Difficult output, banks open direction for consumer loans

(Baonghean) -In order to free up credit capital, many banks have implemented consumer loans with preferential interest rates. This will contribute to stimulating consumer demand, creating conditions for production and business development.

The Industrial and Commercial Bank, Nghe An branch, has a program: "1,000 billion VND in incentives for new customers", from June 24, 2013 to August 15, 2013. Specifically: For production and business loans, the loan term is less than 24 months: preferential interest rate is 8.5%/year, if the loan term is over 24 months, the preferential interest rate is 9%/year. The preferential period is 1/2 of the loan term, not exceeding 3 months. If the loan is for production and business for over 24 months, the preferential period is 6 months.

Consumer loans: term under 36 months interest rate 10% and over 36 months interest rate 9% / year. Consumer loans include activities of building houses, repairing houses, buying cars.

International Bank (VIB) Nghe An branch also invites customers to borrow for consumption, buying houses, buying cars, with preferential interest rates of 7.77%/year. Loan conditions are advised by consultants: if borrowing for home repair or construction, the necessary condition is to mortgage the land title, and if buying a car, the car registration can be mortgaged. Even individual customers borrowing for production and business purposes can also borrow with preferential interest rates as above. This credit package is implemented from April 22, 2013 to July 22, 2013 or until the full disbursement of the 1,000 billion VND package.

Customers transact at ACB Bank Nghe An branch.
Photo: Quynh Lan

VIPBank also implements loan programs for home construction and repair, with a maximum loan term of up to 15 years, or consumer loans with collateral for purchasing household equipment, weddings, education, medical treatment, etc. The repayment method is monthly interest, periodic principal payment, loan conditions are ID card, household registration of the borrower and the borrower's spouse; copy of Marriage Certificate/copy of Single Certificate of the customer; Loan application and repayment plan; Documents related to the loan purpose such as Construction permit, construction contract, documents proving financial capacity and source of repayment (labor contract, appointment decision, salary decision, etc.); Documents proving legal ownership of the collateral, etc.

However, the preferential loan interest rates of banks are not the same. For example, VIB's interest rate is 7.77%, but the Industrial and Commercial Bank's interest rate is 10%, HDBank's interest rate is 0% for the first month and 11.86%/year fixed for the next 11 months with a package of 1,000 billion VND for the program "buy a car as you wish - satisfy your consumption", loan term up to 72 months for cars with collateral, or 60 months for cars without collateral...

It can be seen that restarting consumer lending activities of banks in the context of economic difficulties is a positive move to "warm up" many markets and production and business. This activity takes place at banks with potential. Some bank branches in Nghe An have not implemented it, such as Maritime Bank... Although banks have had advertising programs, some banks have shown no interest in individual customers. We were introduced to the Personal Customer Department for advice on consumer lending, but when we got there, the staff of the Personal Customer Department of the Industrial and Commercial Bank, Nghe An branch were still confused, showing that they did not know what program it was, and it took a long time to find the branch's instruction document. The staff here said: no customers have come to borrow even though it has been implemented for a week.

When borrowing this program, customers should also be cautious because the preferential interest rate is only for the first 1 or 3 months, after which the interest rate will be adjusted according to the market, the adjustment frequency is once a month. Therefore, in fact, the preferential interest rate is not much compared to the loan term and loan package.

In Nghe An: In the first 5 months of the year, capital mobilization in the area increased by 13% compared to the beginning of the year, most banks have increased mobilization because people with idle money still deposit money in banks instead of buying gold or real estate as before. Meanwhile, capital output is difficult, especially for production and business activities, so consumer lending is considered a new direction to "awaken" the needs of customers and the market. However, for some banks, this is just a marketing trick, "polishing" the name, and whether to lend or not, only when the bank completes the procedures, the borrower will know.

Pearl