If you are a Kenyan who had the fortune of doing well in KCSE and going to college, you may have applied for the HELB and of course, had the good luck of getting your loan approved. 

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You worked so hard in college and did not engage in any of the unnecessary debaucheries that plague college students.

Thereafter, you graduated with a second class Upper Division degree. You were overjoyed; finally, the world was yours to conquer until the Higher Education Loans Board (HELB) comes calling; It's time to pay up! 

They want their money plus interest back. Here are three tips to help you pay off HELB quickly, and avoid getting listed with the CRB:

1. Know your balance

You cannot repay what you do not know. Start off by logging into your HELB portal and find out how much you owe the agency. Do not assume that just because they've been giving you 50,000 per year for five years, you now owe them Sh250,000. There may be interest, penalties, and fees charged on that amount. 

2. Understand interest, penalties and fees charged

HELB charges interest on the principal amount paid to you at 4% per annum. Regardless of whether or not you’re paying your loan, this continues to accrue. HELB charges Sh5,000 penalty for every month you default. Now, imagine how that looks like if you haven't been paying the loan for 10 years i.e 10 years x 12 months x 5000 = 600,000. 

Don't forget interest is also charged on this. You end up having a balance that is way higher than what you actually borrowed. HELB also charges Sh1,000 ledger fee per year. This is an administrative charge. The longer you take to pay off the loan, the more you pay.

3. Understand how compound interest works

If you can remember your primary school maths lesson, you learnt about simple interest and compound interest. 

HELB works out your loan balance using compound interest formula. Thus, if you owe Sh100,000 in the first year, they charge you Sh4,000 as interest. If you default on your repayments, you will pay 4% interest on Sh104,000 in the second year. You are now paying interest on interest not to mention the ledger fees, and penalties that will accrue. 

The good thing is if you keep up on your payments, you will pay interest on reducing the balance. Thus, if your loan was 100,000 but you paid half of it. Interest is charged on the Sh 50,000 remaining. 

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