Students Borrowing Capital for What Purposes? What is the Maximum Loan Amount for Students?
Students Borrowing Loans: Purpose and Eligible Borrowers
Based on Article 1 of Decision 157/2007/QD-TTg on credit policies for students issued by the Prime Minister of the Government of Vietnam, credit policies for students are applied to support students with difficult circumstances. These policies assist in covering the costs of studying, living expenses for students during their time at school, including:
- Tuition fees;
- Costs for purchasing books, study materials, living expenses including food, accommodation, and travel.
Based on Article 2 of Decision 157/2007/QD-TTg (amended by Clause 1 Article 1 Decision 05/2022/QD-TTg) regarding credit policies for students issued by the Prime Minister of the Government of Vietnam, students with difficult circumstances studying at universities (or equivalent to universities), colleges, professional secondary schools, and vocational training institutions established and operating under Vietnam law include:
- Students who are orphans of both parents or orphans of one parent but the other parent is incapable of working.
- Students who are members of households belonging to one of the following categories:
+ Poor households as per the legal standards.
+ Near-poor households as per the legal standards.
+ Households with average living standards as per the legal standards.
- Students whose families face financial difficulties due to accidents, illnesses, natural disasters, fires, epidemics during their study period, confirmed by the People's Committee of the commune, ward, or commune-level town where they reside.
Students Borrowing Loans: Purpose, and Maximum Loan Amount for Students
Conditions for Students to Borrow Loans
Based on Article 4 of Decision 157/2007/QD-TTg stipulating the loan conditions as follows:
Loan Conditions:
1. Students living in households with legal residency in the local area where the loan is offered, meeting the standards defined in Article 2 of this Decision.
2. For first-year students, they must have an admission notice or a confirmation letter of admission from the school.
3. For students from the second year onwards, they must have a confirmation letter from the school about their ongoing studies and must not be subject to administrative penalties or more severe penalties for actions such as gambling, drug addiction, theft, smuggling.
Hence, students need to meet the following conditions to borrow loans:
- Students belong to the loan-eligible category with a confirmation from the People’s Committee of the commune, ward where they reside as per the legal situation.
- First-year students must have an admission notice or a confirmation letter of admission from the school.
- From the second year onwards, students must have a confirmation letter from the school about their ongoing studies and must not be subject to administrative penalties or more severe penalties for actions such as gambling, drug addiction, theft, smuggling.
Maximum Loan Amount for Students
Based on Article 5 of Decision 157/2007/QD-TTg (amended by Clause 2 Article 1 of Decision 05/2022/QD-TTg), the maximum loan amount is 4,000,000 VND/month/student.
Loan Procedures for Student Households
Based on Section II of Guidance 2162A/NHCS-TD of 2007, the loan procedures for student households are implemented as follows:
Step 1: Submit a Loan Application Form
The borrower writes a Loan Application Form along with the School Confirmation or Admission Notice and sends it to the Savings and Credit Group.
Step 2: The Savings and Credit Group receives the loan application and holds a meeting to assess the loan application, check the elements on the Loan Application Form, and ensure they meet the loan policy of the Government of Vietnam.
In case the borrower is not yet a member of the Savings and Credit Group, the existing group in the village may admit new members or form a new group if conditions allow. If there are only 1 to 4 new borrowers, they may be admitted to the existing group, even if the group already has 50 members.
After that, compile a list of households applying for loans from the Bank of Social Policies with the Loan Application Form, School Confirmation, or Admission Notice and submit it to the commune-level People’s Committee for verification.
Step 3: After obtaining verification from the commune-level People’s Committee, the Savings and Credit Group sends the entire loan application dossier to the Bank of Social Policies for loan approval processing.
Step 4: The Bank of Social Policies receives the dossier from the Savings and Credit Group; the bank officer assigned by the Director checks and verifies the legality and validity of the loan dossier, submits it to the Credit Department Head and Director for loan approval. Upon approval, the Bank of Social Policies issues a notification on the loan approval results to the commune-level People’s Committee.
Step 5: Disbursement of Loan
The commune-level People’s Committee notifies the local political-social organization and the Savings and Credit Group to notify the borrower to proceed to the transaction point at the commune or the Bank of Social Policies’ office to receive the loan.
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