Why can't many people borrow money from banks?

Bad credit card debt, bad debt due to late payment to the bank, red book without a road, no feasible debt repayment plan... These are the reasons why many people, even though their mortgaged assets are 4 times larger than the loan amount, still cannot borrow capital...

Bad debt

While the story of a customer in Hanoi who made a credit card with a debt of 8.5 million VND from Eximbank after 11 years became 8.8 billion VND is "making waves", in Binh Thuan many people are also "half-crying, half-laughing" with bad debt from credit cards leading to not being able to borrow capital from banks. Mr. Tran Luc in Phong Nam, Phan Thiet specializes in trading used cars. He is a highly skilled auto mechanic in the area, so he has a lot of customers. In the past 3 years, the car market has been bustling, many people with new driver's licenses want to buy used cars to practice driving. Understanding the needs of customers, he added used cars to the business. To have more capital for business, he brought his red book to the bank to borrow capital. However, after reviewing the procedures and checking the CIC system (National Credit Information Center, which collects and provides bank credit information), the bank staff found that the couple had bad debt from credit card M. Surprised by the bad debt information, he confirmed to the bank that he had never borrowed from the bank before. The staff told him to ask his wife again, then he was shocked. At first, Ms. V. confirmed that she had also borrowed from the bank, but when the credit card was mentioned, Ms. V. suddenly remembered.

Five years ago, an employee of M. Bank asked for her husband's information and said he would help her make a credit card, so she could withdraw money whenever she needed it. Seeing that it was convenient, she agreed to send her information to the M. Bank employee to make it. However, since then, she has not received the card nor spent a single penny on the card. After investigating, she found out that even though she did not spend any money, every year M. Bank still deducted service fees from the card, leading to the couple having bad debt?!

As for Mr. T., he used a credit card from S. Bank with a limit of 30 million VND. Initially, he still used the finance in the card and paid off the debt normally, but for the past 3 years, because he had abundant resources in his bank account, he did not care about the credit card. Recently, when he borrowed from the bank, he was still notified of bad debt from the credit card of S. Bank. He was so panicked that he had to go to the bank counter to beg to cancel the credit card.

Not only bad debt from "unwilling" credit cards, but currently many businesses and individuals have bad debt in banks, due to many reasons due to the impact of the Covid-19 pandemic. Recently, Mr. Thach Tuan Anh in Ward 1, Xuan An, Phan Thiet City sent a complaint to Binh Thuan Newspaper about Vietinbank Binh Thuan Branch "suddenly" putting him in bad debt, leading to him not being able to borrow from other banks. Content: "According to Notice 5/TB-CNBTN-BL dated January 3, 2024 of VietinBank - Binh Thuan Branch, my principal balance according to the above Credit Contract as of January 3, 2024 is 216,800,000 VND. The scheduled principal and interest payment date is the 25th of each month. If I do not pay on time (including being late for 1 day or more), the entire outstanding loan balance at the bank will automatically be transferred to bad debt (group 5).

In the process of performing my obligations for the loan in the above credit contract, I have seriously and timely paid the interest. Upon receiving the above notice, I have also paid the total principal and interest amount of VND 14,060,466 on January 25, 2024, as required by the bank.

On January 26, 2024, because I needed money for business, I went to other banks to borrow money, but my application was rejected and not accepted by other banks without giving a clear reason. After that, I contacted VietinBank - Binh Thuan Branch to clarify my questions and was told by the credit manager that I had been in bad debt (group 5) since December 2023. "Binh Thuan Newspaper reporter contacted VietinBank - Binh Thuan Branch and is waiting for a satisfactory answer from the bank.

Debt repayment plan

Many people wonder if they have assets of more than 2 billion VND, only borrowed 500 million VND from the bank but still could not get a loan. Mr. Thanh Linh has a house and land on an asphalt road in Lac Tanh town, Tanh Linh district, estimated to be worth nearly 3 billion VND. He is short of money for business, so he went to bank A. to borrow 500 million VND, but after appraisal, the bank did not approve the loan because he did not have a plan to repay the debt. MB Bank also did not approve the loan for the above reason. Recently, Mr. Tran Ngoc M. in Phu Long town, Ham Thuan Bac has 400 square meters of residential land in Ham Hiep commune, mortgaged it to the bank for a loan of 600 million VND but was also rejected because he did not have a plan to repay the debt. When asking this question to a bank employee, he was told: After the real estate "bubble" burst, a series of banks had high bad debts, especially in the real estate mortgage sector. From here, many banks "secretly" tightened the loan, if there was no good plan to repay the debt. The bank explained that if you are a producer, you must have actual projects, income, and must prove what types of seedlings you grow, what goods you produce, income, profit, etc. For a business household, you must have a business license, business duration, tax payment receipts, accounting records of revenue, expenditure, profit, etc.

The Covid-19 pandemic has passed for nearly 2 years, but the negative impact on the production and business activities of enterprises and people in the area is still heavy. Solving the problem of bad debt is a difficult problem for both borrowers and banks, but in reality, many individuals and businesses are currently in a "no choice" situation because of bad debt. And now banks are more strict in reviewing debt repayment plans, so many people, for these reasons, find it difficult to borrow capital from banks...

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