According to Circular 06 of the State Bank, from September 1, banks are allowed to consider and decide to lend to customers to repay loans at other credit institutions. A series of banks have announced to deploy lending according to this circular.
Many banks quickly announced that the interest rate for loans to pay off other banks is quite low.
Compared to the current 6-12 month term deposit interest rate which fluctuates from 4.7-6.9%, some banks offer loans much lower than the deposit interest rates of many other commercial banks.
VietinBank has just announced loans to repay other banks' debts according to the content of Circular 06. Accordingly, customers who need to borrow capital to repay debts early at other banks for loans serving production and business and consumer loans with collateral (loans to buy houses, cars, etc.) will be supported with preferential loans with interest rates from only 5.6%/year.
Specifically, the interest rate for personal loans is only from 5.6%/year (business loans) and from 7.5% (consumer loans). The loan amount is up to 100% of the remaining principal balance at other banks, with a principal grace period of 24 months. The maximum loan term is 35 years and does not exceed the remaining term of the loan at other banks.
Customers can use their own assets that are being mortgaged at another bank such as real estate/cash/deposit account balance/book/savings card/valuable papers... of the customer or relatives to secure the loan.
Vietinbank's loan interest rate of only 5.6% to repay debt is currently lower than the 6-month deposit interest rate of most commercial banks.
Similarly, BIDV Bank has launched this loan package with interest rates starting from only 6%/year. BIDV said that for short-term loans under 12 months, interest rates start from only 6%/year; or from 6.8%/year for medium and long-term loans from 12 months or more.
The bank commits to a loan amount of up to 100% of the remaining principal balance and matching the next payment cost of the loan plan for loans at other banks.
Principal grace period is 24 months and does not exceed the remaining principal repayment grace period of the loan, loan term is up to 30 years and does not exceed the remaining term of the loan at another bank.
Military Bank (MB) said it is implementing a program to transfer real estate loans from other banks with an interest rate of 8%/year fixed for 12 months. The loan term is up to 300 months and the source of funding can be flexibly demonstrated through accumulated assets. Customers can use the mortgaged assets at the old bank to secure the new loan.
Techcombank is also implementing this program with interest rates from 7.3%/year. Techcombank applies loans for purchasing real estate projects with certificates; loans for purchasing real estate without certificates but purchased at projects affiliated with Techcombank. Requires outstanding loans for real estate purchases at other banks from 1 billion VND or more, loans are not supported with interest rates and principal grace period in the last 12 months.
Previously, Vietcombank also announced that customers can borrow capital with a loan term of up to 30 years but not exceeding the remaining loan term of the loan at the borrowing bank. The maximum loan amount is 100% of the outstanding principal of the loan at the borrowing bank. In addition, customers are granted a grace period for principal repayment of up to 24 months and in accordance with Vietcombank's regulations.
Vietcombank's preferential loan interest rate is only from 6.9%/year in the first 6 months or 7.5%/year in the first 12 months or 8%/year in the first 24 months.
Although preferential interest rates are advertised, customers who borrow money from this bank to repay debt at another bank should note that they will have to pay a penalty fee for early repayment, usually from 0.5 to 2% or higher depending on each lending bank and specified in the original loan contract.
In addition, customers will also have to pay a series of other fees such as: red book mortgage release fee, new mortgage re-registration fee, notary fee, insurance fee for new loan,...
Besides, the procedures to transfer assets mortgaged at the old bank to mortgage at the new bank will certainly take a lot of time and cost and the borrower will have to bear it.
Furthermore, to be approved for a loan by banks, customers must have a history of timely repayment according to information from CIC, and must also prove a guaranteed monthly income to repay the loan.
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