Education is expensive. Especially when you don't have a financial cushion to fall back on when it is time for back to school or if your child will be transitioning from primary school to secondary school this coming week.
School reopening began on the 23rd of this month and most students have already resumed school. If you have a child joining Form One, you have till between February 6 and February 13, 2023, to get your money and other affairs in order.
Less than one week to go! Are you prepared financially?
The rush and pressure to get various necessities such as uniforms, beddings, the litany of mandatory books etc. needed to join school is real. To add to that, you also need school fees especially if your child will be joining a boarding school. Time may not be on your side and you really need all the help you can get to offset all these bills.
You might be able to borrow money to pay for your child. You can choose to take a salary advance if you are salaried, but you will have to pay it back with your next paycheck and it might put a dent in your budget the following month.
Is there any other available option? Yes!
You can borrow money from financial institutions like banks or Saccos to pay for school fees. But given that you're running out of time, and depending on the amount you are planning on borrowing and whether or not you already have existing credit with these institutions, this option may not be the most feasible as of now.
If that is the case, what additional options do you still have?
Did you know that you can use your car logbook to obtain funds to cover school costs from a microfinance institution (MFI)?
MFIs offer some of the fastest loan processing speeds for logbook loans compared to other financial institutions. Some of them can process and disburse the funds in one day if you meet their requirements.
Also, depending on the amount you need, most logbook loans have longer repayment periods compared to short-term loans which can allow you to spread the repayments according to your flexibility.
Would you like to know more about this? This article discusses how you can use this type of loan for school fees purposes.
Read Also: Back to School: Fees and 5 Other Things to Plan For Today
A school fee loan is a short-term loan given by a financial institution to be used to pay for school expenses.
A fee structure may be required by some schools, and payments may be made directly to the student's school's bank account.
Depending on the amount, the period of a typical school fees loan ranges from one to three months.
There are many other school fee loan types that do not follow this pattern and are more like regular personal loans that parents take out to pay for school expenses.
Although a personal loan does not restrict how you can spend the money you borrow, you will typically be required to indicate the purpose for the loan during the application process.
There are a variety of institutions from which you can obtain a personal loan. Some of them include; Commercial Banks, Microfinance Banks, Non-Deposit Microfinance Institutions, SACCOs, and Government Parastatals.
Read Also: Back to School: Where to Get Quick School Fees Loans in Kenya
A logbook loan is a type of loan where the collateral is your car, truck or van.
This loan gives you the option to borrow a specific amount from a lender against the value of your car. The logbook, which serves as proof of vehicle ownership, must be provided to the lender in order to qualify for the loan.
In exchange, the lender receives temporary joint ownership of the vehicle through a process called “In-charge”, up until the loan amount plus interest is paid in full. Throughout the term of the loan, you can use the car as usual.
Loan repayments can be made weekly or monthly.
The logbook will be transferred back to the original owner once the loan has been settled.
Read Also: All You Need to Know About Logbook Loans in Kenya
You have just this week if your child is joining secondary school to raise the funds needed to comfortably send them to school.
The speed of loan processing may therefore one of the most critical factors for you to take into account if you decide a loan is what you need for this purpose.
Depending on the amount borrowed and the conditions set forth by the lender, the payback periods for logbook loans might last anywhere from one month to several years.
This is yet another feature of these loans that may be appealing to a parent who needs longer repayment terms than a standard personal, emergency, or school fee loan offer.
You can use a logbook loan to quickly get the funds you require while still operating your car as usual.
To find out if there is a product that is ideal for you, use the Money254 logbook loan comparison tool.
You should check to see if you meet the lenders' minimum loan qualification requirements before starting the loan application procedure. This will help you choose the lender and logbook loan product that best suits your needs.
Read Also: Advantages and Disadvantages of Logbook Loans in Kenya
2. The minimum and maximum amounts you can borrow
You should determine if the minimum and maximum loan amounts offered match your needs when thinking about taking out a loan for school fees and related expenses.
3. The approval time
Given that many of the institutions offering this loan type promise quick turnaround times, a logbook loan is one of the quickest solutions to take into account for school fees.
Before signing the loan agreement, however, ensure you completely grasp the costs and risks of logbook loans because they can be more expensive than regular personal loans.
Additionally, the possibility of losing your car exists.
Read Also: Why are So Many Kenyans Taking Logbook Loans?
4. Your Ability to Repay
Before you take out a loan, you must be sure that you will have the funds to repay it and that you will be able to easily pay back the loan's monthly instalments while also fulfilling your other responsibilities.
The availability of logbook loans is higher because of the increasing number of lenders who are now providing them online.
Checking your eligibility is all that is required to apply for the loan. Once you've done so, you can submit an application online and expect approval confirmation. It is essential to conduct your research before applying, though. Choose a lender after doing your research, and make sure they suit your needs.
>>>>> Compare Logbook Loan Providers in the Kenyan Market here
You can anticipate a quick loan approval as long as you satisfy the criteria and have the required paperwork on hand. Some lenders even promise same-day approval and disbursement. Fast loan approval is a strategy used by Microfinance institutions given the increased competition in the loan market.
Flexible Loan Amounts
Loan amounts for logbook loans are more flexible than for unsecured loans like payday loans or salary advances because they are secured by a car. You can obtain a logbook loan for a sum ranging from Ksh50,000 op to Ksh25 million depending on the lender and the value of your car. Additionally, this signifies that a wider range of financial demands can be met through logbook loans.
Flexible Loan Duration
The repayment term for logbook loans is just as varied as the loan amount. Depending on how much you can comfortably afford to pay each month, you can choose a loan period from 3 months to a couple of years.
Read Also: Should I Take a Logbook Loan for an Emergency?
Logbook loans have higher interest rates than conventional personal loans, sometimes substantially higher than the lending options available to borrowers with good credit.
Repossession of Your Car
The worst scenario for you with a secured personal loan is repossession, which will also negatively impact your credit score. You essentially give joint ownership of your car with your lender when you sign the debt agreement. That implies that the lender has the legal right to reclaim your car in accordance with the contract.
Repossession, which occurs when you skip payments for a number of consecutive months, is typically the last option. This is also after communication from your lender, and you failed to respond. Note that repossession for some lenders can happen as quickly as as after a two-week notice lapses.
You can start the process of comparing the logbook loan choices offered in the Kenyan market here if you believe a logbook loan is the best option for paying for your children's educational expenses.