Mr. Duc has been a worker at a mechanical factory for nearly ten years, receiving his monthly salary through his bank account. When his nephew was diagnosed with a rare disease, he tried everything to find money for treatment.
But his family was not well off, and he rented a room in the city, without any valuable assets, making it difficult to borrow money. Someone suggested that he borrow money using his salary at the bank, where he still received his monthly salary. He thought this was a good solution, but he was still worried about whether the loan would be approved or if he would have to wait longer.
Is it really easy to borrow money with a salary?
Currently, almost all banks and financial companies in Vietnam have loan products based on monthly payroll. Basically, this is a form of unsecured loan and does not require collateral. The key to the loan is that the bank records the customer's monthly income. This makes it easier to assess loan conditions. But this is just the surface because from having a payroll to successfully borrowing money, there are many other procedures, and borrowing money is not always easy.
First, the borrower needs to have a stable working time. Some banks require that customers must have at least 1 year of working at the company and a labor contract with at least 6 months remaining. This ensures safety for the bank but makes it difficult for many people who frequently change jobs. Next, the average income must reach 7-8 million VND/month. This minimum level ensures that customers have enough money to cover their living expenses and enough money to pay the bank. Third and most importantly, the customer must not have bad debts at other banks or financial companies. In fact, some banks will limit lending when they know that customers have loans at other credit institutions, even if they are not bad debts.
What are the benefits for customers when borrowing with payroll?
Despite the difficult loan conditions, many people still want to borrow in this form. In fact, this form of loan is really "in demand" at all levels because of some special benefits.
First of all, proving income is quite easy, even if borrowing from the bank where you receive your salary, customers almost do not have to do this procedure. Then, the loan approval time is significantly shortened. Next, the approved loan amount will be quite high, depending on each bank, but usually from 10-15 times the monthly salary that the borrower receives. Some banks even approve loans up to 20 times the salary. Finally, the loan period is quite long, usually 5 years, even 10 years.
Things to consider when borrowing money with a paycheck?
First is the interest rate. There is a clear rule that the interest rate of mortgage loans is always lower than that of unsecured loans. The interest rate of payroll loans usually ranges from about 16%/year to 28%/year, and some places even set the interest rate above 30%/year, depending on the loan term and the risk level of the loan.
Next is the borrower's financial management skills. Because the loan approval is relatively easy, borrowers tend to be subjective, which can easily lead to overspending, similar to how many people spend money on credit cards without control, causing themselves to fall into unnecessary debt. In addition, if you borrow from the bank where you receive your salary, it is very likely that the bank will have a condition that allows automatic debt repayment from the customer's monthly salary. Therefore, borrowers need financial management skills to ensure that their daily lives are not affected.
In Mr. Duc's case, he can go to any branch or transaction office of the bank where he receives his salary to request a loan and with his nearly 10 years of working experience, he will certainly be approved for a loan quickly, possibly within 48 hours. However, if he urgently needs an amount of about 10 - 15 million VND to handle urgent problems, he can choose some other popular forms of borrowing money such as asset mortgage loans (pawn). If he chooses this form of borrowing, he needs to find information, choose legal, reputable and widely available borrowing addresses such as the F88 pawn chain to ensure that he is not taken advantage of or falls into the black credit trap.
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