Commercial banks are competing fiercely with each other to disburse car loans. Both lending interest rates and car prices are at a record low.
The lending interest rates offered by banks are very reasonable. ShinhanBank offers three options with interest rates of 7.5 percent for the first 12 months, 8 percent for the first 24 months and 8.6 percent for the first 36 months.
After enjoying the preferential rate periods, the interest rate is 9.4 percent on outstanding loans.
Woori Bank, another foreign bank, is providing loans with the interest rate of 7 percent per annum, applied to the first 12 months. Hong Leong Bank is lending at 7.55 percent per annum for the first 12 months and 8.55 percent for the first 24 months. Meanwhile, Standard Chartered is offering loans with the interest rate of 7.25 percent for the first 12 months, 8.49 percent for the first 24 months and 8.75 percent for the first 36 months.
Among Vietnamese banks, TP Bank is providing loans to fund car purchases with the interest rate of 7.5 percent per annum which may be fixed for up to 24 months, depending on clients’ demands. The loans are up to 75 percent of the value of cars.
VietinBank, one of the ‘big four banks’, is lending at 7.7 percent per annum for the first 12 months. Saigon-Hanoi Bank applies the interest rate of 6.8 percent for the first six months.
Analysts say that the lending interest rate, at 7.5-8.5 percent on average, is very attractive at this moment.
Most commercial banks are offering loans to fund car purchases by installment. The preferential interest rates are between 7 percent and 9 percent, depending on buyers’ income and value of cars. After the preferential period, the interest rates will float, 9.4-13 percent.
Clients just need to prove they have jobs and stable monthly income of VND10 million or higher. The disbursement will be made after 6-48 hours after the application.
The lending interest rates in preferential period are nearly equal to the 6-36 month term deposit interest rates of many commercial banks.
Analysts said banks have to ease lending interest rates and lure car buyers because capital is plentiful, while demand from businesses is low because of Covid-19.
They said that it is the right time to buy cars as manufacturers are running attractive sale promotion programs. Besides, car buyers from now to the end of the year can enjoy a 50 percent reduction in vehicle registration tax.
With the tax reduction and preferences offered by manufacturers, people can save up to hundreds of million dong if they buy cars now.
This article was originally published in VNA