The following Charges are levied by external parties and may be beyond the Bank's control:
Lawyers Fees: The amount indicated is charged by the appointed external Lawyers according to the Advocates (Remuneration) (Amendment) Order, 2014 (as varied or amended). It does not include VAT and disbursements as these will be clear after the Lawyers have completed their work.
Credit Life Insurance: The amount indicated above is charged by The Insurer on The basis of The Option selected by The borrower for The period of The Facility.
Government Levies: This means Excise Duty at 10% of the Application/Processing/Initiation/Arrangement/Commitment Fees charged.
Valuation Fees: The amount indicated is charged by the appointed Valuers according to the Land Valuers Licensing (Remuneration) Notice 2013 (as varied or amended). It does not include VAT and Disbursements as these will be clear after the valuation work is complete.
Security Registration Fee:The amount is payable to the Government Registry where the Security will be registered and has not been indicated within this online APR calculator.
Other Third Party Costs: There are other costs associated with the facility that may not be within the lender's purview and therefore have not been factored into this APR calculator.
Commercial banks in Kenya have adopted the Annual Percentage Rate (APR) pricing mechanism, which enables consumers to compare different bank loan costs based on standardized parameters and a common computation model.
This site provides you with information on the APR and features a simple APR calculator, which loan applicants can use to estimate the total cost of a bank loan. In addition to providing you with an APR, banks are required by the Central Bank of Kenya to provide you with a Total Cost of Credit breakdown as well as a loan repayment schedule.
How Total Cost of Credit and APR are Derived
There are various costs associated with a loan. These costs are in addition to the interest rate component, and range from bank fees and charges to third party costs, such as legal fees, insurance and government levies.
Because loan applicants will tend to focus only on the interest rate when making a loan decision, banks have proactively adopted the Annual Percentage Rate or APR model which converts all direct costs associated with the loan (also known as the Total Cost of Credit) into one number.
With the APR, borrowers are empowered to comprehensively compare different loan products on a like-for-like basis, based on the total cost of the facility; and therefore make better informed credit decisions.