What is the Interest Rate for Student Loans in Vietnam?

What is the interest rate for student loans in Vietnam?

Based on Article 7 of Decision 157/2007/QD-TTg, the following regulations are established:

Loan interest rate:

1. The preferential loan interest rate for students is 0.5%/month.

2. The overdue debt interest rate is calculated at 130% of the loan interest rate.

Clause 1, Article 1 of Decision 750/QD-TTg of 2015 adjusts the loan interest rate as follows:

Adjustment to reduce the loan interest rate for some policy credit programs at the Social Policy Bank as follows:

1. The loan interest rate for poor households, students, policy-targeted individuals working abroad on a temporary basis, and the National Employment Fund is 6.6%/year (0.55%/month). This provision replaces the provision in Decision No. 872/QD-TTg dated June 6, 2014, by the Prime Minister of the Government of Vietnam on adjusting the reducing of loan interest rates for some policy credit programs at the Social Policy Bank.

2. The loan interest rate for the Clean Water and Rural Environmental Sanitation Program, and for households engaged in production and business in difficult areas is 9.0%/year (0.75%/month). This regulation replaces the provisions in Clauses 2 and 3, Article 1, of Decision No. 1826/QD-TTg dated October 10, 2013, by the Prime Minister of the Government of Vietnam on adjusting the reducing of loan interest rates for some policy credit programs at the Social Policy Bank.

Thus, the loan interest rate for students is 6.6%/year, equivalent to 0.55%/month.

What is the interest rate for student loans in Vietnam? (Image from the Internet)

Vietnam: Can students get an extension if they cannot repay the loan on the due date due to financial difficulties?

According to Article 11 of Decision 157/2007/QD-TTg, the following provisions are specified:

Adjustment of repayment deadline, debt extension, and conversion to overdue debt:

1. On the final repayment date, if the borrower faces difficulties and cannot repay the debt, they must submit a written request for a debt extension, which will be considered by the Social Policy Bank. The extension period is a maximum of half of the repayment term.

2. If the borrower fails to repay the debt on the final repayment date and is not granted an extension, the Social Policy Bank will convert the debt into overdue debt. The Social Policy Bank will coordinate with local authorities and socio-political organizations to take measures to recover the debt.

3. The Social Policy Bank will specifically regulate the adjustment of the repayment deadline, debt extension, and the conversion of debts into overdue debts.

Thus, if students cannot repay the loan on the final repayment date due to difficulties, they may be granted a debt extension if they submit a written request for a debt extension to the Social Policy Bank.

If students do not repay the loan on time on the final repayment date and are not granted an extension, the debt will be converted into overdue debt, and the Social Policy Bank will take measures to recover the debt.

What is the loan amount for students in Vietnam?

Based on Article 5 of Decision 157/2007/QD-TTg as amended by Clause 2, Article 1 of Decision 05/2022/QD-TTg, the loan amount is regulated as follows:

Loan amount:

1. The maximum loan amount is 4,000,000 VND/month/student.

2. The Social Policy Bank specifies the loan amount for students based on the tuition fees of each school and living expenses in each region, but not exceeding the loan amount stipulated in Clause 1 of this Article.

3. When the state’s tuition policy changes and living expenses fluctuate, the Social Policy Bank, in agreement with the Minister of Finance, submits to the Prime Minister of the Government of Vietnam for consideration and decision on adjusting the loan amount.

Thus, students can borrow a maximum of 4,000,000 VND/month/student.

The specific loan amount for each student will be regulated by the Social Policy Bank based on the tuition fees of each school and living expenses in each region but will not exceed the maximum loan amount of 4,000,000 VND/month/student.

What is the loan term for students in Vietnam?

According to Article 6 of Decision 157/2007/QD-TTg, the loan term for students is regulated as follows:

- The loan term is the period from the date the borrower starts receiving the loan to the date of full repayment (principal and interest) as recorded in the credit agreement. The loan term includes the disbursement period and the repayment period.

- The disbursement period is the time from the date the borrower receives the first loan to the date the student completes their course, including the period when the student is allowed by the school to take a temporary leave while retaining their academic results (if any).

The disbursement period is divided into disbursement terms regulated or agreed upon by the Social Policy Bank with the borrower.

- The repayment period is the time from the date the borrower makes the first repayment to the date of full repayment (principal and interest).

For training programs lasting no more than one year, the maximum repayment period is double the disbursement period. For other training programs, the maximum repayment period is equal to the disbursement period.

The repayment period is divided into repayment terms regulated by the Social Policy Bank.