What is Loan Rescheduling?
Rescheduling is an adjustment to the timing of loan repayments: extending the term, changing the instalment, or agreeing a temporary pause. The principal outstanding does not reduce, and extending the schedule generally increases the total interest paid over the life of the loan.
A real Kenyan example
A member facing a temporary drop in income agrees a longer schedule with smaller instalments rather than defaulting, accepting more total interest in exchange for affordable monthly payments.
Why it matters
Rescheduling solves a cash-flow problem and does not solve a debt problem. Members who reschedule repeatedly without the underlying income changing generally end up paying substantially more for the same borrowing.
FAQs
Does rescheduling reduce what I owe?
No. It changes when you pay, not how much principal is outstanding, and extending the schedule usually increases total interest. Ask for the new total repayable before agreeing.
Can I reschedule a SACCO loan more than once?
That is at the SACCO's discretion and subject to its own policies and its regulatory obligations. Repeated rescheduling is generally a signal that the underlying affordability problem has not been solved.
What happens to my guarantors if I reschedule?
Their commitment generally continues for the extended period, which is a real consequence for them. Tell them, and check with the SACCO whether their consent is required.