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Black credit flaring up with demand for paying debts before maturation
As bank interest rates have been on the decrease, many people have decided to borrow money from unofficial sources to pay bank debts before their loans reach maturation, paving the way for the rise of ‘black credit.’
Over the last month, the ceiling lending interest rate has fallen from 21% per annum to 15% per annum, while the average lending interest rate offered by commercial banks has dropped to 11% per annum. This has made those who had previously borrowed money at high interest rates suffer. Therefore, they have decided to borrow money from unofficial sources to pay bank debts before maturation, and then receive new loans from banks at lower interest rates.
In fact, the interest rates from the unofficial sources prove to be very high. However, the borrowers have said that they only borrow for a few days, and then pay back the money as soon as they can get new loans from banks.
A client, who borrowed VND 100 million from bank at 21% per annum (1.75% per month) for six months, after the loan has matured for 4 months, will have to pay VND 7 million in interest to the bank. Meanwhile, if he borrows VND 100 million from ‘black credit’ sources, for seven days at 12% per month, he will have to pay only VND 3.5 million for the loan, or just 50% of the interest he has to pay to the bank.
Meanwhile, those who borrowed money from bank at 18% per annum think that they will have to pay interest of VND 27 million for a 6-month VND 300 million loan. Meanwhile, if they borrow VND 300 million from unofficial sources to pay the bank loan before maturation, they will have to pay only VND 12 million, or VND 15 million lower.
The high demand for borrowing money to pay bank debts before the maturation has created favorable conditions for black credit rise up. Many websites have appeared, offering to lend money to help clients pay bank debts before maturation.
When Nguoi lao dong reporters contacted the people from the advertisements, Thuan, one of the lenders, said that she will lend at 0.5-0.7% per day. Meanwhile, Cuong, another lender, said that the conditions prove to be very simple: if borrowing VND 300 million, the borrowers just need to mortgage the documents showing their house or car ownership.
The reporters related that after they expressed willingness to borrow money to pay debts to a Hanoi-based bank, the staff of Cat Hanh Company Ltd, immediately contacted the bank, and then told the reporters that they can lend VND 200 million for 10 days, and the fee is 3%.
When the reporters expressed concern that the bank may not give new loans, the staff said that they have close relations with the bank, and they can be sure that the bank will provide new loans.
NLD, Vietnamnet
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