Ms. Thanh Thao (District 10, Ho Chi Minh City) expressed her frustration, saying: "I've received almost no support for my bank loan over the past five years, even during the peak of the Covid-19 lockdown. I've paid my installments on time every month, yet the bank still charges high interest rates, regardless of whether I'm a loyal customer or not."
Five years ago, Ms. Thanh Thao borrowed 5 billion VND from the bank. She has repaid nearly half of it, but her monthly payments to the bank have hardly decreased, at almost 50 million VND per month, including both principal and interest. The reason is that in the first year of the loan, the interest rate charged Ms. Thanh Thao was 8% per year, but after the preferential period, the interest rate continuously increased. At its peak in March 2023, the bank charged interest on the remaining amount at 13.1% per year, causing Ms. Thanh Thao considerable frustration.
Therefore, upon receiving the information that customers would soon be allowed to transfer their loans to another bank if they could negotiate a lower interest rate, Ms. Thanh Thao happily stated: "This way, customers who repay their loans on time, like me, will have the opportunity to negotiate the old interest rate. We won't be taken advantage of by the bank during the loan period."
Banks are permitted to lend money to individuals to repay loans at other credit institutions.
This is stipulated in Circular 06/2023, amending and supplementing several articles of Circular 39/2016 (Circular 39) regulating lending activities of credit institutions to customers of the State Bank of Vietnam. Circular 06 adds a provision allowing credit institutions to consider and decide on granting loans to customers to repay loans at other credit institutions for the purpose of living expenses. Under the current Circular 39/2016, customers are only allowed to borrow to repay loans at other credit institutions for business production purposes; this does not apply to loans for living expenses.
Expanding the regulations allowing customers to repay loans at other credit institutions, applicable to both business loans and loans for living expenses, will facilitate customers' access to more bank credit, giving them more opportunities to choose better services and amenities at other credit institutions (if available).
For example, if a customer has outstanding home loan debt at bank A, while bank B offers a lower interest rate for the same home loan and additional benefits, this regulation allows the customer to approach bank B to request a loan to repay the loan at bank A early. This enables the customer to easily access a new loan at a lower cost and utilize additional services. Circular 06 will take effect from September 1, 2023.
Furthermore, the State Bank of Vietnam also stated that for loans serving essential living expenses and household consumption purposes such as car loans or consumer equipment purchases, customers do not need to provide a plan or project. Accordingly, customers only need to provide information about the total amount of capital needed, the purpose of the capital, the loan term, and their repayment source, without having to develop a specific plan or project to meet their living needs.
For loans intended for living expenses such as purchasing, constructing, or renovating housing, or acquiring land use rights to build houses, which are often substantial in value, new customers must supplement their loan application with a plan or project proposal to ensure that the credit institution has complete information about the customer's loan purpose and to monitor the customer's use of the loan funds for the intended purpose.
Source link
Comment (0)