TSC Check Off Loan Facility Crucial Update To All Teachers. A check off loan is a type of loan, typically meant for teachers employed by the Teachers service commission(TSC) and any other salaried civil servant.
Once you borrow the money, it is now repaid back in monthly instalments from your pay slip. The deducted amounts are thereafter transferred to your bank as a cheque so as to reduce and clear the remaining balances.
There is an important update to any teacher who may have borrowed a loan from any local financial institution like a bank. For instance KCB bank, Equity bank, Cooperative bank and Barclays bank.
For any teacher who could have been given a check off facility( a type of loan in which the employer makes monthly deductions to the financial institution eg a bank), it is highly crucial you keep yourself updated and check closely the loan repayment process.
TSC Check Off Loan Facility Crucial Update To All Teachers
To be precise, there is a very big likelihood of this type of loan tripling. It may end up to be quite expensive for you if keen consideration and checking is not done.
It is crucial to note that a check off loan facility monthly deductions are always divided into two by the financial institutions like banks. The bigger share of this amount is used to settle the bank’s interest while the remaining smaller part is used in clearing the initial borrowed amount(principal).
For instance, if one’s monthly loan installment stands at 20,000 shillings, the bank will clear the loan as below stated;
A total of ksh. 12,000 will be going through clearing the bank’s interest and the other ksh. 8000 will be geared towards offsetting the principal amount( initial borrowed money).
Principal amount usually increases progressively as interest amount deduction decreases as loan maturity repayment period proceeds.
Interest paid on the check of loan amount is dependent on the repayment period.
Importantly, with check off loans, the longer you take to repay the amount the higher the interest you repay to the bank.
Check off Loan restructuring and how it may affect you.
The check off loan is a little bit different. This is unlike the secured loan facility (where one personally deposits the monthly installments).
One may think that they have cleared their loan balance (at the expiry of the repayment period),only to be surprised that the bank is still demanding more money.
Just Incase your employer (for instance TSC) fails to send the monthly loan deductions, bank accumulates penalties that you will pay through the nose.
How to avoid trouble on overpayment
Inorder to ensure that your loan facility is running smoothly , it is important to make regular calls or visits to your bank for inquiries as the surest way of ensuring that your loan facility has no issues.
You may also monitor your loan facility is by checking on your monthly deductions on payslip.