TRAINNING & COACHING

PERSONAL CREDIT LOANS

I. Credit Institutions

1. Legal

Legitimate credit institutions are banks and finance companies under the management and control of the State bank with lending interest rates within the prescribed range.

When making a loan transaction, both the lender and the borrower are guaranteed their rights and interests in accordance with the law .

2. Illegal

Illegal lenders are institutions that lend at high interest rates that exceed legal limits, such as usury, or lenders that do not display a specific interest rate.

These individuals and organizations are not subject to the management of the law.

II. How to borrow from legal credit institutions

Currently, there are many banks and financial companies providing unsecured loans.

We can go to any bank for detailed advice on loans, documents, procedures, interest rates... Refer to many banks to choose the bank with the lowest interest rate.

Example profile at Vietcom Bank:

Loan package information:

Customers:

• Individual customers of working age.  
• Customers who receive salary from the State Budget or have stable after-tax salary from 06 million VND/month or more.

Documents to be prepared:

Loan process:

• ​Step 1: Contact Vietcombank's transaction points for advice on loan conditions and documents.
• Step 2: Prepare and submit the application under the guidance of the consultant.
• Step 3: Vietcombank performs the appraisal and announces the approval results
• Step 4: Prepare documents / carry out procedures before disbursement
• ​Step 5: Disbursement

  III. Characteristics, consequences and ways to prevent illegal credit loans.

1. Characteristic

Because the demand for loans for personal financial activities is quite large, it is easy for illegal individuals and organizations to sneak into people's lives. To avoid the trap, you need to remember the following characteristics:

• The loan procedure is very simple and fast, just need to ask for personal papers and documents for the vehicle you own, in addition, the application is approved very quickly, only within 10 minutes to 30 minutes. .
• Simple contracts, even verbal agreements, with no accompanying paperwork.
• Very high interest rate: From 100% to 360%/year depending on the loan amount.
• Deferred payment will be handled according to the "law of the jungle", "the law of the Gypsy", ... or the debt collection team is very aggressive and fierce.
• Lenders are usually individuals or organizations that are not authorized by law.

2. Consequence

• Because of the high interest rates, the loan situation increased many times over, the borrower could not afford to pay.
• Debt collection is constantly harassing, disturbing relatives, friends, companies ... affecting life and risk of losing jobs.

3. Prevention

• Stay away from ads calling for preferential loans, or applying for credit cards that do not prove income or low income, .. at social networking sites, bulletin boards, intersection flyers, or power poles. …
• It is advisable to find out loan information from reputable banks or financial websites with the guarantee of the Ministry of Industry and Trade

• It is necessary to have a good plan to repay the loans to avoid falling into debt collection, coercion, sanctions..
• Should you check with friends and colleagues before deciding whether to borrow money from an individual or an organization?
• When you need to borrow money from banks, you can contact the HC Board for instructions.

Borrowing from illegal organization and abetting illegal and becoming a lawbreaker.

4. CIC . Credit Score

1. The concept of CIC

CIC credit score is an indicator to assess the creditworthiness of customers in the history of loans at banks or financial institutions. Each individual's credit score is assessed and recorded at the Vietnam National Credit Information Center (CIC for short), which is under the management of the State Bank. The higher your credit score, the more likely you are to be approved for a loan. Conversely, a low credit score makes it difficult for customers to access loans.

2. Factors affecting CIC credit score

• Debt payment history (35%)
• Credit debt up to the time of borrowing (30%)
• Credit account opening time (15%)
• Credit Type (10%)
• New credit account (10%)

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The graph shows the components that affect the credit score rating

3. How to improve and not lower your CIC

• Debt payment obligations on time :  As mentioned above, repayment history accounts for 35% of the CIC score assessment rate. Therefore, customers who fulfill their debt repayment obligations on time will help improve their CIC credit score.
• Limiting credit relationships with many parties: Using at the same time as having many loans opened at many different institutions poses many risks to the customer's ability to repay.
• Do not use your name to make a loan application on behalf of someone else: Making a loan application in your name for someone else is a very risky job for the customer.
• Do not borrow more or open more credit cards beyond your ability to pay: Customers should properly assess their own ability to pay before deciding whether to take a new loan or not.
• Don't cancel credit cards less than 6 months old: Canceling credit cards under 6 months will affect your credit score.

More about loans, limits and procedures can be found on the personal credit and loans website: https://cic.gov.vn/

Kieu Giang