What should be included in the loan agreement in Vietnam? What are the fees related to lending activities in Vietnam?
What should be included in the loan agreement in Vietnam?
Pursuant to Clause 1, Article 23 of Circular No. 39/2016/TT-NHNN stipulating that the loan agreement must be made in writing, including the following minimum requirements:
- Name, address and corporate identity code of the lending credit institution; name, address, number of identification card or citizen identification card or passport of the customer;
- Loan amount; loan limit for a line of credit loan; provisional credit limit for a provisional line of credit loan; overdraft limit for a current account overdraft facility;
- Loan purposes;
- Currency unit used for extending a loan or repaying debt;
- Lending method;
- Loan term; duration to maintain the loan limit for a line of credit loan, effective period of provisional credit limit for a provisional line of credit loan; duration to maintain the overdraft limit for a current account overdraft facility;
- Agreed lending interest rate and interest rate converted into percent (%)/year which is calculated on the basis of the actual amount outstanding and duration of maintenance thereof as prescribed by Clause 3 Article 13 of of Circular No. 39/2016/TT-NHNN;
Principles and factors of determination of interest rate, time of determination thereof in case of application of variable interest rate; interest rate charged on the outstanding amount of overdue principal; interest rate charged on late payment interest; type and amount of loan fee applied;
- Loan disbursement and use of payment instrument for disbursement of borrowed funds;
- Loan principal and interest repayment, and priority order of recovery of loan principal and interest; early debt repayment;
- Debt rescheduling; delinquency of the principal amount that a customer fails to repay at the agreed due date and the credit institution refuses to agree to reschedule; form and contents of notification of such delinquency;
- Responsibilities of a customer for cooperating with the credit institution and providing documents regarding a loan in order for the credit institution to assess application for and grant a decision to offer a loan, inspect and supervise use of borrowed fund and debt repayment of the customer;
- Cases of loan termination; collection of debt prior to the due date; delinquency of the principal amount that the customer fails to repay prior to the due date in the event of the credit institution's loan termination or collection of debt prior to the due date; form and contents of notification of thereof as prescribed by Clause 1 Article 21 of of Circular No. 39/2016/TT-NHNN;
- Loan debt treatment; penalty for loan default and compensation for any loss incurred; rights and liabilities of parties involved;
- Entry into force of a loan agreement.
What should be included in the loan agreement in Vietnam? What are the fees related to lending activities in Vietnam? (Image from the Internet)
What are the fees related to lending activities in Vietnam?
Pursuant to Article 14 of Circular No. 39/2016/TT-NHNN stipulating that fees related to lending activities include:
- Firstly, exit fee paid by a customer for repayment of debt before the due date.
- Secondly, fee paid for provisional credit limit.
- Thirdly, fee paid for syndicated loan arrangement.
- Fourthly, fee paid for a commitment to borrowed fund withdrawal during the period from the date of entry into force of the loan agreement to the date of initial disbursement of borrowed fund.
- Finally, other fees related to lending operations which are specified in relevant legal documents.
In which case can the bank collect debt prior to the payment due date?
Pursuant to Clause 1, Article 21 of Circular No. 39/2016/TT-NHNN stipulating as follows:
Loan termination, debt treatment, loan interest or fee exemption or reduction
1. The credit institution shall be accorded the right to terminate a loan and collect debt prior to the payment due date under terms and conditions of a loan agreement when it has established that the customer provided unauthentic information or violated terms and conditions of a loan agreement and/or loan guarantee contract. Upon terminating a loan and recovering debt prior to the agreed due date, the credit institution shall notify the customer of such loan termination and early debt recovery. The minimum contents of such notification include the date of loan termination and debt collection prior to the due date, the principal amount to be recovered prior to the due date; deadline for repayment of principal amount to be recovered prior to the due date, date of debt delinquency and interest rate applied to the outstanding amount of principal to be recovered prior to the due date.
2. Where the customer fails to make repayment of debt due, the credit institution shall be entitled to apply methods for debt recovery under terms and conditions of a loan agreement, loan guarantee contract and regulations of relevant laws. If the amount of money obtained after application of methods for debt recovery is not adequate to fulfill obligations to pay debt owed to the credit institution, the customer shall keep on assuming responsibility for paying off loan principal and interest in full to the credit institution.
3. Where the customer or guarantor is affected by the court’s decision to open the bankruptcy proceedings or declaration of bankruptcy, the credit institution's recovery of debt owed by the customer and guarantor shall be carried out under regulations of the law on bankruptcy.
4. The credit institution shall have the right to decide to offer the customer loan interest or fee exemption or reduction in accordance with internal rules of the credit institution.
Thus, according to the above regulations, the bank shall be accorded the right to collect debt prior to the payment due date under terms and conditions of a loan agreement when it has established that the customer provided unauthentic information or violated terms and conditions of a loan agreement and/or loan guarantee contract.
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