Polifinance

Low interest rates are here with us, what are you waiting for?

You have always wanted to take a loan to buy that plot, to boost your business or commit to a mortgage. Calculations based on the huge interest rates that have been charged by banks have always thrown you off.

Now, the politicians have given us the rate capping bill, which means no bank loan should be charged at more than 14.0% interest per annum. This, I believe is the lowest that personal loans can get. Don’t worry about what informed that cap, ask yourself, how can I take advantage of these low rates? Remember the early bird catches the worm and you never know how long this capping will be around given the politics behind it.

Dilly dally not, get down right now and make a plan to benefit from these rates. Is it a mortgage or just a personal loan you want?

For a business owner, among the many things including your grandmothers name that the banks will ask you for, two things are usually make or break. These are proof of steady income for the last six months and audited accounts for the last two or three years for your business.

If you are employed, a letter from your employer and statement for the last one year or so suffices.

You do not have any accounts, leave alone audited ones as we speak and income in your account fluctuates like a girl’s moods in a month.

What should you do now?

The first step is to answer the question; Do I really need this money or I just want to take it for the sake? Will it give me a return of more than the interest charged by the bank. What amount of risk are you assuming? Never go for a loan if you have no idea what you want to do with. It will end up being wasted on entertainment and you will be left with a debt that did not help your long term financial goals.

Next engage a bank. Walk there and ask how you can access a loan. Queue if there is a line, wait patiently for your ticket number to be called without walking out or fidgeting with your phone and starting a social media rant about how slow the bank is; even if you are gen Y and waiting is not in your DNA. If you don’t want to wait in the bank, then get your father or your FB friends to give you the money that you want. Ensure you write down somewhere the list of the requirements, even on your phone it is ok. Just ensure you don’t leave the Bank without the list because your mind is like everybody else’s and you are not special, you can forget.

Next question is; How do I get all the documents requested for by the bank and by when? Engage an accountant and get audited results, they will charge you a fee and that is ok, they have patiently studied their boring accounts and they have babies like you to feed.

In terms of an income to your account, so long as your account has been having activity, the bank will figure out how much you qualify. The simple test is, what is the most minimum that came into my account in any one month. Work with that and get your application going.

Once you have all these things in place, walk back to the bank and hand them over with a smile. Let the banker go through them and patiently wait for the response. If they ask for more information, go and get it. You are the one who needs the money. If they decline, ask for the reasons why it has been declined and if it is something you can work on like very low incomes, go make a plan to increase your income in the next few months. When it comes to getting access to funding, the first time is very hard, just like getting someone to go to a first date with you, but subsequently, that person or the Bank is the one that looks for you for more dates or top ups. Remember in Kenya we have about 40 Banks and you can always walk to the next one if you feel the previous one does not know your language.

Everything said and done, have you ever wondered what the word “opportunity” means, then this is it. It is something that happens in the environment where you are that can benefit you. It only depends on how ready you are to take that opportunity. See you at the bank.

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