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Vietnam: Local banks slash interest rates to boost home, car loans
Since credit has been growing slowly because of low demand from businesses, commercial banks have increased the number of consumer loans to ‘liberate’ their plentiful capital.
Some commercial banks, especially foreign banks, are offering car loans at interest rates below 10 percent.
Woori Bank is lending to fund car purchases at the interest rate of 7 percent per annum, applied to the first 12 months.
HongLeong Bank quotes an interest rate of 7.55 percent per annum for the first 12 months and 8.55 percent for 24 months, Standard Chartered 7.25 percent and 8.49 percent, and Shinhan Bank 7.69 percent and 8.6 percent, respectively.
VietinBank, one of the ‘big four’ banks, is lending at 7.7 percent, and Saigon-Hanoi is offering car loans at 6.8 percent for the first six months. At Maritime Bank, clients can borrow money to buy cars at 6.99 percent.
The other banks offering loans at interest rates below 10 percent include BIDV (8 percent), Techcombank (8.19 percent), Vietcombank (8.4 percent), and Military Bank (8.5 percent).
Home loans are also very attractive. The lowest interest rates are offered by foreign banks. Standard Chartered, for example, provides loans at the preferential interest rate of 6.49 percent, HongLeong Bank 6.75 percent, Shinhan Bank 6.9 percent and Woori Bank 7 percent.
As for Vietnamese banks, the interest rates are between 6.59 percent (Maritime Bank) and 7.8 percent (BIDV).
AnBinh Bank has slashed the interest rates of consumer loans for the fourth time, applying to loans commencing from September with the lowest interest rate at 5.9 percent per annum.
Analysts commented that the interest rates of car and home loans have become nearly equal to the 6-12 month term deposit interest rates. Banks are also ‘indulging’ clients by providing loans worth up to 70 percent of the value of houses and cars.
They said car and house buyers now can enjoy big benefits as car and house supply is abundant, and prices are reasonable, while banks are ready to disburse money.
Home and car loans account for the largest proportion of consumer loans. Home loans are estimated to account for 50 percent, anf car loans 10 percent.
Finance reports of some profitable banks show that their profits were caused by the increase in consumer loans.
Techcombank said real estate credit and personal loans are the focus of the bank. The loans provided to fund house purchases account for 44 percent of total retail outstanding loans.
Can Van Luc, a finance expert, commented that at this moment, when the economy is struggling to recover from the Covid-19 crisis, consumer loans will help stimulate general demand, thus supporting economic growth.
Tran Thuy
Source: https://vietnamnet.vn/en/business/banks-slash-interest-rates-to-boost-home-car-loans-676019.html