Important Considerations When Taking Out Consumer Loans

Consumer loans are becoming a popular form of borrowing from various financial institutions. Each institution has its own regulations and conditions for customers, so it's essential to understand and pay attention to the following information before deciding to borrow.

Distinguishing Types of Consumer Loans

Secured loans

Secured loans (loans with collateral) are a common form of consumer lending offered by many banks, and they are a preferred choice for many customers. With this type of loan, customers must have assets to secure the loan approval.

Secured loans offer several outstanding advantages, including relatively low interest rates, typically averaging around 7% per year, and a maximum loan term of up to 25 years. Customers can access substantial loan amounts, potentially up to 70% of the collateral's value.

See more: Low-interest consumer loans

Unsecured Loans

Unsecured Loans When applying for unsecured loans, customers do not need to pledge assets as collateral. In this case, financial companies approve loans based on income documentation and the customer's creditworthiness.

This type of borrowing does not require collateral, and the application process is straightforward, usually taking only 1-2 days to complete. The disbursement process is also swift, helping meet customers' shopping and consumption needs.

Unsecured Loans at Shinhan Finance

Shinhan Finance provides financial services to help millions of domestic customers achieve success, contribute to overall prosperity, and support sustainable development throughout Vietnam.

We offer numerous significant benefits for customers seeking unsecured loans at Shinhan Finance:

• Minimum interest rates ranging from 18% to a maximum of 40% per year, calculated on the reducing balance.
• Loan amounts of up to 12 times the monthly income, with a maximum of 300 million VND, for personal and lifestyle purposes.
• Loan terms ranging from a minimum of 12 months to a maximum of 48 months.
• Disbursement within 48 hours after the loan application is approved.

Key Considerations When Taking Out Consumer Loans

When applying for unsecured consumer loans, customers should pay close attention to the following:

Document Submission

The document submission process is crucial when applying for consumer loans. Thoroughly prepared and complete documentation that aligns with your financial capability and creditworthiness will lead to faster loan approval. When preparing your loan application, ensure that you provide all the required and accurate information. You can also seek guidance from loan officers to review your documents to ensure they meet the necessary standards.

See more: What is the interest rate for unsecured loans?

Budget Planning

To alleviate financial pressure and mitigate the risk of being unable to repay your loan, it's essential to plan and budget before taking out a consumer loan. Beyond your fixed monthly expenses, you will have to account for loan repayments and interest. A detailed budget plan empowers you to manage your finances proactively and minimize financial stress.

Choosing the Right Loan Package

The choice of loan package depends on your specific funding needs. If you require a substantial loan amount, you may need to offer collateral, which typically results in lower interest rates. Conversely, smaller loans without collateral usually come with higher interest rates. Therefore, it's important to thoroughly research and understand the available loan options and select the one that aligns with your needs and repayment capacity.

Careful Review of Contract Terms

When taking out consumer loans, borrowers should carefully scrutinize every clause in the contract to ensure legal compliance and prevent future disputes. Some key aspects to pay attention to in the loan agreement include:

• The total amount due at the end of the loan term, the applicable interest rate, any incurred or additional fees.
• Loan repayment period and the option for early repayment.
• Payment methods: bank transfers, cash, credit cards, etc.
• Loan disbursement date and interest calculation method.
• Obligations and responsibilities of both the lender and the borrower, along with data security clauses.

Consumer loans are a prevalent financing option in the current market. Depending on your financial needs and capabilities, you can choose the most suitable loan package. Remember that a detailed spending plan is essential to reduce financial pressure during the borrowing process.