Customers can transfer debt to a bank with lower interest rates.

Ms. Thanh Thao (District 10, Ho Chi Minh City) indignantly said: "The bank loan in the past 5 years has received almost no support, even during the tense Covid-19 lockdown. I pay on time every month, but the bank still charges high interest rates, regardless of whether I am a loyal customer or not."

Five years ago, Ms. Thanh Thao borrowed 5 billion VND from the bank. Up to now, she has paid back nearly half of it, but the monthly payment to the bank has not decreased, nearly 50 million VND per month, including principal and interest. The reason is that in the first year of the loan, the interest rate that the bank charged Ms. Thanh Thao was 8%/year, but after the preferential period, the bank's interest rate continuously increased. At its peak in March 2023, the bank charged the remaining loan interest rate to 13.1%/year, making Ms. Thanh Thao upset.

Therefore, when informed that customers will soon be allowed to transfer this loan to another bank if they can negotiate a lower interest rate, Ms. Thanh Thao happily said: "This way, customers who pay their debts on time like me will have the opportunity to negotiate the old interest rate. They will not be taken advantage of by the bank during the loan period."

Khách hàng vay cũ có thể chuyển nợ sang ngân hàng có lãi suất thấp hơn - Ảnh 1. — Banks are allowed to lend to individuals to repay loans at other credit institutions.

This is a regulation in Circular 06/2023 amending and supplementing a number of articles of Circular 39/2016 (Circular 39) regulating lending activities of credit institutions (CIs) to customers of the State Bank. Circular 06 supplements the regulation that CIs are allowed to consider and decide to lend to customers to repay loans at other CIs for the purpose of borrowing to serve living needs. In the current Circular 39/2016, customers are only allowed to borrow to repay loans at other CIs for loans serving production and business, not applicable to loans serving living needs.

Expanding the regulation for customers to repay debts at other credit institutions to apply to both loans for business activities and living needs will create conditions for customers to access more bank credit capital, and have more opportunities to choose better services and utilities at other credit institutions (if any).

For example, in the case of an individual customer who has outstanding debt for a home loan at bank A while at bank B, the same home loan has a lower interest rate; at the same time, the customer will enjoy additional incentives. With this regulation, the customer can completely go to bank B to propose a loan request to repay the loan early at bank A. Thus, the customer can easily access a new loan at a lower cost, access and use new services. Circular 06 will take effect from September 1, 2023.

In addition, the State Bank also said that for the need to borrow capital to serve essential consumer needs, personal and household consumption purposes such as loans to buy cars, buy consumer equipment, etc., customers do not need to have a plan or project. Accordingly, customers only need to have information about the total capital needed to use, the purpose of using the capital, the time of using the capital, and the customer's source of debt repayment, without having to develop a specific plan or project to serve their living needs.

For capital loan needs to serve life to buy houses, build, renovate houses; receive transfer of land use rights to build houses which are often of great value, new customers must supplement the plan and project in the loan application for this capital need so that the credit institution has full information about the customer's loan purpose and to ensure supervision of the customer's use of the loan for the right purpose.

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