound interest.

I notice other hidden charges on items such as legal fees,insurance,valuation etc.Can this be factored in the KBRR+K rate?Or is it impossible since they are basically third party costs?
Formally employed people often live their employers' dream & forget about their own.
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meme
#13 Posted : Tuesday, July 15, 2014 9:34:52 AM
Rank: Member

Joined: 7/20/2011
Posts: 161
Location: nairobi
bird_man wrote:
MaichBlack wrote:
icecube wrote:
Boris Boyka wrote:
obiero wrote:
standard chartered leads the way

14.9% personal,10.9% mortgage though less risk (insurance) fee = hidden charges but it's okay


Those are good rates, but fixed or reducing balance?

Very important to establish this! For example, I'm told the 'cheap' loans Faulu has been advertising are not cheap at all! They are apparently hood winking Kenyans. Those rates are calculated on the principal as opposed to a reducing balance!! This means you end up paying the same or more than someone on a much higher quoted rate on a reducing balance! Mchezo Kasarani!!

Stanchart...step in the right direction but quite useless.They need to specify whether they will use reducing balance,flat rate or compound interest.

I notice other hidden charges on items such as legal fees,insurance,valuation etc.Can this be factored in the KBRR+K rate?Or is it impossible since they are basically third party costs?



@bird_man Those third party costs should be included.
Also, stanchart launched a forty five day sale on mortgages, personal unsecured and business loans. So this would suggest this new rates only apply to people who take up loans during this period.
Patience. You cannot have a baby in one month by impregnating nine women....
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  | | Edit by user: Tuesday, July 15, 2014 9:36 AM | Reason: Not specified
Othelo
#14 Posted : Tuesday, July 15, 2014 9:57:25 AM
Rank: User

Joined: 1/20/2014
Posts: 3,528
But even if it is reducing balance but variable ... guys will still be taken to the cleaners in 2/3 years time.
Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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maka
#15 Posted : Tuesday, July 15, 2014 11:37:12 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
MaichBlack wrote:
icecube wrote:
Boris Boyka wrote:
obiero wrote:
standard chartered leads the way

14.9% personal,10.9% mortgage though less risk (insurance) fee = hidden charges but it's okay


Those are good rates, but fixed or reducing balance?

Very important to establish this! For example, I'm told the 'cheap' loans Faulu has been advertising are not cheap at all! They are apparently hood winking Kenyans. Those rates are calculated on the principal as opposed to a reducing balance!! This means you end up paying the same or more than someone on a much higher quoted rate on a reducing balance! Mchezo Kasarani!!


This is the kind of nonsense CBK should rein in,you cannot do this kind of mis selling and go away scott free,they will definitely lose a lot of customers soon.
possunt quia posse videntur
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MaichBlack
#16 Posted : Tuesday, July 15, 2014 12:07:03 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,912
Othelo wrote:
But even if it is reducing balance but variable ... guys will still be taken to the cleaners in 2/3 years time.

Especially for long term loans!

I can just imagine so thread titles in 2016. Examples: "Bank increases interest rates by 7 percentage points. What are my options?", "Monthly loan repayments doubled! Can I sue?" etc.
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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kiwaru
#17 Posted : Tuesday, July 15, 2014 12:12:44 PM
Rank: Member

Joined: 8/5/2011
Posts: 125
maka wrote:
MaichBlack wrote:
icecube wrote:
Boris Boyka wrote:
obiero wrote:
standard chartered leads the way

14.9% personal,10.9% mortgage though less risk (insurance) fee = hidden charges but it's okay


Those are good rates, but fixed or reducing balance?

Very important to establish this! For example, I'm told the 'cheap' loans Faulu has been advertising are not cheap at all! They are apparently hood winking Kenyans. Those rates are calculated on the principal as opposed to a reducing balance!! This means you end up paying the same or more than someone on a much higher quoted rate on a reducing balance! Mchezo Kasarani!!


This is the kind of nonsense CBK should rein in,you cannot do this kind of mis selling and go away scott free,they will definitely lose a lot of customers soon.


The loans are on offer during the 45-day sale period. A month ago I took an unsecured loan that was priced at 18%... this was a month or so after the previous sale when loans were given at 15%. Those who had gotten their loans during the sale period did not suffer an upward adjustment... (at least not yet)
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wangu.n
#18 Posted : Tuesday, July 15, 2014 1:04:21 PM
Rank: Member

Joined: 8/4/2009
Posts: 136
From the ad in today´s paper; personal loans are being offered at rates starting from 14.9% KBRR+ 5.77% then in the fine print there is a tiny remark that KBRR is currently 9.13%.
Someone please explain what this means. Is this what they will show you to get your foot in the door and once you´re in you find a noose around your neck?
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wangu.n
#19 Posted : Tuesday, July 15, 2014 1:13:34 PM
Rank: Member

Joined: 8/4/2009
Posts: 136
Ok, so I have now understood it.
KBRR = 9.13%
Bank´s lending rate = KBRR + bank´s margin, in this case 5.77%
Thus 14.9% charged by the bank = 9.13 + 5.77
The big question now is what happens when this KBRR goes up or down? but of more concern up?
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bird_man
#20 Posted : Tuesday, July 15, 2014 3:17:09 PM
Rank: Veteran

Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
wangu.n wrote:
Ok, so I have now understood it.
KBRR = 9.13%
Bank´s lending rate = KBRR + bank´s margin, in this case 5.77%
Thus 14.9% charged by the bank = 9.13 + 5.77
The big question now is what happens when this KBRR goes up or down? but of more concern up?


It will def go up and down but that should not worry you since your contract says interest rate is e.g 14.9%....well unless in the fine print you went for a VARIABLE interest rate loan!Laughing out loudly

Also...its pretty useless if the bank doesnt say whether this is a reducing balance interest loan or flat rate.You might actually find one banks loan of 9.5% e.g Faulu is more expensive than a loan of say 18% from Equity!

More needs to be done here!Otherwise, haisaidi vile!

Formally employed people often live their employers' dream & forget about their own.
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