Understanding consumer loans to get good interest rates

Consumer loans are welcomed by young customers

As life improves, due to dynamism and keeping up with jobs that require innovation and creativity, the way young people think about borrowing has also changed a lot. To "bring home" a new motorbike to serve her daily work needs, Ms. Thanh Hoang (24 years old, employee of Sieu Viet Solution Company) decided to borrow from a finance company because she did not want to miss the opportunity to get a good price, choosing a loan package with a term and interest rate suitable to her financial ability. The procedures only took a few hours to complete by searching for information on the finance company's website.

Like Ms. Thanh Hoang, consumer loans and installment payments have become popular solutions for young customers who tend to be independent and want to experience things but do not have enough financial resources.

According to a report by the National Financial Supervisory Commission, Vietnam is considered to be in the "golden" period for developing consumer credit, when the target customer group is about 30 million people, aged 20-50.

Explaining this trend further, Dr. Can Van Luc, a member of the National Financial and Monetary Policy Advisory Council, said that young customers choose to borrow consumer loans from legal credit institutions because of quick and convenient procedures, much lower interest rates than unofficial online loan apps or black credit, and fewer social consequences due to being managed by the State Bank.

Currently, many large financial companies such as FE Credit, Home Credit... have taken specific actions to improve financial knowledge for people. Illustrative photo

Understand correctly, borrow correctly

According to economic expert Dr. Can Van Luc, there are two ways to help young people proactively reduce loan interest rates. One is to ensure a good credit record. Two is to avoid bad debt because if there is a bad debt history, the finance company will definitely not apply a lower interest rate for the next loan. If the borrower has a "good" record (stable income, no overdue debt, not too many loans...) he will receive a lower interest rate than someone with a "not so good" record.

However, Dr. Can Van Luc also noted that in order to manage finances well, it is necessary to pay attention to the responsibility of repaying debts when borrowing. To do so, borrowers need to clearly determine their financial capacity before signing a loan contract: "Many people do not research or consider carefully before borrowing, so they cannot balance their income and are under great pressure when they start to repay debts."

Sharing the same view, Dr. Nguyen Tri Hieu also said: “Borrowers need to determine their borrowing goals and financial capacity to repay the debt in full and on time. Before signing a loan contract, they also need to read the terms carefully, especially the terms on interest rates and payment terms, and understand them clearly before signing.”

Currently, many large financial companies such as FE Credit, Home Credit... have taken specific actions to improve financial knowledge for people such as issuing consumer loan handbooks, organizing seminars to share personal financial management skills, accompanying workers, providing free consultation to thousands of customers at shopping centers, supermarkets... At the same time, offering many products to meet all customer needs. However, customers need to pay attention to choosing loan packages that suit their financial capacity, avoiding risks in the debt repayment process later.