Banks Offer Low-Interest Loans for Early Debt Repayment under Circular 06

State Bank Circular 06/2023/TT-NHNN (Circular 06) comes into force on September 1st. Banks are allowed to think about and decide to lend money to individual customers in order to repay loans from other credit institutions early.

A number of commercial banks have announced the launch of loans under this program with interest rates as low as 5.6-7.5%/year.

According to Dao Minh Tu, deputy governor of the State Bank, allowing banks to lend money to customers to repay their debts to other banks ahead of schedule is actually one of the solutions to force commercial banks to lower lending rates. From then on, loan interest rates will increase and become more competitive.

But it’s not just coal companies that have difficulty getting this loan; banks also appear to be “powerless.”

Share with VietnamNetMr. Nguyen Hong Phuc, director of the SHB Can Tho branch, said that the SHB is carrying out the implementation, but the Can Tho branch currently has no outstanding loans under this program.

According to Phuc, the biggest obstacle at present is that lending to repay another bank’s debt requires consensus from all three parties, including: the customer, the lending bank (new bank) and another bank (where the customer borrows granted). Were).

“There are customers who come to our branch to ask questions. “However, the biggest difficulty is that other banks want to keep their customers, so these cases are still in the negotiation stage,” Mr Phuc said.

Meanwhile, a loan specialist at a Vietcombank branch said that loan products to repay other banks’ debts have actually been used for a long time, but the borrowers are only corporate customers, this time Circular 06 is allowed for both individual customers.

“However, the branch has not currently taken any outstanding loans for early repayment of debts from other banks as per Circular 06,” it said.

According to the credit specialist’s report, the reality of business customers used to date shows that companies that want to borrow money to pay off debts from another bank must request documents from another bank.

“The credit limit and the maximum loan term depend exclusively on the original lending bank.” In this case, we have to carry out a new assessment with the relevant documents. “In general, the procedures are just as normal as for lending to companies,” added the Vietcombank credit specialist.

In addition, additional fees at the old bank may be borne by the customer, depending on which contract was concluded between the two parties.

A credit specialist in VietinBank’s retail banking division said that many customers know about this program and have inquired directly with the bank.

In this case, bank employees only know how to advise customers about the necessary procedures. But in reality, problems arise so customers just stop… figuring it out.

“When customers ask, we guide them to complete documents in accordance with regulations. “For example, the documents stored in another bank, the customer’s current financial position, the customer’s current outstanding debts, etc. In addition, the customer must also pass the internal inspection and control phase according to each bank’s regulations,” this person said.

This loan specialist also revealed that according to Circular 06, the VietinBank branch where he works does not yet have any outstanding loan balance to repay to other banks.

“We only implement it in accordance with the regulations and there are no additional procedures or costs other than the instructions from the headquarters.” The banks are also not lacking in loan funds. This year, lending is more comfortable and we have not seen any instructions to tighten lending like last year,” he shared.

The borrowers at this branch are also very diverse, ranging from agriculture and rice and seafood trading to small traders doing business in the market. However, the majority of customers are still companies and households in the fishing and rice sectors.

It is known that the majority of customers who experience this loan package are those who borrow capital from small commercial banks, while large banking groups such as VietinBank, Vietcombank, BIDV and Agribank have quite similar interest rates. same lower level.