What is an online loan? If borrowing money online but do not pay, how much is fine, and is there a prison sentence in Vietnam?
- What is an online loan according to Vietnamese regulations?
- Consequences when borrowing money online but not paying according to Vietnamese regulations? How much does it cost to borrow money online without paying?
- Criminal prosecution when borrowing money online but not paying according to Vietnamese regulations?
- Some notes when borrowing money online according to Vietnamese regulations?
What is an online loan according to Vietnamese regulations?
Borrowing money online is first and foremost a form of borrowing money through a property loan contract.
Pursuant to the provisions of Article 463 of the 2015 Civil Code, the property loan contract is:
"Section 463. Contracts for loan of property
Contract for the loan of property means an agreement between parties whereby a lender delivers property to a borrower. When the loan falls due, the borrower must repay the lender property of the same type in accordance with the correct quantity and quality, and must pay interest if so agreed or so provided by law."
Thus, an online loan is a form of borrowing money through a loan contract. In which, the parties sign the loan contract through the internet or through loan applications.
An online loan application (online loan app) is actually an unsecured loan application, the borrower does not need collateral and the lender relies on the borrower's reputation for income and ability to repay the loan.
Online loan transactions are done online, through websites, online exchanges, or applications installed on smart mobile phones (smartphones).
Borrowing and lending money through the app is very convenient, people who need a loan are quickly met with some simple registration operations on the computer such as: downloading the app, filling in personal information, receiving account number money, sending personal photos and identity cards, agree to let the app access personal contacts.
Currently, there are many banks and organizations that have deployed online loan applications to facilitate the simple form of borrowing money for people. However, there are also many people who use online loan applications for the purpose of loan sharking with extremely high-interest rates. Therefore, people need to be very careful and need to choose reputable loan apps to borrow money accordingly.
What is an online loan? If borrowing money online but do not pay, how much is fine, and is there a prison sentence in Vietnam?
Consequences when borrowing money online but not paying according to Vietnamese regulations? How much does it cost to borrow money online without paying?
Pursuant to Article 466 of the 2015 Civil Code, the borrower's debt repayment obligations are:
"Article 466. Obligations of borrowers to repay loans
1. Where the property lent is a sum of money, the borrower must repay the lender the loan in full when due. If the property is an object, the borrower must deliver to the lender an object of the same type, quantity and quality, unless otherwise agreed.
2. Where a borrower is not able to deliver an object, it may, with the consent of the lender, repay the value of the borrowed object, in cash, as at the time and place of delivery.
3. The place for repayment of a loan shall be the place of residence or head office of the lender unless otherwise agreed.
4. If a borrower fails to repay all or any installment of an interest-free loan, in whole or in part, when payment falls due, the borrower must, if the parties so agree, pay interest on the overdue amount from the due date until the date on which payment is made, at the basic interest rate prescribed in Clause 2 Article 468 of this Code, unless otherwise agreed or otherwise prescribed by law.
5. If a borrower fails to repay, in whole or in part, a loan with interest, the borrower must pay:
a) Interest on the principal as agreed in proportion to the overdue loan term and interest at the rate prescribed in Clause 2 Article 468 in case of late payment;
b) Overdue interest on the principal equals one hundred and fifty (150) percent of the interest rate in proportion to the late payment period unless otherwise agreed.”
Accordingly, in case the borrower borrows money through the form of an online loan, it is obliged to pay including principal and interest.
In case the online borrower fails to repay the loan, the following actions will be taken:
Borrowers have to pay loan interest when borrowing money online
Pursuant to the provisions at Point a, Clause 4, Article 13 of Circular 39/2016/TT-NHNN stipulating that online borrowers at lawful organizations must pay loan interest:
- 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:
+ The amount of interest on the principal is charged at the agreed interest rate in proportion to the period during which repayment of that principal due has not been made;
+ 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;
+ 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.
Being "reminded" by the lender
Pursuant to the provisions of Clause 7 Article 1 of Circular 18/2019/TT-NHNN stipulating measures to urge and recover debts of the lender:
“7. Point dd clause 2 Article 7 shall be amended and supplemented as follows:
“d) Actions to be taken to push customers into repaying and collect debts which are relevant to specific customers, conform to laws and exclude any threat to customers. The maximum rate of sending debt repayment reminders shall be 05 (five) a day; the method and time frame of reminding debt repayment which are agreed upon in consumer lending contracts, especially such time frame that must be between 7 (seven) and 21 (twenty one) o’clock; a ban on sending debt repayment reminders, debt repayment requests and information about debt collection to organizations or individuals that are not liable to pay debts to finance companies, unless otherwise required by competent regulatory authorities regulated by law; customer information confidentiality prescribed by law;”.
Accordingly, the lender has the right to remind the debt through a number of forms such as texting, calling, sending mail, etc. However, it is necessary to ensure that the maximum number of debt reminders is 05 (five) times / 01 (one) day, the form of debt reminder, and the time of debt reminder agreed by the parties in the consumer loan contract but must be within a period of time from 7 (seven) hours to 21 (twenty-one) hours.
A fine ranging from VND 2,000,000 to VND 3,000,000 in case the borrower does not pay online
Pursuant to the provisions of Point c, Clause 1, Article 15 of Decree 144/2021/ND-CP on administrative sanctions in case of conditions and ability but deliberately not paying:
"Article 15. Violations against regulations on causing damage to property of other organizations or individuals
1. A fine of from VND 2.000.000 to VND 3.000.000 shall be imposed for any of the following violations:
...
c) Taking a loan, borrowing, leasing property of another person or receiving property of another person under a contract, then uses deception to appropriate it or refuses to repay the loan or return the property when the repayment or return of property is due despite he/she is capable of doing so."
Accordingly, in case the borrower has money but does not pay when borrowing money online, it may be fined from VND 2,000,000 to VND 3,000,000.
Criminal prosecution when borrowing money online but not paying according to Vietnamese regulations?
In case online borrowers borrow money online but do not pay, they may be fined for the crime of abusing trust to appropriate property.
Pursuant to the provisions of Clause 35, Article 1 of the Law amending the Criminal Code 2017, the penalties for abusing trust to the appropriate property are as follows:
- Those who commit one of the following acts to appropriate other people's property valued from VND 4,000,000 to under VND 50,000,000 or under VND 4,000,000 but have been administratively sanctioned for the act appropriating property or has been convicted for this crime or for one of the crimes specified in Articles 168, 169, 170, 171, 172, 173, 174 and 290 of this Code, not yet entitled to criminal record remission but also or property is the main means of livelihood of the victim and his/her family, the offenders shall be subject to non-custodial reform for up to 03 years or a prison term of between 06 months and 03 years:
+ Borrowing, borrowing, renting a property of another person or receiving another person's property in the form of a contract and then using deceitful tricks or running away to appropriate such property or on time to return the property even though there is conditions and possibilities but deliberately not paying;
+ Borrowing, lending, or renting another person's property or receiving another person's property in the form of a contract and using that property for illegal purposes, leading to the inability to return the property.
- Committing the crime in one of the following circumstances, the offenders shall be sentenced to between two and seven years of imprisonment:
+ Organized;
+ Be of a professional nature;
+ Appropriating property valued between VND 50,000,000 and under VND 200,000,000;
+ Abusing positions and powers or taking advantage of the name of agencies or organizations;
+ Use cunning tricks;
+ Causing adverse effects on social security, order, and safety;
+ Dangerous recidivism.
- Committing the crime of appropriating property valued between VND 200,000,000 and under VND 500,000,000, the offenders shall be sentenced to between 5 and 12 years of imprisonment.
Committing the crime of appropriating property valued at VND 500,000,000 or more, the offenders shall be sentenced to between 12 and 20 years of imprisonment.
The offenders may also be subject to a fine of between VND 10,000,000 and 100,000,000, a ban from holding certain posts, practicing certain professions, doing certain jobs for between 01 and 05 years, or having part or all of the asset.
Some notes when borrowing money online according to Vietnamese regulations?
When borrowing money through the app, borrowers need to find out, choose a reputable service provider, and fully display the information on the website such as Company name, business code, address, policies specific loan interest rates (early repayment, late payment, ...) contract form, responsibilities of the parties participating in the transaction.
Currently, in addition to the traditional legal lending institutions operating openly and transparently, there have been many money-lending apps hiding in the form of "black credit", lending with "exorbitant" interest rates. To distinguish, users need to carefully learn about terms, services, regulations on interest, fees, and debt repayment limits... before deciding to borrow money through the app.
Thus, in case the borrower borrows money online but does not pay but commits the crime of trusting appropriate property, he or she can be sentenced to up to 20 years in prison.
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