You might be paying more due to recent development in the Economy.
Without warning, Banks are revising their interest rates, which will hit some customers hard, especially Public sector workers and Civil Servants, already, they are requesting for an increment in base pay, which is not coming.
From this month forward don’t be alarmed when you see extra deductions.
An Audience sent this to us. A message he received from the Bank.
”Developments in the economy have led to increase in interest rates which has resulted in the GRR, increasing from 14.18% in March 2022 to 27.44% in October 2022.
As a result of this, the Interest rate on your loan will increase effective 1st November 2022, in line with the terms of your facility Agreement. Your monthly repayment amount will now increase. detail figures deleted
The Bank has made efforts to keep this increase delayed and to the minimum. We remain committed to supporting you in these challenging times.
You may kindly call on your nearest branch or call our Customer Service should you need any further information.
Can the Bank increase the rate on already signed Loans/ Contracts
The banks have two type of loans, Loans which are given on fixed rates and those given on variable rates.
Did you take time to read all the terms before applying for your Loan? Possibly No. Even if you did, you didn’t understand and you also didn’t care.
What Is a Variable Interest Rate?
A variable interest rate, sometimes called an “adjustable” or a “floating” rate is an interest rate on a loan or security that fluctuates over time because it is based on an underlying benchmark interest rate or index that changes periodically.
The obvious advantage of a variable interest rate is that if the underlying interest rate or index declines, the borrower’s interest payments also fall. Conversely, if the underlying index rises, interest payments increase. Unlike variable interest rates, fixed interest rates do not fluctuate.
Some are asking, should the interest rate decline, would the bank have reduced the payment interest, the answer is yes.
What Is a Fixed Interest Rate?
A fixed interest rate is an unchanging rate charged on a liability, such as a loan. It might apply during the entire term of the loan or for just part of the term, but it remains the same throughout a set period.
You need to tell your Loan officer exactly what you want.
Please, when taking a loan or signing a contract, kindly read all terms and conditions, you can ask all questions as well.
It’s just unfortunate this is happening at this time.