With the growing demand for quick and accessible loans in Kenya, digital lending platforms have become a go-to solution for many borrowers. Two of the most popular loan apps in Kenya, Tala and iPesa, offer short-term credit to users with minimal requirements.
But which one is the better choice for you?
- Loan Limits and Interest Rates
The Tala loan app offers loan limits ranging from KSh 1,000 to KSh 50,000, while the iPesa loan app provides loans starting from KSh 500 up to KSh 50,000. In terms of interest rates, Tala charges between 0.3% and 0.6% per day, making it more affordable.
On the other hand, iPesa’s annual interest rates range from 36% to 72%, significantly higher than Tala’s.
- Repayment Period and Penalties
The Tala loan app provides borrowers with a repayment window of 1 to 61 days from the date of withdrawal, allowing them to choose a due date within this period that best suits their financial situation. In contrast, iPesa loans have a longer repayment period ranging from 91 to 180 days.
When it comes to late repayments, Tala imposes an 8% penalty on the outstanding balance, while the iPesa loan app enforces a significantly higher penalty of 2% per day on overdue amounts.
Read: 5 Loan Apps in Kenya with Flexible Repayment Plans
- Loan Accessibility and Approval Speed
Both loan apps provide fast approvals, but the Tala loan app processes applications within five minutes, requiring only a national ID. iPesa also approves loans quickly, but it collects additional personal data, including SMS access, which raises privacy concerns.
- CRB Reporting and Credit Score Impact
Tala and iPesa both report repayment behavior to Credit Reference Bureaus (CRBs). With Tala, timely repayments can enhance a borrower’s credit score, and defaulting results in penalties but not immediate CRB blacklisting.
Conversely, iPesa promptly reports defaults, leading to blacklisting, which makes it harder for users to secure future loans.
- Privacy and Data Security
Tala adheres to strict data protection policies, collecting minimal personal information solely for verification and credit assessment. It does not share or sell customer data without consent.
On the other hand, the iPesa loan app collects various personal and financial data for loan assessments, including access to SMS messages.