The impact of the Covid-19 pandemic reduced the income of many workers and even lost their jobs. This indirectly affects borrowers who buy auto installment loans. Many people cannot afford to pay interest and principal each month. So the debt has turned to bad debt, forcing the bank to recover collaterals.
At the end of 2019, Mr. Nguyen Van Tuan (Dong Anh, Hanoi) bought a Hyundai i10 car in the form of installments for more than 600 million VND. To borrow, Tuan had to sign a credit contract with a bank and pay a full 10 million dong both principal and interest each month.
However, since the outbreak of Covid-19, Mr. Tuan's income declined, the amount of VND 10 million per month to pay the bank became a burden to him.
“From March until now, I can no longer afford to repay the bank. So, at the end of June, the bank had frozen off the collateral that my Hyundai i10 car was mortgaged, ”Tuan said.
A bank employee said that after the State Bank of Vietnam (SBV) issued Directive 02, supporting customers affected by the Covid-19 pandemic, some banks started to implement debt restructuring solutions. and keep the debt group for customers.
Accordingly, customers will be exempted, reduced interest on old loans, keeping debt groups for customers. In order to enjoy these incentives, customers must proactively submit an application to the bank for debt rescheduling and show how the income source has decreased. On that basis, the bank will evaluate and review each specific case.
However, according to many customers, they have applied according to the instructions of the bank staff, but so far no answers.
Ms. Hoang Thi Nga, a small business owner in Hanoi, said that last year, the couple bought truck installments to transport fruits and food from Hai Duong province to Hanoi for sale. The interest from the trade is used to repay the debt of 400 million dongs borrowed from the bank. In the first 3 months of this year, the business stalled, she tried to have enough money to eat, so she could not afford to pay the bank. In the last 2 months, the trade has improved a bit, but still not enough 12 million for the bank.
“I contacted the bank to make an application, hoping that the bank will extend the repayment period, reduce interest rates somewhat, but until now nearly 2 months have not received an answer from the bank. The risk of debt bondage is very high, ”Nga laments.
It can be seen that the time before the liquidation of assets of banks was mostly real estate, machinery, in the last 2 months, banks have been focusing on liquidating cars.
For example, VIB is liquidating 59 cars of all types, not only small cars like before but also passenger cars and trucks, such as Samco Limousine passenger car being listed for VND 890 million, 16-seat Ford Transit. is listed for 434 million.
Since July, TPBank has continuously announced the liquidation of automobile guarantee assets of businesses and individuals with prices starting from several hundred million to over 1 billion dongs/unit.
Nguyen Hoai Nam, an employee of a joint-stock commercial bank, has many credit agreements to buy car installments, said that recently, the number of cars with debt recovery is increasing due to the inability to pay. At this bank, the number of customers unable to pay their debts, and having their cars taken over for two months is 1.5 times higher than before. The most are trucks and passenger cars.
"An outbreak of disease caused economic activities to stop and decline, leading to difficulties in the transport business, no source of debt repayment for the bank. Many customers have accepted the bank to collect cars." , Mr. Nam said
In addition, many families who previously purchased car installments to serve their families and businesses also faced difficulties due to declining income, failure to pay their debts on time, and also be repaid by the bank.
The leader of a commercial bank said that the bank has restructured debts for some customers to buy cars in the direction of extending or reducing the amount to be paid monthly, extending the loan period to match. with customers' current income, to help them through a difficult time.
In cases where it is considered insolvent and risk of capital loss, the bank will recover assets and liquidate them to settle debts. However, many cases of customers do not cooperate or do not work. Only after the expiry of the travel certificate or the deadline for registration can the bank contact to apply for the paper, then the bank can handle the debt.
Although the increase in bad debts from collaterals is an automobile, the director of the debt handling division at a large bank said that cars are a group of assets with very good liquidity and are easily handled by banks when seized.
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