Loan Agreement Sample Kenya

Loan Agreement Sample in Kenya: Everything You Need to Know

If you are planning to take out a loan in Kenya, it`s vital to have a comprehensive loan agreement in place to protect both you and the lender. A loan agreement is a legally binding document that outlines the terms and conditions of the loan, including the amount borrowed, interest rate, repayment terms, and any other relevant information. In this article, we will take a deep dive into loan agreements in Kenya and provide you with a sample to help you get started.

Key Components of a Loan Agreement

A loan agreement should include the following key components:

1. Loan Amount: This is the total amount of money that the lender is providing to the borrower.

2. Interest Rate: This is the percentage of the loan amount that the borrower is required to pay back in addition to the principal amount.

3. Repayment Terms: This outlines the repayment schedule, including when the loan must be repaid and how often payments should be made.

4. Late Payment Fees: This specifies the fees that the borrower will be charged if they fail to make payments on time.

5. Collateral: This is any asset that the borrower pledges as security for the loan.

6. Default Clause: This outlines the consequences if the borrower fails to make payments or defaults on the loan.

Loan Agreement Sample

Below is a sample loan agreement that you can use as a guide when creating your own:

Loan Agreement between [Lender Name] and [Borrower Name]

Loan Amount: [Amount]

Interest Rate: [Rate]

Repayment Terms: [Terms]

Late Payment Fees: [Fees]

Collateral: [Collateral]

Default Clause: In the event of a default, the borrower will be responsible for [Consequences]

1. Loan Amount

The lender agrees to provide the borrower with a loan of [Amount] on the terms and conditions set out in this loan agreement.

2. Interest Rate

The borrower agrees to pay interest on the loan at the rate of [Rate], calculated on the outstanding principal balance from time to time until the loan is paid in full.

3. Repayment Terms

The borrower agrees to repay the loan on the following terms:

– The loan will be repaid in monthly installments of [Amount] over a period of [Terms].

– The first installment will be due on [Date] and subsequent installments will be due on the same day of each month thereafter.

– The borrower may prepay the loan at any time without penalty.

4. Late Payment Fees

If the borrower fails to make a payment on or before the due date, the borrower will be charged a late payment fee of [Fees] for each day that the payment is late.

5. Collateral

The borrower pledges the following assets as collateral for the loan:

[List of Collateral]

6. Default Clause

If the borrower fails to make a payment on or before the due date or otherwise defaults on the loan, the lender may exercise any of the following remedies:

– Declare the entire outstanding balance of the loan immediately due and payable.

– Take possession of the collateral and sell it to recover the outstanding balance.

– Pursue any other legal remedy available to the lender.


A loan agreement is a critical document that protects both the lender and the borrower in a loan transaction. By outlining the terms and conditions of the loan, a loan agreement helps to ensure that both parties understand their responsibilities and obligations. When creating a loan agreement, it`s important to ensure that all key components are included and that the language used is clear and concise. By using the sample loan agreement provided above as a guide, you can create a loan agreement that meets your needs and protects your interests.