Last updated on September 22nd, 2022 at 12:31 am
Mobile loan apps in Kenya have become very popular ways of borrowing quick mpesa loans for emergencies or other reasons. Given that these loans are very easy to apply for and qualify for, many people borrow using these facilities. It’s true, this cash can be very helpful but it is also necessary to have a good limit, use the money wisely, and payback on time. Find 11 tips below that help you to do exactly this.
When you are applying for a mobile loan through the many apps in Kenya, you want the process to be smooth and at the end of it, you get a cash loan you wanted. sometimes this can be tough, but if you don’t want to waste your time, keep reading to get the best tips.
These tips will come in handy by helping you apply for a loan when you really need one. Also a few tricks we discovered when applied can help increase your chances of qualifying for an emergency loan.
Table of Contents
1. Borrow only what you need (can afford to repay)
We know that having easy money is very tempting. But the part most people forget is that in the long run, you have to repay the money you borrowed. With this in mind, only borrow the amount you require from these mobile loan apps.
This is one of the most important mobile loan tips, borrowing money only for what you need. That way, when it’s time to repay your loan, you can do so comfortably with no pressure.
2. Be thorough during Mobile loan Registration process
Be very vigilant/careful when carrying out the loan registration process. Online registration forms for various loan apps require you to give a lot of sensitive information.
Most users may find this intrusive, but there is just no other way. However, be careful which apps you give your information to.
A mobile loan tip you should follow is to check to make sure that they have outlined in their terms and conditions that the data is secure and that it is not shared or sold freely.
Mobile Loan tip on limits and how you can qualify for a large limit
What is a loan limit? This is the maximum or minimum amount one can borrow. Different loan apps have different loan limits.
Most of the loan apps apply similar techniques to qualify users for a loan without the borrower necessarily presenting any physical documents. Neither does a person looking to apply have to appear in person or provide security for a loan.
The loan apps are able to do this by creating an instant financial identity for you as a borrower by using your data and algorithms to give you a financial score.
So how do you get a high loan limit when you first apply for a loan, make sure that your:
- Make sure you have enough financial transaction sms in your messages app from mpesa, your bank or sacco.
- Avoid having many messages from debt collectors or CRB.
- Messages from utilities such as KPLC and Nairobi water company may also add weight to your loan application cause it shows you make payments regularly.
- It also helps if you are not listed in the CRB cause of having a bad debt.
Increasing your loan limit to get bigger loans
Here is another tip. When you apply for a loan on these lending platforms, you are always hoping to get the biggest possible loan limit. So what can you do to increase this:
Make loan repayments either before the due date or on the due date
Avoid making late repayments on the money you have borrowed from these mobile loan apps.
Because this reduces your chances of getting an increase in your loan limit. Remember, these mobile apps use technology to credit score their users using algorithms. Unlike humans, if these credit scoring algorithms note any change in behaviour, it directly affects your ability to borrow.
Borrow as often
Being able to make your loan repayments is very important when aiming to increase your limit. However, how often you borrow money from the apps also counts.
The more transactions you have on these mobile loan apps, the more you build your financial identity on the app. Having a positive financial identity means that you as a user of the lending service are paying back the loans on time, but also borrowing often. As a result, your financial identity reflects positively.
But it should be noted that as a user of these mobile loan apps you should always adhere to tip number 1, i.e. borrow only what you need.
Use a promotion code where you can
Promotion codes, or referral codes, are unique numbers that users of the products or the lending app itself give out to new customers to entice them to join and use the service. The promo codes allow you to get a discount or save on your loan when you apply.
So why use a promotion code?
More often than not, promotion codes (promo code, referral codes) are normally handed out by customers who are already using the app. In general, this means that the mobile loan app will use this as a reference. This means that it’s possible for you to qualify for a bigger loan limit. Or at least you will easily qualify for your first loan.
Mobile loan tip on Interest rates
When it comes to mobile lenders in Kenya, they charge a small fee usually a percentage of the amount you borrow.
However, this amount charged is not always referred to as interest. For example, apps like Tala charge a service charge which is calculated the same way interest is charged on loans. While loan apps like Zenka refer to this amount charged as a ‘processing fee’.
Different loan apps approach charging interest in different ways.
But one thing is certain, this interest fee is very high on these short term loans offered by these apps.
Before you borrow a quick cash mobile loan from these different lenders in Kenya, make sure the interest rate is not too high. I understand sometimes you may not have a choice. But you can always counter check to see what other mobile loan options are there that have a lower interest rate.
With most of these mobile loan platforms, whether a mobile app or USSD, the interest rate ranges from 12% to 35%.
Information and data
The data on your phone is very important for loan apps. Because without any other way of verifying a new user, that is what they use to gauge whether or not, as a user (new subscriber), will qualify you for an instant mobile loan.
Yes, it is a compromise between privacy and convenience. Borrowers of emergency loans need to decide which is more important. But this should not worry you as most of these money lending apps in Kenya claim to have high standards of security when it comes to user data they collect.
Information needed by most mobile loan apps varies from access to SMS messages, call logs and even, to some extreme cases, access to your camera.
What information do these apps mostly require? Below find a list that details them.
- WI-FI connection information
- Device ID and call information
Failure to agree to the terms and conditions will mean these lenders will not allow you to use their services.
Platforms on which you can get emergency mobile loans
If you are looking to apply and qualify for an instant m-pesa loan, then you have many options on how you can go about this. In fact, you are spoilt for choice!
The mobile loan market in Kenya is very diverse, offering loans from android apps, apple ios apps and even the M-Pesa menu. Even on non-smart phone (kabambe phone) users can access loans through the USSD service.
So the encouraging news is that, if you are on a mobile phone, you are very likely to have access to a mobile loan facility. Given that there are over 20 loan apps in Kenya.
Defaulting on your loan
Here at saidia, we emphasize that when borrowing a loan, borrow only what you need. Mobile loan apps in Kenya have very strict loan repayment rules. Failure to repay your loan after the agreed-upon time leads to serious consequences.
Defaulting on your loan can lead to you getting a penalty charged on the amount you have defaulted on. For loan apps like branch and tala, they normally charge a one-time default fee. New loan apps in the Kenyan market like Zenka and iPesa charge a daily percentage on the amounts that are late on payment.
Finally, failure to repay the money borrowed from these loan apps will lead to you being listed on the credit reference bureau (CRB). Once listed on CRB, you will be marked as a defaulter and will not be able to apply for loans from other institutions like banks and saccos.
So, make sure you make your loan repayment on time to avoid being classified as a defaulter and being listed on CRB.
Contacting customer care
When contacting customer care for mobile loan apps, the most effective way to reach them is through the in-app chat feature. This feature is found under the app menu.
Other effective ways of reaching customer care for these lending companies, is either through their social media channels or email.
A large number of these mobile money lenders do not have their telephone numbers available to the public. Or sometimes, trying to call customer care with the telephone number provided, ends up in your call not being answered.
So, a quick tip about contacting these loan apps. Use the inbuilt chat support system, reach out to them on social media or just send an email.
Repaying your loan
Always make repaying the amount you borrowed a priority. Ever heard of the swahili saying, ‘Kukopa harusi, kulipa matanga‘ ? It loosely translates to, ‘Borrowing is a wedding, repaying is a funeral’.
This really drives the point home. Borrowing money and receiving it is always the fun part, but repaying is another story.
To avoid these challenges with repaying your loan, first make sure you only borrow what you need and second, budget to repay your loan.
Getting cleared from CRB
To be cleared by CRB in Kenya, you must pay back the full amount owed to the mobile loan app inclusive of fines and penalties.
Once you do this, communicate with the mobile loan app provider and inform them that you have made the full payment. Once they acknowledge your payment, they will send CRB a batch number to verify that you have cleared all outstanding debts with them.
After doing this, your name will be cleared from the CRB. You can check your CRB status from one of the three credit reference bureaus in Kenya that is credit info CRB Kenya, metropol corporation and transunion africa.
Budget for the loan money
Always have a budget for your money. This will guide you on how you spend ensuring that the money goes to the right expenses.
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