Loan default consequences: What happens if you do not pay your mobile loan?

Mobile and bank Loan default consequences in kenya, CRB

Borrowing a mobile loan in Kenya and failing to repay in time has its own consequences. Learn about loan default consequences in Kenya and what as a defaulter you can do to avoid further punishments from CRB agencies.

Mobile and bank Loan default consequences in kenya, CRB
what happens when you default, don’t pay your loan in time (Kenya consequences)/Photo

What does Mobile Loan Default mean

When you borrow money from any mobile money lending platform, SACCO, HELB e.tc, you enter into an agreement whereby you promise to repay the loan after a certain period of time. Failing to repay on time, missing to pay or avoiding to pay means you have defaulted.
While some people usually default on loans willingly, there are several genuine reasons as to why you might default on your loan for example, you may have lost your simcard, you may have forgotten that you owe money or even you don’t have the money to repay the loan.

What happens if I don’t pay my mobile loan in Kenya?

If you have been struggling to pay your mobile loan, here are three possible things that will happen:

Extra charges (interest)

The mobile money lending platform that you are using may decide to charge you some additional fees and interest.

Get reported to the Credit Referencing Board (CRB blacklist)

The lender may also decide to report you to the Credit Reference Board (CRB) once listed as a defaulter by the CRB, you will be barred from borrowing money from any money lending platform between a period of not less than five years and not exceeding seven years after which debt that you owe will be considered as having expired. You may also choose to repay your loan and clear your name from the CRB blacklist.
Check out this article on how to check your CRB status in Kenya..

Drop in credit score

Defaulting on your mobile loan may also affect your personal credit score by lowering it. A low credit score will mean that you will only qualify for low loan amounts henceforth.

How to avoid loan default consequences

To avoid defaulting on mobile loans, the following practices are advisable.

  • Borrow only what you can afford to pay back
  • Always have a repayment plan before borrowing
  • Always read the terms and conditions of mobile money lenders

PS. Central Bank of Kenya (CBK) regulates all CRB agencies in Kenya.

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Otieno Victor

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14 responses

  1. Elizabeth Avatar
    Elizabeth

    I was listed in crb , but I paid all the loans , I need to know if I was removed from crb after the president said no clearance fee

    Reply
  2. Erick kipsang Avatar
    Erick kipsang

    Repay on time

    Reply
  3. Lok's Avatar
    Lok’s

    How do I know who sent my number to be blacklisted?

    Reply
  4. steve kerush Avatar
    steve kerush

    can one be arrested for defaulting on a mobile loan eg talk and also are the recovery agents allowed to track you and take legal action against u

    Reply
  5. Pauline njeri ng'aari Avatar
    Pauline njeri ng’aari

    While at crb,will the interest still count,

    Reply
  6. Pauline njeri ng'aari Avatar
    Pauline njeri ng’aari

    I owe tala a loan n git a message today if I don’t pay they will reportedly me to CRB.Am out of kenya and tala not working here.what do i do.if am reported to crb will it count interest anymore til I come back and repay my loan?

    Reply
  7. Dickson Avatar
    Dickson

    How long does it take to be listed in the CRB after defaulting a mobile loan like say TALA

    Reply
  8. Newton Manjala Avatar
    Newton Manjala

    Am afraid I will be listed in CRB, am making partial payment but lender which is Okash is multiplying the the interest each day, Ksh loan of 1720 I recieved I have to pay 3000, I have given up, they have insisted they will list me in CRB and doubling the amount, idont have cash to clear it but making partial payments

    Reply
  9. Nelson Avatar
    Nelson

    while negatively listed with CRB,does the loan interest continue to count affecting the principal borrowed ?

    Reply
    1. Elvis Nyakang'i Avatar
      Elvis Nyakang’i

      Hello,
      It depends on which type of loan you took. For for most companies, the principal is not affected.
      Regards

      Reply
  10. Milton Shitseswa Avatar
    Milton Shitseswa

    I was listed. I payed back the loan short after i had been listed. i got clearance certificate but i wonder why I am still listed even after paying back the money with fine and paying for clearance!!!
    Please advice

    Reply
    1. Elvis Nyakang'i Avatar
      Elvis Nyakang’i

      Hello Milton,
      Have you contacted the company that gave you the loan. They might be in a position to help. Just inform them that you made your repayment and got cleared.
      Regards

      Reply
    2. Erick Otieno Amatta Avatar
      Erick Otieno Amatta

      Once listed in CRB the government demands that you be listed for 60months or 5 years. So paying for a clearance certificate will not get your name out of the CRB list. One should wait for at least 5 years for there CRB status to change from Default.

      Reply
    3. Josh Avatar
      Josh

      You did not pay the loan listed !! Incqire from crb to know first who listed you

      Reply

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