Update the latest regulations on unsecured loans

Unsecured loans are one of the most popular types of loans because of the great advantages that it brings.

Unsecured loans are one of the most popular forms of borrowing because of the advantages it brings. So, what is a mortgage loan? What are the regulations? Let's find out the latest regulations on unsecured loans during this time right here!

What is a mortgage loan?

True to its name: “Unsecured loan” means using your reputation to borrow money without collateral. Its prestige is the ability to be able to pay monthly principal and interest to the lender as shown in monthly salary sheet, car papers, income level, car, payment invoices, ...

This is a new form of loan, which many people are interested in and used in recent times. Unsecured loans give borrowers many outstanding advantages such as absolutely no collateral, quick disbursement, monthly financial control, or the opportunity to invest profitably monthly.

So what are the requirements for unsecured loans for borrowers? Let's find out the latest regulations on unsecured loans through the information below:

General provisions of Vietnamese law on unsecured loans

According to the definition in Clause 1, Article 3 of Circular 43/2016/TT-NHNN: “Consumer lending is the lending by a financial company in Vietnam dong to individual customers in order to meet the demand for purchasing capital, use goods or services for the purpose of consumption of that customer, the customer's family..."

According to Article 344 of the 2015 Civil Code, the security by unsecured credit of a socio-political organization is specified as follows:

The grassroots socio-political organizations can provide unsecured loans for poor individuals and households to borrow a sum of money from credit institutions for production, business and consumption according to the provisions of law.

According to Article 345 of the 2015 Civil Code, the form and content of unsecured credit are prescribed as follows:

Unsecured lending: Loans secured by unsecured loans must be made in writing and certified by a socio-political organization that guarantees unsecured loans on the borrower's conditions and circumstances.

Interest rates on unsecured loans

Due to the high risks of unsecured loans in the form of unsecured loans, the interest rates on unsecured loans will also be slightly higher than many other forms of loans.

Pursuant to Circular 39/2016/TT-NHNN stipulating lending activities of credit institutions and foreign bank branches to customers, the customer and foreign credit institutions and banks shall agree on lending interest rates according to the market's capital supply and demand and the actual credit needs of customers.

Features of unsecured loans

Trust and confidence are intangible assets and cannot be auctioned to recover loans. Therefore, lenders need to consider carefully before deciding to lend unsecured loans.

An unsecured loan is a form of loan that cannot be done in the early stages of the relationship between the lender and the borrower because the nature of unsecured loans is based on trust between the parties. In order to gain credibility, it is usually shown through the borrower's salary sheets, income, payment invoices, etc. in the past months.

The initiative belongs to the lender. Therefore, to ensure all possible risks, lenders need to consider and consider carefully before deciding to lend.

Borrowers play a huge role in the process of creating credibility to be able to borrow unsecured. Therefore, when you want to borrow unsecured loans, you need to be transparent and clear about everything such as payroll, business activities, etc.

Procedure for unsecured loans

Step 1: Register for unsecured loans online or offline and guide to complete the unsecured loan procedures.

Step 2: Appraise the loan application based on the borrower's financial ability.

Step 3: Credit analysis is performed by the bank, assessing the customer's ability to borrow and repay the loan.

Step 4: Review and lend. If the cases are approved, the credit officer will notify and sign the unsecured loan contract.

Step 5: Collect monthly debt as agreed and issue new credit judgment in necessary cases.

Risks from interest rates

Because trust is used to borrow money, the interest rate for unsecured loans will be higher than many other forms of loans, so it is important to pay close attention to this issue.

Risks from legal binding

These legal constraints are contained in the consumer loan contract and are signed between the borrower and the regulated lending institution. Accordingly, lending institutions will be allowed to use measures and operations to recover debts if borrowers fail to repay on time, do not pay the loan amount and interest in full. One of the most common risks is getting bad credit.

This is something no one wants, because it has a big impact on your other loans in the future. Therefore, unsecured borrowers need to pay attention to fully comply with the terms, especially the regulations on the repayment plan.

Above is information about the latest regulations on unsecured loans. Hopefully, this information will help you have more useful knowledge when you intend to take out a mortgage loan.

Good luck!