Is 10-Day Overdue Debt Considered Bad Debt? How to Handle It to Protect Your Credit Score

Debts overdue 10 days are listed in the debt group that needs attention.

2. Consequences of being 10 days overdue

Although a loan payment delay of 10 days may seem minor, in reality, it can cause significant impacts on an individual's credit profile.

Firstly, the overdue loan will be subject to a late payment penalty interest rate. This penalty rate usually ranges from 150% to 200% of the in-term interest rate, depending on the specific regulations of each credit institution, which significantly increases the customer's financial costs.

Furthermore, information about the delayed payment will be recorded on the system of the National Credit Information Center of Vietnam (CIC), leading to a decline in the credit score. If the late payment situation occurs repeatedly or persists, the loan may be classified into the bad debt group. This negatively affects the ability to access credit in the future, including borrowing capital, issuing credit cards, or participating in installment transactions.

To minimize adverse effects, customers should:

• Make prompt payments of loans and accrued interest to limit rising costs.
• Proactively contact the credit institution to inform them of the situation and propose support options such as extending the repayment period in case of temporary difficulties.
• Keep all payment documents and receipts for comparison and verification when necessary.
• Regularly monitor personal credit information on CIC to ensure data is updated accurately and errors (if any) are promptly handled.

Overdue debt affects credit history

3. Bank's overdue debt handling process

3.1. Step 1: Contact customer and notify of debt

As soon as the loan becomes overdue, the bank will proactively notify debtors via channels such as SMS, email or direct calls.

This is an initial reminder to help customers promptly grasp information and promptly fulfill payment obligations, thereby limiting the occurrence of penalty interest and avoiding negative impacts on credit history.

3.2. Step 2: Restructure and adjust loan contracts according to actual situations

In case a customer encounters temporary financial difficulties, the bank may consider restructuring the repayment period, extending the loan contract or adjusting the repayment period.

This adjustment is made based on an assessment of the customer's actual ability to repay the debt and must ensure compliance with current regulations of the State Bank of Vietnam. The goal is to support customers through difficult times while minimizing the risk of bad debt for both parties.

You need to proactively contact the bank to handle overdue debt as soon as there is a notice.

3.3. Step 3: Handling collateral for mortgage loans

For loans with collateral such as real estate, means of transport, savings books or other valuable assets, in case the customer fails to fulfill the debt repayment obligation after many reminders, the bank has the right to proceed with the handling of the collateral in accordance with the agreement in the credit contract and guarantee contract.

Asset disposal is carried out to fully recover principal, interest and related costs, ensure legal compliance and minimize credit losses.

3.4. Step 4: Handling overdue debt with unsecured loans

For unsecured loans, in case the customer fails to repay the debt on time, the bank will transfer the file to the debt processing and collection department. The bank can send an official notice requesting payment or authorize a professional debt collection unit to take appropriate measures in accordance with the law.

Information on overdue debts will be reported to the Vietnam National Credit Information Center (CIC), thereby directly affecting the customer's credit history and future access to financial services.

3.5. Step 5: File a lawsuit

In case the customer still does not cooperate or continues to delay payment for a prolonged period of time, the bank will initiate a lawsuit at a competent court to request the application of compulsory measures to enforce the debt repayment obligation.

This is a last resort, which may involve the sale of assets, the freezing of bank accounts or the application of other debt collection measures as determined by the court. This is to ensure the legitimate rights of the credit institution and to comply with current legal regulations.

4. How to avoid overdue debt in the future

After experiencing late payments or overdue debt, borrowers should learn from their mistakes and proactively develop good financial management habits to prevent a recurrence. Here are some measures to help prevent overdue debt in the future:

• Take notes or set up automatic payment reminders: Use a digital calendar, banking app, or set up automatic payment reminders to make sure you always remember when your payment is due.
• Monthly loan reserve fund: Allocate a fixed amount of money each month from your income to cover debt obligations, ensuring flexibility even in the face of financial fluctuations.
• Prioritize on-time payments over other expenses: Make debt repayment your top financial obligation. Make payments before you spend on other personal expenses to avoid interest charges and negative impact on your credit history.
• Choose a loan term that suits your financial capacity: Before borrowing, customers need to carefully evaluate their financial capacity, income and living expenses. Choosing the appropriate term and loan amount within their ability to pay will help minimize the risk of financial imbalance and ensure timely debt repayment obligations.

You need to make a specific financial plan and schedule repayment to avoid overdue debt.

5. Frequently asked questions about overdue debt

1. How long does it take for a debt to become bad debt?

Normally, overdue debt of 10 days or more can start to be warned, and if over 30 days, the loan will be recorded as bad debt group 2 or higher on the CIC system.

2. How long is the overdue debt subject to penalty?

Immediately after the payment due date if not paid, the bank will charge late payment interest according to regulations, usually 150% - 200% higher than the normal interest rate.

3. Can I get a new loan if I have overdue debt?

Typically, when you have overdue debt, the bank will temporarily postpone considering new loan applications until you have fully paid the debt and the information is updated on the CIC.

The status of 10-day overdue debt is not yet considered serious bad debt, but if not handled soon, it can lead to penalty interest, reduced credit score, and restrictions on future borrowing capacity. Therefore, borrowers need to proactively pay on time, monitor the status of the loan, and contact the bank immediately when facing difficulties.

If you are in need of safe and transparent financial solutions, please refer to the loan packages at SeABank. SeABank offers flexible loan packages, meeting the diverse financial needs of individuals and businesses with the following benefits:

• Simple procedure
• Competitive interest rates
• Flexible loan terms up to 25 years
• High loan ratio up to 90% of collateral value.

In addition, SeABankConsider supporting customers with legitimate loan needs, depending on their actual financial situation. 

Choosing SeABank helps you access transparent, safe and suitable loan solutions for your personal financial needs!If youIf you want to learn more about SeABank's loan products, you can contact the nearest transaction point or call Hotline 1900 555 587 or visit the website www.seabank.com.vn for more details.