In a move to ensure that the teachers’ pay is protected, the Teachers Service Commission (TSC ) has been always asking all teachers with Check off loan Facility to careful and alert at all times.
A check of loan is a loan that must be repaid in equal monthly payments that is withheld from your paycheck.
The withheld amount of money is then transfered to your bank (using a cheque) to lower your loan balances.
According to the commission, all those teachers that are servicing bank loans from any of these regional financial institutions, like Equity bank , KCB Bank, Co-operative Bank, or Barclays Bank among others must be aware of some important facts.
When it comes to repayment of these loans, those who have used a check-off facility loan where the company deducts money from employees’ paychecks and surrenders the same to the bank, the teacher must be extremely cautious.
Fir a teacher to avoid the possibility that ending up repayment of the loan three times or more in the long term, TSC has asked teachers to ensure tracking of their records regularly.
With those having check of loans, the bank divides the monthly cheque off loan deduction amount in half.
Part of the share deduction goes to the bank’s interest as the smaller share going towards paying down your principal is catered for.
Taking an example ; Incase you have your monthly loan payment at Sh20,000,her is how the bank will clear your loan :
- only Sh8,000 will be used to pay off the principal amount
- The remaining KSh12,000 will used to pay off the bank’s interest.
With those who have the check of loans, they must be aware that as time moves closer to the end of your loan repayment duration, your interest amount deduction gradually lowers.
On the other hand,your principal amount deduction grows.
Then note that the longer the length of the payback period , the more the amount of interest is normally paid on the loan to the bank.
Disadvantages of check of loans
At some given point , one may think that they finished paying off their loan balance but later to be shocked when realizing that the bank continues to make demands.
Teacher in class with learners; Image/ Courtesy
In circumstances where your employer for example TSC doesn’t send the monthly loan deductions, the bank where you borrowed the loan will accrue penalties that you would have to pay dearly.
Fir purposes of ensuring that you are safe , make it a routine of making calls or visits to your bank to make enquires for this crucial loan .
This will necessitate operations of your loan facility is without any problems.
Also ensure that as teachers you monitor your monthly check of loan deductions on your payslip, as a way of keep an eye on your lending facility deductions.
Good reporting but a lot of repetition in your reports.
Make it precise and more factual
Thanks. I always trust my employer.
Exactly, that is what the banks does.how çan we escape from this tortures?? I think teachers should be getting loans from tsc at a lower interest rates .
Thanks for keeping us updated.
For KCB bank check off loans call 0708498223. Only three day processing.
I suffered after kcb loaned me.No sooner had I finished my loan than another loan appeared on my slip.Their excuse was system, system system..In short Sacco loan is the best
Is it true that Tsc doesn’t remit the deduction on time?because bank claims 3 months delay
Thanks for that,what about michrofance which charge more than 200% interest eg one is given 100000/ and pay 800000/