Kenya Civil Servants Car Loan Calculation

It is time to drive to work. It is time to acquire a luxurious motor vehicle. It is time to buy that pick-up.

Let us work on some numbers based on what you are entitled to. 

Before we go into the civil servants car loan calculation and application procedure, we wish to inform you that the car loans will be available by February 2015.

 [Read: Civil servants car loan per job group]

We are going to take into account the following two factors;
  1. The 3% interest rate per annum on a reducing balance.
  2.  The maximum repayment period of five years.

Car loan repayment calculation
At the end of this you will see that the civil servants car loan is cheap. We have calculated the total amount to be repaid for different amounts of car loans borrowed.

We took into consideration that civil servants in different job groups are entitled to a given loan maxima. So what we have done is that we have computed the amounts to be repaid for a wide range of loan amounts. No civil servant has been left out.

We have tabulated the results of all the necessary details that you need. 

Car loan           Total Interest          Total payable
600,000                    55,064             655,064         
800,000                    73,418             873,418
1,000,000                 91,773             1,091,773
1,500,000                 137,659           1,637,659
2,000,000                 183,546           2,183,546
2,500,000                 229,432           2,729,432
3,000,000                 275,319           3,275,319
3,500,000                321,205           3,821,205
4,000,000                 367,091           4,367,091


How to interpret the table above?
Let’s take the first row. Now, if you borrow a car loan of KShs. 600,000 the total amount to be paid over the five year period is KShs. 655,064.

The total amount that will be paid after five years is given by;

Total payable amount = principle + total interest

So how much interest did the loan accrue?

The total interest over the five years period is KShs. 55,064 for the loan amount of KShs. 600,000.

Remember that the interest we have indicated is the total interest; a sum of interests for each individual year within the five year period.

The graph below shows how the interest amount decreases throughout the five years period. 


Fig: A chart showing how the civil servants car loan 
decreases over time. The interest amounts shown are
 for a loan of KShs. 550,000.

How much will I repay each year?
The amount to be paid each year (also called the Equal Annual Instalment [EAI]) is KShs. 131,013 for a car loan of KShs 600,000. You will pay this amount annually for five years only.

Below is a table showing the amount of money to be paid per year for different amounts of car loans in Kenya Shillings.

Car Loan          Annual Repayment (EAI)
200,000                    43,671             
250,000                    54,589
300,000                    65,506
350,000                    76,424
400,000                    87,342
450,000                    98,260
500,000                    109,177
550,000                    120,095
600,000                    131,012.80
700,000                    152,848
800,000                    174,683.60
1,000,000                 218,354.60
1,500,000                 327,531.80
2,000,000                 436,709.20
2,500,000                 545,886.40
3,000,000                 655,063.80
3,500,000                 764,241.00
4,000,000                 873,418.20 

Summary

Labels: