A loan is money borrowed from a lender—such as a bank, microfinance institution, or Zenka Finance—with an agreement to repay the principal (the borrowed amount) plus interest (the cost of borrowing) over time. In Uganda’s dynamic financial market of 2025, various loan types cater to diverse needs, from education to business growth. Below, we explore the key loan categories available, with a focus on how Zenka’s offerings fit into this landscape.
1. Student Loans
Student loans help students and families cover the cost of higher education, such as tuition, books, and living expenses. These loans, often offered by banks or government programs in Uganda, typically feature:
- Fixed or subsidized interest rates, making repayments affordable.
- Deferred repayment, allowing students to start paying months after graduation.
While Zenka does not currently offer student loans, our personal loans can support smaller education-related expenses, like short courses or exam fees.
2. Mortgages
Mortgages are long-term loans from banks or housing finance companies, enabling you to buy a home without paying the full cost upfront.
Key features include:
- Collateralized by the property, meaning defaulting risks foreclosure.
- Repayment terms spanning 5 to 30 years, spreading costs over time.
Mortgages are ideal for homeownership but require steady income. Zenka’s instalment loans can complement home-related needs, such as renovations or furnishings.
3. Auto Loans
Auto loans finance vehicle purchases, secured by the car itself. Available through banks or dealerships, they include:
- Risk of repossession if payments are missed.
- Higher interest rates from dealerships compared to banks (e.g., 10-20% in 2025).
Zenka’s personal loans offer an alternative for smaller vehicle-related costs, like repairs or down payments, without tying you to the car as collateral.
4. Personal Loans
Personal loans are versatile, unsecured loans for various needs, such as debt consolidation, emergencies, travel, or credit building. Zenka’s personal loans are a standout in Uganda, offering:
- No collateral required, with approval based on income and credit history.
- Loan amounts up to UGX 200,000, with flexible interest rates.
- Fast approval via the Zenka app with funds disbursed to mobile money (e.g., MTN or Airtel Money)
These loans are perfect for flexible, short-term financing without risking assets.
5. Long-Term Loans
Long-term loans, offered by commercial banks, support large-scale goals like business expansion, working capital, or refinancing. They feature:
- Lower interest rates (e.g., 8-15% in 2025) due to larger amounts and extended terms (1-10 years).
- Monthly repayments, requiring consistent cash flow.
Zenka’s instalment loans can serve as a bridge for smaller, immediate business needs while you pursue long-term financing.
6. Secured Loans
Secured loans are backed by collateral, such as property, vehicles, or investments. If you default, the lender can seize the asset. Benefits include:
- Lower interest rates and higher loan amounts due to reduced lender risk.
While Zenka specializes in unsecured loans, understanding secured loans helps you compare options for major purchases.
7. Unsecured Loans
Unsecured loans, like Zenka’s personal and instalment loans, require no collateral. Approval depends on:
- Credit history and income, verified through Uganda’s credit reference bureaus.
- Flexible terms, with Zenka offering 7, 14, or 30-day repayment extensions.
These loans carry slightly higher rates but protect your assets, making them ideal for quick, hassle-free borrowing.
8. Cash Advances
Cash advances provide fast cash from credit card companies or payday lenders, but they come with:
- High interest rates (often 30% or more) and short repayment windows.
- Risk of debt traps if not managed carefully.
Zenka’s instalment loans are a safer, more affordable alternative, with transparent terms and lower rates.
9. Small Business Loans
Small business loans, offered by banks or microfinance institutions, help entrepreneurs start or grow businesses. Requirements include:
- A business plan detailing operations and profitability.
- Collateral, such as personal assets, to secure the loan.
Zenka’s personal loans can support initial business costs, like inventory or marketing, without the need for a formal business plan.
10. Online Instalment Loans
Online instalment loans, like those from Zenka, are small to medium-sized loans repaid in fixed instalments. Features include:
- Quick, digital applications via the Zenka app .
- Flexible repayment schedules, with clear deadlines.
These loans are ideal for urgent needs, with Zenka ensuring fast disbursements and transparent terms.
11. Guarantor Loans
Guarantor loans cater to individuals with limited or poor credit history. Guarantor loans are suited for those with weaker credit histories. A guarantor agrees to repay the loan if the borrower defaults, reducing lender risk. Key aspects include:
- Accessible for those with low credit scores, as the guarantor’s creditworthiness supports the application.
- Higher interest rates due to increased risk.
Zenka’s unsecured loans offer an alternative for those with improving credit, avoiding the need for a guarantor.
