According to Clause 1, Article 9 of Circular 43/2016/TT-NHNN regulating consumer loans of finance companies, consumer loan interest rates of finance companies are implemented according to the regulations of the State Bank (SBV) on lending activities of credit institutions (CIs) and foreign bank branches to customers.
Customers' capital needs must be used for consumption purposes such as: Buying means of transport, household appliances and equipment; Costs of studying, medical examination and treatment, travel, culture, physical education and sports ; Costs of home repair.
According to the provisions of Circular 39/2016/TT-NHNN, it can be understood that the consumer loan interest rate will be agreed upon by the finance company and the customer according to the supply and demand of capital in the market, the demand for loans and the creditworthiness of the customer if the customer does not fall into the cases specified in Clause 2, Article 13 of the above regulations.
In case the customer falls under Clause 2 of the above article, there is a regulation on the ceiling interest rate not exceeding the maximum lending interest rate decided by the Governor of the State Bank of Vietnam in each period.
Specifically, according to Article 13 of Circular 39/2016/TT-NHNN, lending interest rates are regulated as follows:
- Credit institutions and customers agree on loan interest rates based on market supply and demand, loan demand and customer creditworthiness, except in cases where the State Bank of Vietnam has regulations on maximum loan interest rates in Clause 2 of this Article.
- Credit institutions and customers agree on short-term lending interest rates in Vietnamese Dong but not exceeding the maximum lending interest rate decided by the Governor of the State Bank of Vietnam in each period to meet certain capital needs:
+ Serving the field of agricultural and rural development according to Government regulations on credit policies serving agricultural and rural development;
+ Implement export business plans according to the provisions of the Commercial Law and documents guiding the Commercial Law;
+ Serving small and medium-sized enterprises' business according to Government regulations on supporting the development of small and medium-sized enterprises;
+ Develop supporting industries according to Government regulations on supporting industry development;
+ Serving the business of high-tech enterprises according to the provisions of the Law on High Technology and documents guiding the Law on High Technology.
- The content of the loan interest rate agreement includes the loan interest rate and the method of calculating interest for the loan. In case the loan interest rate is not converted to a %/year rate and/or the method of calculating interest based on the actual loan balance and the period of maintaining that actual principal balance is not applied, the loan agreement must include the content of the interest rate converted to a %/year rate (a year is three hundred and sixty-five days) calculated based on the actual loan balance and the period of maintaining that actual loan balance.
- When the payment deadline comes and the customer does not pay or does not fully pay the principal and/or interest of the loan as agreed, the customer must pay the loan interest as follows:
+ Interest on the principal according to the agreed loan interest rate corresponding to the loan term that has not been paid by the due date;
+ In case the customer fails to pay the interest on time as prescribed in Point a of this Clause, he/she must pay late interest at the interest rate agreed upon by the credit institution and the customer but not exceeding 10%/year calculated on the outstanding late interest corresponding to the late payment period;
+ In case the loan is transferred to overdue debt, the customer must pay interest on the overdue principal balance corresponding to the late payment period, the applicable interest rate shall not exceed 150% of the loan interest rate at the time of transfer to overdue debt.
- In case of applying adjustable lending interest rate, the credit institution and the customer must agree on the principles and factors to determine the adjusted interest rate and the time of adjusting the lending interest rate. In case the factors to determine the adjusted interest rate lead to different lending interest rates, the credit institution shall apply the lowest lending interest rate.
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