Vietnam: What is the interest rate on a bank loan to buy an apartment? What is the bank loan application to buy an apartment?
What are the requirements for an individual who wants to get a bank loan to buy an apartment?
Pursuant to Article 118 of the 2014 Law on Housing in Vietnam stipulating the requirements applied to houses entered into transactions as follows:
Requirements applied to houses entered into transactions
1. Any house regarding transactions in housing sale, lease purchase, gifting, mortgage, or capital contribution shall meet the requirements below:
a) There is the Certificate as prescribed, except for cases prescribed in Clause 2 of this Article;
b) There is no dispute, complaint, or proceedings for homeownership; the term of homeownership has not expired if the house is under a term contract on housing;
c) The house is not distrained;
d) There is no decision on land revocation, notification of housing clearance or demolishment issued by the competent agency.
The requirements prescribed in Point b and c of this Clause shall not apply to transactions in off-the-plan housing sale or lease purchase.
2. The following transactions in housing are not required the Certificate:
a) Transactions in off-the-plan housing sale or mortgage;
b) Transactions in house of gratitude gifting;
c) Transactions in state-owned housing sale or lease purchase; social housing or non-state-owned housing serving the relocation sale or lease purchase; housing sale prescribed in Clause 4 Article 62 in this Law;
d) Transactions in housing lease, lending, permission for stay, management authorization;
dd) Transactions in housing inheritance;
e) Transactions in transfer of agreement on commercial housing which is under residential construction projects including the case in which the house is received from the investor but the application for the Certificate of that house has not sent to the competent agency.
Any documentary evidence on requirements pertaining to the house to be entered into the transaction as prescribed in this Clause shall comply with regulations of the Government.
3. Any house under lease contract shall both comply with Point b, c, and d Clause 1 of this Article and satisfy requirements pertaining to quality, safety regarding the lessee, electricity system, water supply and drainage, hygiene and environment.
And based on Article 7 of Circular No. 39/2016/TT-NHNN stipulating the eligibility requirements for a loan in Vietnam as follows:
Eligibility requirements for a loan in Vietnam
A credit institution shall consider granting a decision to offer a loan to a customer who meets the following requirements:
1. If that customer is a legal person, it must have civil capacity in accordance with the civil law jurisdictions. If that customer is a natural person, (s)he must be aged exactly 18 years or older and have full capacity for civil conduct in accordance with the civil law jurisdictions, or must be aged between exactly 15 and nearly 18 years and must not have his/her incapacity or restricted capacity for civil conduct as provided by laws.
2. Demonstrate that customer’s demands for a loan to be used for legally accepted purposes.
3. Establish that customer’s plan for effective use of borrowed fund.
4. Prove the customer’s sound financial capability to repay debt owed.
5. Where that customer obtains a loan from a credit institution on which the interest rate is prescribed by Clause 2 Article 13 hereof, it shall be rated transparent and healthy in its financial status by a credit institution.
Thus, to be able to get a bank loan to buy an apartment, the first thing is that the apartment must meet the requirements applied to houses entered into transactions.
Next, borrowers to buy an apartment are required to meet the requirements on civil act capacity, demand for loans, financial ability, etc. according to the above regulations.
Vietnam: What is the interest rate on a bank loan to buy an apartment? What is the bank loan application to buy an apartment?
What is the bank loan application to buy an apartment?
Pursuant to Article 9 of Circular No. 39/2016/TT-NHNN stipulating the loan application as follows:
Loan application
When there is a demand for a loan, a customer must send a credit institution documents evidencing its eligibility for such loan in accordance with Article 7 hereof and others as referred to in the credit institution's instructions.
Thus, it can be seen that when you want to make an application for an installment loan to buy an apartment, you need documents evidencing its eligibility for such loan in accordance with Article 7 of Circular No. 39/2016/TT-NHNN, in addition, each credit institution will have different requirements and guidelines for loan applications.
What is the interest rate on a bank loan to buy an apartment?
Pursuant to Article 13 of Circular No. 39/2016/TT-NHNN stipulating loan interest rate in Vietnam as follows:
Loan interest rate in Vietnam
1. A credit institution and its customer shall agree on the interest rate depending on capital demands and supplies on the market, loan demands and creditworthiness of customers, unless otherwise stipulated by the State Bank's regulations on the maximum interest rate set forth in Clause 2 of this Article.
2. A credit institution and customer shall agree on the interest rate on short-term loan denominated in Vietnamese dong but shall not allow it to exceed the maximum interest rate decided by the State Bank’s Governor over periods of time in order to meet certain demands for borrowed fund as follows:
a) Loans taken out to support the agricultural and rural development sector under regulations of the Government on credit policies for agricultural and urban development;
b) Loans taken out to implement the export business plan in accordance with the Law on Commerce and other instructional directives thereof;
c) Loans taken out to finance business activities of small and medium-sized enterprises under the Government’s regulations on support for development of small and medium-sized enterprises;
d) Loans taken out to develop ancillary industries under the Government’s regulations on development of ancillary industries;
dd) Loans taken out to finance business operations of high technology application enterprises under the provisions of the Law on High Technology and other instructional directives thereof.
3. Terms and conditions of an agreement on the interest rate shall comprise interest rate levels and methods for calculating the interest rate on a loan. Where the interest rate is not converted into %/year and/or the method for calculating the interest rate based on the actual outstanding amount of debt and time length of maintenance thereof is not applied, the loan agreement must include terms and conditions of the interest rate converted into %/year (one year is calculated as three hundred and sixty five of days) according to the actual outstanding amount of debt and time length of maintenance thereof.
4. If a customer fails to repay or fully repay the agreed amount of loan principal and/or interest at the payment due date, the customer shall be obliged to repay loan interest as prescribed hereunder:
a) The amount of interest on principal is charged at the agreed interest rate in proportion to the period during which repayment of that principal due has not been made;
b) If a customer fails to make due payment of interest as prescribed by Point a of this Clause, that customer must pay late payment interest charged at the interest rate agreed upon between the credit institution and customer which is not allowed to exceed 10%/year interest rate on the outstanding balance of late payment interest in proportion to the period of late payment;
c) Where a debt has become delinquent, the customer owing a delinquent debt must pay interest on the outstanding amount of principal which is overdue in proportion to the period of late payment for which the interest rate charged is not allowed to exceed 150% of the interest rate charged on due repayment that is determined upon the date of such debt becoming delinquent.
5. Where the variable interest rate is applied, a credit institution and customer must enter into an agreement on principles and factors for determination of the variable interest rate, and on the date of adjustment to the loan interest rate. In cases where referring to factors for determination of the variable interest rate results in different loan interest rates, the credit institution shall apply the lowest loan interest rate.
Thus, in the case of a bank loan to buy an apartment building, the loan interest rate will be agreed upon by the two parties based on market factors, loan demand and the creditworthiness of the customer (unless otherwise provided by law).
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