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Process of applying for a bank loan in Vietnam

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Legal grounds

  • Decree 31/2022/ND-CP

What is a loan?

Loan is the amount of money that an individual or a business borrows from other sources to use on the condition that it will be repaid according to the time and requirements set by the lender.

You want a better means of transportation but do not have enough money, the monthly amount to pay for living expenses such as electricity, water, food, children…the rest to accumulate not much.

You want to have a house of your own, instead of having to stay for a long time, but the value of the house is too great.

What is a bank loan?

A general term used to refer to bank loans, which is the amount of money that individuals or businesses borrow from the Bank.

Loan amount is the total amount borrowed by individuals or businesses.

Types of bank loans today

Unsecured loan: is a form of loan without collateral, based entirely on the creditworthiness of the borrower. This form of loan is suitable for individuals with small needs such as shopping, entertainment, etc. The interest rate is quite high, the maximum loan period is 60 months.

Overdraft loan: is a form of loan for individual customers when the need to use exceeds the amount currently available in the individual’s current account. The limit granted is only 5 times the salary. The document requires attestation of a fixed monthly income.

Installment loan: is a form of loan where the interest and principal each month are equal. Depending on the needs and repayment capacity of each customer, there are different repayment terms and limits.

Mortgage loan: is a traditional form of bank loan, in this form of loan, you must have collateral to get a loan. The loan limit is quite high up to 80% of the value of the pledged property. The interest rate is suitable for the loan. The loan term is extended up to 25 years according to the borrower’s needs. This loan is suitable for both individuals and businesses. An important note when taking out a mortgage is the accompanying fees such as late fees or prepayment fees.

Who is eligible for the support policy?

Pursuant to Clause 2, Article 2 of Decree 31/2022/ND-CP, the subjects eligible for interest rate support are enterprises, cooperatives and business households with the purpose of borrowing capital into two groups:

+ Aviation, transportation and warehousing industries; tourism, accommodation and catering services; educations; agriculture – forestry – fishery; manufacturing and processing industry; software publishing, computer programming and related activities, information service activities; including construction activities directly serving these economic sectors, except construction activities for real estate business purposes.

+ Implement projects to build social housing, housing for workers, renovate old apartment buildings on the list of projects compiled and announced by the Ministry of Construction.

Conditions for bank loan

Conditions on borrowers

Subjects eligible for bank loans:

+ Individuals with Vietnamese nationality or foreign nationality.

+ Individuals from 18 years old.

+ Have valid ID card/Citizen identification card/Passport

The purpose of borrowing money from a bank is to serve a legitimate purpose.

Subjects not supported by banks for loans:

+ Member of Board of Directors, Supervisory Board, General Director (Director), Deputy General Director (Deputy Director) of the bank.

Persons who wish to use loan capital to carry out business investment activities in industries and trades prohibited by law.

+ For customers with bad debts from banks or low credit scores, banks can completely refuse to lend.

Income conditions

For those who want to get a bank loan, they need to prove that they have a stable income. Proof of the employment contract (valid) with the original salary statement for the last 3-6 months.

Procedures and conditions for bank loans

To solve the financial problem, many individuals have chosen to use the bank’s capital. However, because they do not know the procedures and conditions for a bank loan, many people have difficulty accessing capital, and the loan application does not meet the requirements, so it is not approved.

Therefore, before applying for a bank loan, individual customers need to understand the general conditions to be more prepared, and the procedure is therefore faster.

When meeting the above conditions, the bank will consider your income level with the amount you plan to borrow to see if you are eligible to pay or not. However, besides these conditions, different banks will add other requirements depending on their policies.

Conditions of collateral

If you have a need for a bank loan, you need to have collateral to fulfill your human resource obligations when taking a loan at a bank. The collaterals can be objects, valuable papers or property rights. You can understand simply that collateral can be diamonds, gold, silver, gems, house ownership or bonds, stocks…

Process of applying for a bank loan in Vietnam

Currently, most of the lending process at banks has the following general steps, specifically as follows:

Step 1: Prepare documents

Usually, the bank staff will ask questions to customers around: the purpose of the loan, how much money to borrow, how long the loan is, how the collateral is (if a mortgage), How much is the average monthly income, is the source of income stable, the main sources of income, other external sources of income…

After the survey, the bank staff will review each loan and guide the customer to complete the application to ensure the loan conditions for that bank.

Step 2: Receive application and loan appraisal

After receiving the loan application from the customer, the bank will confirm the information and re-evaluate the application. Each bank will have its own appraisal regulation with the aim of limiting risks and increasing loan repayment ability.

If the customer provides all the required documents, the bank will appraise it faster, the higher the chance of loan approval.

Step 3: Loan approval

After assessing the loan application, the staff makes credit proposals and submits them to the competent authorities for loan approval. After that, the bank staff will send a notice to the customer about the approved loan.

Step 4: Disbursement

If the application is approved, the customer signs the contract and the bank will disburse (provide the amount that the customer is loaned according to the contract). Customers can receive directly by cash or bank transfer.

Bank loan procedures are usually done and completed in 1-3 days. However, for complex loans, this period can be as long as 1 week

Services of LSX

Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.

On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.

Cost: Besides, LSX’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.

Confidentiality of client information: Finally, all brand information of client LSX will be 100% confidential.

Please contact us immediately if you have any questions about “Process of applying for a bank loan in Vietnam

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Frequently asked questions

What are the legal documents to prepare for a bank loan?

– ID card/Passport of the borrower and the borrower’s spouse
– Passport/KT3
– Certificate of singleness/marriage registration.

What are the credit profile that need to be prepared for a bank loan?

When coming to the bank, customers need to prepare the following necessary documents:
Valid ID card/Citizen identification card/Passport;
Household registration book/Driver’s license;
Salary statement of the last 3 months, certified by the head of the unit or proof of income;
Labor contract (if any);
Other documents depending on the loan package:

Which bank should I choose for a loan?

Currently, the Government of our country provides a lot of support for citizens to get loans. Bank lending rates have been greatly reduced. However, in order to limit the risk of loan interest rates, you should be familiar with the bank’s loan interest rate regulations from year to year and that bank’s policy.
Interest rates of some reputable banks today
– Vietcombank 7.5%/year.
– Vietinbank 7.7%/year.
– VPBank 6.9 – 8.6%/year.
– ACB 7.5 – 9.0%/year.
– Sacombank 7.5 – 8.5%/year.
– Maritime Bank 6.99%/year.
– Agribank 7.6 – 9.1%/year

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