Best Bank Kenya
Many people who take loans from banks and are unable to repay as per the agreement end up having sleepless nights. Times have become tough economically not only in Kenya but across the globe. The thought of your house being repossessed and auctioned by the bank to recover their money can be scary.
Fortunately, you should not fear because banks have been barred from selling privately owned properties in the name of recovering their loans. Some banks prefer settling loan payment cases outside the court since even auctioning doesn’t seem practical.
Before the law was passed, there were too many cases of lenders auctioning private properties of their loan defaulters. The worst part about such auctions is that your property could be auctioned at a value that is 30 % less than its market value. Banks preferred auctioning such properties at public auctions because the process was fast.
What Borrowers Need To Know When Borrowing A Loan
No one borrows a loan with the intention of not paying it. Mainly, the high-interest rates cause many to default, and banks should understand that. Are you a defaulter and wish to know your rights? Here are some of them.
- Grace period: Your lender should give you a favorable grace period to repay your loan. They, therefore, should not take a recovery action before the lapse of the grace period. In case of emergencies and a life crisis, you will repay the loan within the grace period. No financial institution is allowed to take action before allowing you time to pay.
- As a borrower, you retain your rights, and no bank is allowed to use violence or threats to recover their money from you. In case your lender becomes abusive in any way, you have the right to report them without hesitation.
- Full Recovery Value-If you are unable to pay the loan and the bank takes your property away, it is your right to get the value of your property back. The lender should only recover the amount you owe them and give the balance to you.
What Does The Law Say About Loan Recovery and What Should Be Done
Due to the mistreatment of most loan defaulters, the law had to come in. And here are some of the things you need to know.
- A new valuation has to be done before a charged property is sold. This is to know the status of the market value. Any lender who fails to do so breaks the law.
- The bank should at least sell the property at the highest market value to cover the outstanding balance and ensure the borrower gets the balance..
- The bank must involve spouses, tenants, and guarantors before selling the property used as collateral.
As a borrower, you deserve respect and peace of mind, and no bank is allowed to be violent to you. Nevertheless, ensure you borrow a loan with an interest that you can comfortably pay to avoid trouble.
We have financiers who can help you acquire property with Denver Group Limited. We cheap plots for sale which have ready Title deeds, thus, it is easier to get a loan fast from best banks in Kenya.