HomeJambo InfoBanking and FinanceThis is why sacco loans are more preferable than bank loans

This is why sacco loans are more preferable than bank loans

If you’re keen enough you must have noticed that today more and more banks are pledging to lend cheaply to borrowers.

This has seen Kenyans turn to Saccos, with the proportion of debt from commercial banks.

Saccos are arguably more accommodative in their debt collection than banks, making them a good option during harsh economic times.

Here are some advantages of taking loans from Saccos over banks in Kenya

1. Easy to get loans

Its no lie, SACCO loans are easy accessible compared to bank loans.

Banks will require a host of documents that not all might provide before your loan is approved. SACCOS will only require your contribution record or payslip  to get your loan approved. The great thing about SACCOS is that you can get a loan even if you are not employed.

2. Low interest rates

Banks rates are ever high compared to SACCOS.

Banks have loan interest rates and again they are never the same,  this is where most people won’t imagine how costly it can be to find a bank with low loan interest to get a loan from. What if its an emergency loan?  They’d run to SACCOS.

At any given time, interest rates for SACCOS are lower than those of banks. The most interesting thing is that they don’t change more often.

3. Additional benefits

The good thing about SACCOs is that they go ahead and buy real assets for members.

These are benefits you can’t get from a bank. SACCOs can purchase land, subdivide it and sell to members at a cheaper prices.

4. Flexible payment terms

SACCOs are sometimes lenient on payment terms because the management have strong attachment and knowledge of the loanees

Banks are only interested in getting their money back in a limited time.

5. Dividends

Straight up! Banks don’t appreciate its members, their main aim is to maximize profits and grow their business.

On the other hand SACCO members benefit from annual  dividends which can even be used when applying for a loan.

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