What’s a Title Deed Loan?
A title deed loan is a secured loan where you use a title deed as collateral. The bank holds the title deed until you repay in full. For a lot of people, this is the most practical way to buy land when you can’t pay everything upfront.
Who Qualifies?
Most banks will need:
- National ID
- Recent payslips (or bank statements and tax returns if you’re self-employed)
- The title deed for the property you’re buying
- A decent credit history
The Process
Step 1: Shop around. Compare interest rates, loan amounts, repayment periods, and fees across different banks. KCB, Equity, Cooperative Bank, NCBA, and Stanbic all offer title deed loans. Don’t go to credit agencies. They charge 2 to 3% per month, which is 24 to 36% per year. Banks are typically 13 to 18%.
Step 2: Apply. Fill out the application, provide your documents (ID, KRA PIN, bank statements, payslips, title deed copy, valuation report). Make sure everything is complete and accurate. Incomplete applications are the main cause of delays.
Step 3: Wait. The bank reviews everything, runs a credit check, and if approved, sends you an offer letter with the terms. You sign it, the bank registers a charge against the title deed (meaning they hold it as security), and then they disburse the money. The whole thing can take up to 90 days depending on the bank.
A Real Example
One of our customers, Mike, got 100% financing from KCB to buy a plot in Suncity, Kikuyu. His terms:
- Interest rate: 13% (CBR rate of 9% plus bank margin of 4%)
- Negotiation fees: 2.5% of loan amount
- Excise duty: 20% of negotiation fees
Mike now owns a 50 by 100 plot and is planning to build. The total loan cost was significantly less than years of rent payments, and he’s building equity in his own property.
Tips
- Shop around. Rates and terms vary a lot between banks.
- Negotiate. Banks will often reduce their margin or waive fees, especially for existing customers.
- Stay away from credit agencies. 2 to 3% monthly interest sounds small but it adds up fast.
- Keep your credit clean. Pay existing debts on time and avoid CRB listing.
- Have a deposit if you can. Even though 100% financing exists, 10 to 20% down gives you better terms.
For the full land buying process: how to buy land in Kenya. For understanding title deeds: title deeds in Kenya.
