Tala Loan App: How it Works {First Loan Approved}

Tala loan is a type of unsecured personal loan that disburses loans without relying on the borrower’s assets as security. Tala loans are approved based on the borrower’s creditworthiness. Therefore, these types of personal loans are easy, fast, and instant to apply for and get approved for because they do not require any collateral or paperwork.

Tala loans are emergency loans that can be used for personal uses such as home improvement, medical expenses, debt consolidation, and other personal expenses. Tala is an online lender that uses machine learning systems to understand a customer’s financial capacity. The machine learning uses data from the user’s devices to check and calculate the credit limit.

How does a Tala loan work?

Tala loans work by underwriting and disbursing loans to borrowers regardless of their credit history. It means that even if you have a low credit score, you will still get approved for the loan. During the registration process, Tala reviews the borrower’s personal details such as monthly income, residential area, and household. The data collected through the app is used to create a customer profile.

Below is a summary table for the Tala loan features, such as interest rate charged on the loan, loan amount, credit limit, annual percentage rate (APR), loan repayment terms, origination fees and processing fees and charges, loan disbursement method, and speed, the eligibility criteria of the Tala loan, the pay bill number, contact details, loan purpose, and the approval process. All these concepts are important to understand before applying for any personal or unsecured loans.

Feature	Details
Loan Type	Unsecured Personal loan
Loan term	61-Day
Tala sms code	Tala sms code is 21991
Ussd code for tala customers	*846#
Interest Fee Range	0.3%, 0.6% {daily} and 15% {monthly}
Processing Fee Range	None
Loan Amount Range	KSh 500 – KSh 50,000
Limit Increase	Grow to a limit of KSh 30,000 by timely repayments
Example Repayment (KSh 1,000 loan)	Principal: KSh 1,000 Interest Fee: KSh 290 Total Amount Due: KSh 1,290
Max Effective APR	182.5%
Service Fee	0.5%–30.50%
Tala customer service number	For Kenyan Users Call toll-free: 0800720597 Text: 21991 Email: [email protected] For Philippine user call Contact the Tala Hotline:  09778118252, 09778508252, 09778558252, 09190822695, and 09190742930

What is the Tala Loan App, and how does it work?

Tala Loan app is a mobile application that allows users to apply for and receive unsecured personal loans. Users can borrow money, repay, and manage their accounts through the app. The app works by assessing the user’s creditworthiness and disbursing the loan amount directly to their bank account. Tala loan app does not require collateral and monitors repayment progress. Tala app uses machine learning to train its models on user data retention and analyze user information collected during the registration process.

Is the Tala loan legit?

Yes. Tala was licensed as a digital credit provider by the Central Bank of Kenya (CBK) on January 30, 2023, following its press release. Tala Loan, formerly known as Mkopo Rahisi entered the Kenyan market in 2012. Mkopo Rahisi Loan app was then rebranded as Tala and resumed its operation as Tala since 2012 to date.

How can I borrow a Tala loan without the app? Tala loans can be accessed through the app or through the USSD according their terms and condition. Currently Tala does not offer the option to apply for a loan via SMS; instead, use the USSD code #846# if you are unable to access the loan app.

Tala Loan app Download

1. How to download the Tala app via Google Play Store

To download the Tala Loan app, ensure you have enough data or are connected to WiFi. Then follow the steps below:

• Open the Google Play Store on your mobile device.
• In the search bar, type “Tala loan” to find the Tala loan app.
• Download and install the Tala app.

2. How to download the Tala app via Apk

To download and install the app through the APK file, follow the steps below:

• Go to https://tala.co.in/borrow/
• Click the link above to download the Tala APK file into your “Downloads” app.
• Locate the file and tap the file name to launch the installer.
• A pop-up message may request that you allow the device to “install unknown apps” before you can install the APK. Tap “Settings” to be taken there, and/or toggle the switch on to “Allow From This Source.”
• Once enabled, you may need to tap “Back” to return to the installer.
• Tap on “Install” to complete the process. Your app can now be found in your app drawer alongside your other apps.

Tala loan Application

How to Answer Tala Loan Questions

Tala uses your answers to loan application questions to assess your creditworthiness. To increase your chances of approval and a higher loan limit, provide accurate and truthful information.  

1. Be honest and transparent. Avoid providing false or misleading information, as this can negatively impact your credit score.
2. Provide accurate financial details. This includes income, expenses, and repayment history.
3. Be specific: If asked about your occupation or income source, provide clear and detailed information.
4. Understand the questions: Ensure you understand the questions before answering. If unsure, seek clarification.

By following these guidelines, you can increase your chances of a successful Tala loan application.

Remember: Tala uses advanced algorithms to assess creditworthiness, so providing accurate information is crucial.

How to Apply for Tala Loan via Mpesa

To borrow money from Tala, one should have an Android phone with an M-pesa line, and an Android smartphone should have a good internet connection. Once the app is downloaded and installed from the Google Play Store, follow through with the registration process, which takes around 5 to 10 minutes.

Before requesting a loan, one should register an account first. Below is a simple process to open an account with Tala and start borrowing. To apply for a Tala loan via M-Pesa, follow the steps below:

• Open the Tala App
• Sign in to register with Tala.
• Enter valid national ID details.
• Sign up to complete the registration. Enter the details accurately, and a one-time PIN will be sent to you, which you need to change to your own unique PIN.
• Proceed with the application process by answering a few questions.
• Choose a repayment date that works for you.
• Receive your money straight to your MPESA

How to apply for tala loan without a smartphone

To apply for a tala loan without a smartphone, Open your phone app>>Dial *846#>>Select “Request loan” >>Enter loan amount>>Select the loan limit>>Wait for a message

How to borrow Tala loan using USSD

Borrowing money from Tala using a USSD (Unstructured Supplementary Service Data) involves dialing codes made up of the characters that are available on a mobile phone. The USSD (Unstructured Supplementary Service Data) for Tala is #846#. To apply for or borrow a Tala loan using a USSD code, follow the prompts below:

• Open your phone app
• Dial *846#
• Select “REQUEST LOAN.”
• Enter loan amount based on your limit
• Enter your Mobile money Pin
• Wait for a message

How to cancel Tala Loan Application

A loan cancellation involves stopping the loan application process. A customer does not have to cancel a loan application under the following circumstances:

• If the borrower has not completed and submitted the application,
• If the borrower has already applied but has not yet cashed out,
• If the borrower accepts Tala’s offer but has not yet cashed out,

To cancel a Tala loan application, one should do nothing and after 7 days, the loan cancelation will have been processed automatically.

How do I check Tala loan application status?

To check Tala application status, just follow these steps:

1. Log in to the Tala app.
2. Go to the top part of your home screen and you will see the status of your application.

What is “There is a problem sending your loan”?

“There is a problem sending your loan” is a common error message on the Tala app. This usually indicates that your loan application is undergoing additional review after initial approval. The system is likely conducting further checks to ensure the loan is disbursed correctly. While this might cause a delay, it’s a standard procedure to prevent errors.

To address this issue, patience is key. Avoid making multiple loan requests, as this could negatively impact your application. If the problem persists after a reasonable waiting period, it’s advisable to contact Tala’s customer support for further assistance. They can provide specific information about the delay and guide you through the process.

Tala loan Fees, Charges, and Interest rates

What is the interest rate for Tala loans?

The interest rate for Tala loans is between 0.3% and 0.6%*, plus 20% excise tax on your daily interest. The main disadvantage of unsecured personal loans is that the interest rates are higher with short-term repayment dates. The interest rate is the amount a lender charges a borrower and is a percentage of the principal—the amount loaned.

What fees does a borrower incur when processing a loan with Tala?

When applying for a personal loan with a lender, fees and charges should be determined and analyzed. The fees that a borrower might incur during a loan process include the following: Processing fees, prepayment charges, late payment penalties, documentation charges, insurance charges, loan cancellation charges, Underwriting fees, origination fees, Service fees, and tax-related fees on the personal loan disbursed. When processing a Tala loan, the following fees will be charged:

Processing fees	There are no loan processing fees charged
Prepayment charges	No prepayment fees
Underwriting fee	No Underwriting fees
late payment Fees	Tala charges a one-time late payment interest fee of 8%
loan cancellation charges	No loan cancellation fee
origination fees	No origination
Service fees	0.5%–30.50%

How much is the service fee for tala loans?

Tala charges a one-time fee per loan. This fee is calculated as a percentage of the principal and is priced dynamically for each customer. 78% of customers start at 15% and are eligible for fees as low as 5% as they build their credit history with Tala. The fee does not roll over or compound

The following is an example of fees calculated for a loan amount of KSh 4000. If a borrower receives KSh 4,000 and repays after 60 days, he/she would owe interest of 18%* (or KSh 720) and excise tax of 20% of interest (or KSh 144), which is a total payment of KSh 4,864   Breakdown:  KSh 4,000 (borrowed amount) + KSh 720 (interest) + KSh 144 (excise tax) = KSh 4,864 (total payment).

Tala loan includes a service fee, which is a fixed fee based on the original amount of the loan. Other loans have a cost, sometimes called an access or maintenance fee. These fees can be charged daily, monthly, or yearly. 

This type of fee can add up quickly, becoming extremely expensive. When taking a loan with growing fees, it’s important to pay back the loan immediately because the longer you wait, the more you’ll pay. Let’s look at an example of both types of loans.

Tristram takes out two loans for 5,000 KSh. Loan A has a one-time service fee of 5% for 30 days. His service fee would be 250 ksh. He would owe 5,250 KSh in total. Loan B has a one-time service fee of 1%, plus a daily fee of 30 KSh. It takes Richard 30 days to repay Loan B. On the first day of his loan, Tristram would owe: 

1% of 5,000 KSh = 50 KSh

• A daily fee of 30 KSh 

= 80 KSh in fees for that day. He would owe 5,080 Ksh total 

On the second day of his loan, Tristram would owe another 30 KSh, making his total 5,110 KSh. If Tristram waits 30 days to repay his loan, he would owe 950 KSh in fees, making his total repayment 5,950 KSh. It would be like his interest rate was 19%. Even though it looks like Loan B is cheaper at the beginning, look at what the long-term fees will be. Remember to review your exact loan or overdraft terms to understand exactly how much you owe and when. Keep an eye out for hidden fees — you don’t want to be surprised! Remember that there might be a transaction fee to transfer money as well. Take that into account.

Tala loan Eligibility Criteria

Eligibility criteria refer to a set of predefined standards or requirements that a borrower must meet to be considered for a particular loan. These criteria are used to determine who is qualified or suitable to get approved for the loan. For Tala loan offers, the eligibility criteria can vary widely depending on the context and can include factors such as age, income, and credit score.

What are the requirements to apply for a Tala loan?

Borrowers applying for Tala loans for the first time must check the prequalification and ensure they provide the right details. If you are applying for the loan, the following are the requirements for Tala loans:

For users in Kenya, the following are the requirements-

• One must have a smartphone—that should be an Android smartphone. The Tala loan app is not currently available to IOS users.
• One must have a Valid National ID
• Have a valid phone number with an activated M-pesa account

For users in Philippines, the following are the requirements:

• The borrower must have an active Tala wallet
• The borrower must cash in the Tala wallet in 30 days before applying for a new loan. There is no minimum amount required.
• The borrower must keep the funds in the Tala wallet for at least 24 hours.
• The borrower must repay Tala loans on time to continue to qualify for the exclusive credit benefits.

How much is a first loan at Tala?

The first-time loan at Tala varies depending on the creditworthiness of the borrower. This means that first-time applicants may not be eligible for higher loan limits or none, because of their poor credit scores. However, borrowers with low creditworthiness may be eligible for lower credit limits in the range of Kes 1000 to Kes 2000 as first-time loans. This loan range applies to users from Kenya. For Philippine users, the first-time loan from Tala starts at ₱200 and grows up to ₱25,000, which is the highest loan limit for the Philippine users.

Why a borrower is not eligible for a Tala loan? The main reason a borrower is not eligible to get a Tala loan is that the system is unable to assign a credit limit, mainly because of two reasons. The first reason is poor or low creditworthiness and secondly, because you may have provided incomplete and incorrect information during the application process. I recommend you reapply in the next 7 days if you are denied the loan for the first time.

Why is Tala not giving me a loan? Tala is not giving you a loan because the system in place failed to assign a credit limit. This is because you are not eligible for the loan.

How do I qualify for Tala loans? For you to qualify for Tala loans and have them approved, you should provide correct information about yourself, For example, you should allow the app to access your messages so that the system can automatically check your creditworthiness and assign your credit limit. To allow the app to access your messages, go to Settings, click on apps and permissions, and Then Allow all permissions for the app.

Tala Loan Repayment Methods

Loan repayment refers to the act of paying back money borrowed from a lender according to the terms agreed upon in a loan contract. This process involves a series of regular payments, often monthly, that cover both the principal amount (the original sum borrowed) and interest (the cost of borrowing the money). Loan repayment methods refer to the various strategies and schedules borrowers use to repay their tala loans. Below is a list of ways to pay your Tala loan balance:

1. How to pay tala loan via M-pesa

• Go to your Safaricom menu and select M-Pesa
• Select Lipa na M-Pesa
• Select the Pay Bill option
• Enter the business number, 851900
• Enter your Tala registered phone number as the account number
• Enter your payment amount
• Enter your M-Pesa PIN
• Confirm that all details are correct and press ‘OK.‘

2. How do I repay Tala loan from the app?

• Step 1: Log in to your Tala app.
• Step 2: Tap “Make a payment” on the top part of your home screen.
• Step 3: Enter the amount you want to pay.
• Step 4: Select your preferred payment channel.
• Step 5: View the payment instructions and remember to:
• Note down your reference number
• Check the validity period of your reference number
• Follow the next steps written here to process your payment
• Step 6: Once your payment is successful, you will receive a notification and your updated balance will be reflected in your Tala app. 

How do I pay a tala loan in Gcash? To pay tala loans using Gcash there are two methods to use. Below are the two methods

1. On your Tala app:

• Step 1: Tap “Make a payment” in the Tala app and enter the amount you want to repay.
• Step 2: Select GCash as your repayment channel and view the payment instructions which include your reference number.

2. On your GCash app:

• Step 3: Login and tap Pay Bills > Loans > Tala
• Step 4: Enter the requested information, confirm payment, then wait for a success message from GCash and check your Tala app for your updated balance.

Can I loan immediately after paying Tala? Yes, You can instantly request another loan on the Tala App after you finish paying an outstanding loan.

How do I check my Tala loan balance? To check your Tala loan balance, dial *846# and select loan balance and you will receive a short confirmation message about your loan balance.

How to Increase Tala Loan Limit

Loan limit increase refers to an adjustment in the maximum amount of money that a lender is willing to lend to a borrower. To increase the tala loan, the following steps should considered:

• Maintain a Positive Credit Score
• Regular borrowing from Tala
• Timely loan repayments
• Keep Your Account Active
• Refer friends to Tala
• Request a Higher Limit
• Increase Mpesa transactions and retain messages
• Avoid Changing or Upgrading Your Phone
• Maintain a Stable Income
• Exercise Patience

Consequences for Defaulting on Tala loans

Loan default occurs when a borrower fails to meet the legal obligations or conditions of a loan agreement. This typically means that the borrower has not made the required payments on time or has stopped making payments altogether. The following will happen if you fail to pay your tala loan balance:

You may be contacted by collections agents if you do not repay your loan on time. In the event of a long period of non-payment, you may be blacklisted from Tala and also reported to the relevant credit reference bureaus. Missing loan payments may result in late payment interest, lower loan limits, or the inability to get a subsequent loan from Tala as well as other lenders.

How much interest does Tala Charge for late payments?

Borrowers who are late or wish to extend their loan beyond the original due date will be charged a one-time 8% extension fee.

Tala loan History and the owner

Shivani Siroya is the founder and chief executive officer of Tala, a smartphone lending app. Shivani Siroya founded the app in 2011 to offer instant credit scores to people in underrepresented markets such as Kenya, Mexico, India, and the Philippines. Tala Loan is a licensed loan app operating under the terms and conditions of the Central Bank of Kenya. Tala was introduced in the Kenyan market as Mkopo rahisi according the reports we have collected from Standard media group. Mkopo Rahisi was then rebranded as Tala by Inventure Mobile Limited. Inventure Mobile Limited is a licensed digital lender, according to the reports we collected from the Central Bank of Kenya. Inventure Mobile Limited was incorporated under Companies Registrar Act in 2012 and disbursed loan amount of Ksh. 10,000 as Mkopo rahisi.

Is Tala still giving loans? Yes, Tala is still providing loans.