Absa, Bank of Africa offer lowest interest rates for household loans

Households seeking credit from commercial banks in Ghana by the end of September 2024 found the lowest interest rates at Bank of Africa and Absa Bank, according to the latest Annualised Percentage Rates (APR) report published by the Bank of Ghana.

For individuals and households looking to take out loans with a one-year repayment term, Bank of Africa provided the most favourable rates.

While the bank advertised an interest rate of 29.31%, Bank of Ghana data revealed that actual rates offered by the bank dropped as low as 16%.

When all additional charges such as commitment, processing, insurance, and facility fees were factored in, the bank’s average rate stood at 24.18%.

For long-term loans over five years, Absa Bank emerged as the best option, with an average interest rate of 24.81%.

This rate included similar charges for commitment, processing, insurance, and facility fees.

Despite advertising a rate of 29.31%, Absa Bank’s actual charge was 28.72%, making it a competitive option for those seeking longer-term credit.

The APR reflects the true cost of borrowing, including all fees that borrowers may not initially be aware of.

The Bank of Ghana has been regularly publishing these rates, arguing that greater transparency in the lending market will help reduce the cost of credit in the country.

Source:classfmonline.com