5 Things To Consider Before Securing A Logbook Loan

Robert Kibiwott is not a visitor to the credit space. He, once, needed a fast loan to purchase additional machinery, for his manufacturing business with the aim to increase automation and output, amounting to KES. 672,000. Fully aware that he does not qualify for a bank loan due to his bad credit score which led to blacklisting on Credit Reference Board (CRB), he resolved to seek a Logbook Loan at Saidia Credit.
Using his 2018 Toyota Vitz as collateral, he hastily skimmed through the customer handbook and signed off on a KES. 650,000 logbook loan, but only was credited KES. 590,000. Three months in, Mr. Kibiwott defaulted on his loan payment and after several attempts to request a repayment period extension, his ‘Melissa’ as he liked to call it, was repossessed by the financier.

Little did he know, he had signed himself into a 16% monthly interest fee loan, payable in 6 months, with no early settlement and a 3%-of the due amount penalty every time he defaulted on payment.

Below are 5 tips to help you steer clear of Mr. Kibiwott’s predicament; Always consider the below:

1. Terms & Conditions

More often than not, as Terms & Conditions are too lengthy and wordy, customers discard these, eventually legally binding themselves to unprepared financial responsibilities. T&Cs comprehension ensures you note all charges such as processing and collections fees, understand your obligations and timelines and identify customer touchpoints in case of uncertainties. 


Before securing a loan, a customer is advised to assess their ability to repay the loan vis-à-vis their income. Securing affordable loan amounts saves you the ‘debt-shaming’ that comes with the financier’s collection measures. You can come up with a working repayment schedule that advises on monthly instalments and contingency plans.


Interest rates inform you of the cost of your loan. These can be charged at an annual, monthly or daily fee as a percentage of the credited amount. These vary across microfinances in Kenya, regulated by the Central Bank of Kenya (CBK). At Momentum, each customer has a designated relationship officer to guide on repayment amounts. 

4.Security Value

Most microfinances in Kenya offer secured loans against assets such as logbook, title deeds and cheques. This guides the financier to asset credit limits personalized against individual customers. You are advised to understand your vehicle’s value and its viability against the loan requested. In the case of poor repayment, the financier shall secure your vehicle as agreed in the Terms & Conditions. 

5.Loan Tenure 

Customers often prefer longer loan periods as it stretches their repayment plan, reducing their monthly instalment costs. It is advisable to consider a loan that perfectly fits your repayment schedule to avoid debt inconveniences and repercussions.

Loans in Kenya

Momentum Credit takes pleasure in serving its customers, expanding their possibilities, and transforming the lives of Kenyans by providing access to affordable Logbook Loans and other financial services. For more information about our products, visit https://momentumcredit.co.ke/  or call 0709434000 today.

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