What are eligibility requirements for a loan in Vietnam? Are 16-year-olds eligible for loans?
What are eligibility requirements for a loan?
Pursuant to Article 7 of Circular 39/2016/TT-NHNN of Vietnam on prescribing lending transactions of credit institutions and/or foreign bank branches with customers issued by the State Bank of Vietnam:
"Article 7. Eligibility requirements for a loan 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."
According to the above regulations, customers who meet the following requirements are eligible for a loan:
- 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.
- Demonstrate that customer’s demands for a loan to be used for legally accepted purposes.
- Establish that customer’s plan for effective use of borrowed fund.
- Prove the customer’s sound financial capability to repay debt owed.
- 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.
What are eligibility requirements for a loan in Vietnam? Are 16-year-olds eligible for loans?
Are 16-year-olds eligible for loans?
Pursuant to Article 7 of Circular 39/2016/TT-NHNN of Vietnam above, the age requirement for customers is 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.
On other hand, according to Clause 1 Article 21 of the Civil Code 2015 of Vietnam:
"Article 21. Minors
1. Minors are persons who are under eighteen years of age.
2. Civil transactions of each child under six years of age shall be established and performed by his/her legal representative.
3. Each person who is from six to under eighteen years of age must have the consent of his/her legal representative to enter in and perform civil transactions, except for civil transactions which are performed for the purpose of meeting the needs of daily life suitable for the age group.
4. Each person who is from fifteen to under eighteen years of age is entitled to enter in and perform civil transactions by himself/herself, except for civil transactions related to real estate, movables required registration and other civil transactions as prescribed by law that are subject to the consent of his/her legal representative."
Thus, according to the above regulations, people who are aged exactly 15 years or older and have full capacity for civil conduct are eligible for loans at banks if they fully meet the remaining loan requirements (above). A loan transaction of people who are from fifteen to under eighteen years of age related to real estate, movables required registration are subject to the consent of your legal representative. Therefore, in case you are 16 years old and want to do business, if you fully meet the above requirements, you will be eligible for a loan.
What are rejected loan demands?
Pursuant to Article 8 of Circular 39/2016/TT-NHNN of Vietnam and Article 1 of Decree 312/QD-NHNN 2017 of Vietnam, banks shall not be allowed to to approve the following loan demands:
“Article 8. Rejected loan demands
Credit institutions shall not be allowed to approve the following loan demands:
1. Loans used for investing in sectors or activities prohibited by laws.
2. Loan used for paying expenses or meeting financial demands of transactions or acts which are prohibited by laws.
3. Loans used for purchasing or using goods or services in the list of sectors or activities prohibited by laws.
4. Loans used for buying gold bullions.
5. Loans used for repaying credit loans owed to lending credit institutions, except for those used for paying loan interest arising during the construction process of which cost is accounted for in the total construction investment approved by a regulatory authority in accordance with laws.
6. Loans used for repaying credit loans owed to other credit institutions and foreign loan debts, except for loans used for repaying debts prior to the payment due date that fully meet the following requirements:
a) Be a loan used for business activities;
b) Have the loan term that does not exceed the residual loan term of an older loan;
c) Be a loan under which the debt rescheduling has not been carried out.”
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