Savings book mortgage loan - Convenient and safe form of loan

1. What is a savings book mortgage? Related regulations

Borrow savings book mortgage is a form of loan in which customers use existing savings books at the bank as collateral for the loan. This form helps you get the necessary capital quickly without having to withdraw your savings book before maturity, while still preserving the interest you will receive from savings deposits.

Characteristic

• Attractive loan limit: The loan limit is usually calculated based on a certain ratio compared to the amount deposited in the savings book, helping you access larger capital.
• Flexible loan methods: You can choose from many different types of loans, such as short-term, medium-term or long-term loans, depending on your needs and remaining time of the deposit. 
• Flexible debt repayment methods: You can choose a suitable repayment method, such as monthly installments, a large upfront payment or one-time repayment.
• Simple procedure: Compared to other forms of loans, savings book mortgage loan procedures are often simpler.
• Competitive interest rates: Many banks offer preferential loan interest rates for customers who mortgage their savings books.

Regulations on savings book mortgage loans:

• According to Civil Code 2015, borrowing from a bank with a savings book is one form of mortgage or mortgaging assets to secure the loan. Therefore, customers need to have documents proving ownership of savings books such as physical savings books, bank deposit notices.,…
• According to regulations in Point B Clause 4 Article 13 Circular 39, if the customer does not pay the monthly interest and principal on time, there will be an additional late payment fee. The fee depends on each bank's regulations and does not exceed 10%/year (calculated on the deferred interest balance corresponding to the deferred payment period).

2. Advantages and disadvantages of borrowing against savings books

Savings book mortgage has many advantages but also has certain limitations. Specifically: 

Advantage: 

• Simple and quick procedure: Compared to other forms of loans such as real estate mortgages, savings book mortgages often have simpler procedures and quick disbursement times, helping you access capital easily.
• Competitive interest rates: Normally, savings book mortgage interest rates are quite competitive (equal to deposit interest rates plus 1% - 3%/year), lower than other forms of loans. This helps you save a significant amount of money.
• Safety for borrowers: Because the collateral is your savings book, the risk to the borrower is very low. After paying off the debt, you will receive your savings book back.
• Preserve interest from savings deposits: During the loan process, you still receive interest from your savings, helping you maximize profits.
• Fast disbursement time: When you need urgent capital, this form of loan helps you solve the problem quickly, promptly meeting your financial needs.

Disadvantages

• Maximum loan amount limit: The maximum loan limit is usually equal to or lower than the value of your savings book. This may not meet the large loan needs of some people.
• Cannot withdraw money from savings book during loan period: During the loan process, you cannot withdraw money from your mortgaged savings book, which can be inconvenient if you need this money in an emergency.

3. Conditions, procedures and mortgage loan process for savings books

The following are the conditions, procedures and process for borrowing savings book mortgages for you to clearly understand, helping to prepare complete loan documents and quickly implement the loan package.

3.1. Conditions for mortgage loans using savings books

To get a savings book mortgage loan at a bank, you need to meet the following conditions:

• Collateral: The savings book is owned by you.
• Other conditions: In addition to a savings book, you may need to meet some other bank requirements such as age, stable income, and ability to repay debt.,... These conditions may change depending on time and loan product.

3.2. Loan procedures

To complete the loan procedure, you need to fully prepare the following documents:

• Loan application: This is a form provided by the bank, you need to fill in all the required information.
• Personal documents:
  • Identity card/Citizen identification card
  • Household registration or temporary residence book
• Documents proving income:
  • Salary statement
  • Payroll
  • Labor contract
• Documents related to collateral:
  • Original savings book (if physical)
  • Deposit voucher (if it is an online savings book)

3.3. Loan process at the bank

There are two types of savings book mortgage loans at banks:

Borrow directly from the bank

• Step 1: Go to the nearest bank branch for advice and instructions on applying.
• Step 2: Complete the application according to the bank's form.
• Step 3: The bank will conduct an appraisal of the documents and disburse funds if all conditions are met.

Online loan

• Step 1: Access the bank's application or website to apply for an online loan.
• Step 2: Fill in all personal information and loan-related information.
• Step 3: Upload necessary documents according to system requirements.
• Step 4: The bank will review the application and notify the results. If approved, the money will be disbursed to your account.

4. Savings book mortgage interest rate and how to calculate interest

Savings book mortgage interest rates are often quite competitive, only 1% - 3%/year higher than deposit interest rates, lower than many other forms of unsecured loans. However, specific interest rates may change depending on:

• Bank: Each bank has its own interest rate policy.
• Loan time: Interest rates can be adjusted according to the market.
• Loan amount: The larger the loan amount, the more flexible the interest rate can be adjusted.

How to calculate interest when borrowing a savings book mortgage: The formula for calculating monthly interest you give is quite simple as follows:

Monthly payment amount = Loan amount/Loan period + Loan amount * Monthly interest rate

For example:

Suppose you borrow 100 million VND with an interest rate of 6%/year, loan period of 12 months. How to calculate interest rate and monthly payment amount is as follows:

• Monthly interest rate: 6%/12 = 0.5%/month
• Interest payable monthly: 100.000.000 * 0.5% = 500,000 VND
• Total monthly payment: 100,000,000/12 + 500,000 = 8,333,333 + 500,000 = 8,833,333 VND.

5. Note when borrowing savings book mortgage

Before taking out a mortgage on your savings book, you need to pay attention to the following issues:

• Based on your needs, borrow the appropriate amount and loan term: Loan term directly affects the amount of interest payable. Choose a loan term that suits your financial ability. If you borrow short-term, you will pay less interest but the monthly repayment burden will be greater. On the contrary, if you borrow long-term, you will pay more interest but the monthly repayment burden will be lighter.
• Understand clearly the fees and interest rates payable: Interest is the most important cost when borrowing. Compare the interest rates of many banks to choose the loan package with the most preferential interest rate. In addition to interest, you also have to pay a number of other fees such as appraisal fees and insurance fees,... Please ask the bank clearly about these fees to get an overview of the costs to pay.
• Balance finances to ensure on-time payment: Create a detailed repayment plan to ensure that you can afford to pay on time.
• Choose a reputable lending bank: Before deciding to borrow, carefully research information about banks. Priority should be given to choosing a reputable lending bank with preferential interest rates, simple loan procedures, and quick disbursement time.

6. Savings book mortgage loan at SeABank - Ideal financial solution

SeABank is currently providing savings book mortgage loan service with many attractive incentives, promising to be the optimal choice for your financial needs.

• Simple and quick procedure: The loan process at SeABank is simplified, helping you save time and effort.
• Preferential interest rates: SeABank regularly offers loan packages with competitive interest rates, helping you save costs.
• Quick disbursement: After your application is approved, your loan will be disbursed quickly within 3 - 5 working days, promptly meeting your capital needs.
• Flexibility in choice: You can choose from many different loan packages with conditions and terms that suit your needs.
• Safe: The collateral is your own savings book, ensuring the borrower's rights.

With the above sharing, we hope to help you understand more about the form Savings book mortgage loan. This is a safe form of loan with preferential interest rates, helping you quickly resolve capital shortages while still preserving savings interest. For more detailed information about savings book mortgage loans, you can contact SeABank via Hotline 1900 555 587 or visit the website www.SeABank.com.vn.