General questions
1. What is a loan?
A loan is money you borrow from a lender that you agree to pay back with interest over time.
2. What types of loans available in Zambia?
Common types include:
- Personal loans
- Auto loans
- Home loans (mortgages)
- Student loans
- Business loans
3. What is interest?
Interest is the cost of borrowing money, usually shown as a percentage of the loan amount.
4. How do I qualify for a loan?
Lenders usually look at your:
- Credit score
- Income
- Employment history
- Debt-to-income ratio
5. What’s a credit score and why does it matter?
A credit score is a number that shows how likely you are to repay debt. The higher your score, the better your loan terms usually are.
6. How much can I borrow?
It depends on the type of loan, your income, your credit history, and the lender’s policies.
7. What’s the difference between a secured and unsecured loan?
- Secured loan: Backed by collateral (like a car or house).
- Unsecured loan: Not backed by collateral—usually based on creditworthiness.
8. What are the typical repayment terms?
Repayment periods vary. Personal loans often range from 1–7 years. Mortgages can go up to 30 years.
9. Can I pay off a loan early?
Yes, but some loans have prepayment penalties, so check the terms.
10. What happens if I miss a payment?
You may be charged a late fee, your credit score can drop, and repeated missed payments could lead to collections or repossession.
Loan Application FAQs
11. What documents do I need to apply for a loan?
Typically:
- Government-issued ID
- Proof of income (pay stubs, tax returns)
- Bank statements
- Credit report (lender pulls this)
12. How long does approval take?
It can range from minutes (for online personal loans) to weeks (for mortgages).
13. Will applying for a loan hurt my credit score?
A hard inquiry during the application can temporarily lower your score. Prequalification usually uses a soft inquiry and doesn’t affect your score.
After You Get the Loan
14. When do I start making payments?
Most loans require your first payment 30 days after the loan is disbursed.
15. Can I refinance my loan later?
Yes. Refinancing can lower your interest rate or extend your term, but it might come with fees or other costs.
Loan Scams & Red Flags
16. How do I avoid loan scams?
Watch for:
- Upfront fees before approval
- Guaranteed approval offers
- Pressure to act quickly
- No credit check claims
Only borrow from licensed, reputable lenders.
17. Are Zamcash, Biu and Zamloan the same company?
Zamloan and Biu are all trading under Biu capital Zambia limited. They differ in loan amounts and repayment period but they are from same company. However, Zamcash is a separate entite away from the earlier two.
18. Does Zamchat offer loans?
No. Zamchat loans is an advisory platform for loans in Zambia facilitating borrowing and lending. The future plan is to make Zamchat loans the best lending institution.
19. What happens when i die before finishing my loan repayment?
It depends on whether the loan i insured or not. Insurance company pays off while if not insured the lender looks for the guarantor to pay of the remaining balance.
20. Why do loans in Zambia have higher interest rates compared to some countries?
The 2 major reasons for high interest rate are:
- High inflation and economic instability,
- High credit risk and limited credit information
