Salary-based unsecured loan: 5 important information need to understand

1. What is a salary-based unsecured loan?

Unsecured loan based on salary is a form of loan that does not require collateral, in which a bank or financial institution Loan approval will be based on the customer's monthly salary income. The loan process is based on proof of income documents, such as salary slips, bank account statements or pay stubs, without the need for collateral.

There are two popular forms of unsecured salary loans that customers can choose from, each form has its own requirements and characteristics. 

• Loan based on salary transfer: This type of loan is based on bank account statements for the most recent 3-6 months to determine the customer's income. The bank or financial institution will consider salary income and related financial transactions to decide on the loan. Regular salary transfers help Quarter Customers can easily prove their ability to repay debt and increase their chances of being approved for a loan.

Loan based on cash salary: This type of loan is based on the customer's cash payroll or salary slip, and may require a labor contract to confirm work. When choosing a cash salary loan, Quarter Customers will need to provide documents proving income without a bank account statement. This form is suitable for those who do not have a bank account or receive salary in cash

2. Advantages & disadvantages of unsecured salary loans

Salary-based unsecured loans bring many benefits, but there are also factors that need to be kept in mind. Customers need to clearly understand both the advantages and disadvantages of this type of loan to make a wise decision. Below is a summary of the advantages and disadvantages of unsecured salary loans.

So, Unsecured loan based on salary brings many benefits to customers such as simple loan process, no collateral required and quick disbursement, helping customers easily access capital when needed. This is the ideal choice when customers need quick capital, especially when the loan amount is not too large and there is no collateral.

3. Conditions and procedures for unsecured salary loans

To get an unsecured salary loan, customers need to meet the following specific conditions and procedures:

Condition:

• Be an individual of working age according to Vietnamese law.
• Age group: from 20 to 60 years old (however may vary depending on each bank).
• Have a stable income from salary or labor contract, ensuring the ability to repay debt throughout the loan term.
• Required to have good credit history, no bad debt.

Procedure:

• Unsecured loan application, provided according to the form of the bank or credit institution.
• ID card/CCCD (notarized copy) to verify identity.
• Latest 3-6 months salary slip or labor contract to prove stable income.
• Other documents related to income and personal financial status, such as bank account statements or pay stubs, to confirm financial capacity and credit history.

Note: Conditions for unsecured salary loans may vary depending on each specific bank, credit institution or financial institution. Therefore, customers need to carefully understand the requirements in each location to ensure the loan process goes smoothly.

4. Salary-based unsecured loan process

The process of unsecured salary loans is usually simple and quick, helping customers easily access capital. Below are the basic steps in the loan process:

Step 1: Prepare and submit loan documents
client Need to prepare documents proving income, including salary slips, bank account statements, labor contracts, and related documents. Then, send complete documents to the bank or financial institution to start the loan process.

Step 2: Review loan applications
The bank or financial institution will review documents and evaluate the customer's financial ability and credit history to verify debt repayment ability. This process usually happens quickly.

Step 3: Sign the loan contract
When the loan application is approved, the customer will sign an unsecured loan contract with the bank or credit institution, and confirm the terms, interest rate and loan term.

Step 4: Loan disbursement
The loan will be disbursed by transfer to the customer's bank account or in cash, depending on the agreement of both parties.

5. Unsecured loan limit based on salary and factors affecting the limit

Unsecured loan limits at banks are often determined based on the customer's actual income, with the loan amount usually being 5 to 10 times the monthly salary. However, each bank will have its own regulations on loan limits, depending on the policies and financial capacity of each bank.

Unsecured loan limit based on salary at SeABank

At SeABank, customers can get unsecured loans with Maximum limit is up to 6 times monthly salary, and Total loan limit can be up to 300 million VND. This loan level helps customers have the opportunity to access flexible and timely financial resources to meet their personal needs No need to mortgage property. With competitive interest rates and simple loan procedures, this is a convenient financial solution for customers.

Factors affecting the salary-based unsecured loan limit:

• Monthly income: A stable and high income level will help customers be approved for loans with higher limits, because the bank believes in their ability to repay debt on time. On the contrary, low or unstable income can cause the loan limit to be reduced, because the bank is concerned about the customer's ability to repay the loan.
• Credit history: The customer's credit history is evaluated through the credit score of the National Credit Information Center (CIC). If the credit score is above 600, customers will have the opportunity to borrow with a higher limit, because the bank believes in the ability to repay debt on time. On the contrary, if your credit score is low or you have bad debt, your loan limit will be reduced, and banks can demand higher interest rates to compensate for the risk.
• Working time and work experience: Customers with long and stable working time will be highly appreciated, increase their ability to borrow capital and can be granted a higher loan limit. 
• Bank policy: Each bank has its own regulations on unsecured loan limits, depending on credit policies and incentives from time to time. Loan policies can change according to the bank's financial needs and goals, so loan limits will also vary between banks.
• Ability to repay debt: Banks evaluate customers' ability to repay debt through debt-to-income ratio (DTI). If DTI is low, meaning the customer has little debt compared to income, the bank will assess good debt repayment ability and may grant a higher loan limit. On the contrary, if the DTI is high, the bank will be concerned about unstable solvency, so the loan limit may be reduced.
• Type of work: Stable, long-term jobs and stable income from large businesses will often qualify for loans with higher limits.

6. How to calculate unsecured loan interest rate based on salary

Current salary-based unsecured loan interest rates range from 12.9% to 18%/year (Information updated from 26/11/2024, interest rates may vary depending on each bank's policy).

Method 1: Interest rate on principal balance 

Monthly payment amount = Fixed monthly principal amount + Fixed monthly interest.

For example: You borrow 50 million VND with an interest rate of 15%/year for 12 months.

• Monthly interest = 50 million x 15% / 12 months = 625,000 VND.
• Monthly payment amount = Fixed principal amount (50 million / 12 months = 4,166,667 VND) + Interest (625,000 VND) = 4,791,667 VND.

Per month, Quarter guest will pay 4,791,667 VND, unchanged throughout the loan term.

Method 2: Interest rate on outstanding debt gradually decreases

In this method, interest will be calculated on the remaining debt balance after each payment period, helping to reduce the amount of interest paid over time.

• Principal amount to be paid each period = Initial loan amount / number of repayment periods.
• First period interest = Loan amount x Fixed monthly interest rate.
• Interest in the following periods = Remaining principal x Fixed monthly interest rate.
• Amount to be paid each period = Principal amount to be paid each period + Interest amount to be paid for the corresponding period.

For example: You borrow 50 million VND with an interest rate of 15%/year for 12 months.

• Principal amount payable each period = 50 million / 12 months = 4,166,667 VND.

First period:

• First term interest = 50 million x 15% / 12 months = 625,000 VND.
• Amount to be paid in the first period = 4,166,667 VND (principal) + 625,000 VND (interest) = 4,791,667 VND.

Next period:

• Remaining debt balance = 50 million - 4,166,667 VND = 45,833,333 VND.
• Interest period 2 = 45,833,333 x 15% / 12 months = 573,417 VND.
• Amount to be paid in period 2 = 4,166,667 (principal) + 573,417 (interest) = 4,740,083 VND.

Each period, the interest amount will gradually decrease as the outstanding debt decreases.

7. Some notes when borrowing unsecured salary

When taking out a salary-based unsecured loan, understanding important notes will help customers easily access the loan effectively and safely. Below are some factors customers need to keep in mind to ensure their rights and avoid risks when borrowing unsecured loans.

• Choose a reputable bank: You should choose a reputable bank with transparency in all transactions and clear contracts, ensuring customers' rights.
• Good credit history: Banks only approve loans for customers with good credit history, no bad debt or overdue debt.
• Prepare complete documents: Make sure to provide all necessary documents such as salary slips, bank account statements, labor contracts and documents proving income.
• Prove clear income: Provide a bank statement so the bank can easily verify your source of income.
• Calculate your ability to borrow and repay debt: Carefully evaluate your financial capacity to determine a reasonable loan amount and ensure the ability to repay on time.
• Understand clearly the contract terms: Read the loan contract carefully, pay attention to the terms, and ask for explanations if there are any unclear points before signing.

8. SeABank - Salary-based unsecured loan bank with low interest rates, simple procedures, quick disbursement

SeABank is one of the reputable banks and trusted by many customers in Vietnam, outstanding with diverse financial services, including unsecured loans based on salary with reasonable interest rates and simple procedures.

SeABank provides unsecured salary loan packages with competitive interest rates, no collateral required, suitable for many customers, especially those with stable income. Loan packages include loans for teachers, civil servants, public employees, unsecured overdraft loans and installment loans, providing flexibility and convenience.

Thus, when taking a salary-based unsecured loan at SeABank, customers will enjoy many practical benefits:

• Competitive interest rates: SeABank offers extremely competitive salary-based unsecured loan interest rates, helping customers minimize loan costs and optimize personal finances throughout the debt repayment process.
• Simple procedure: The loan process at SeABank is simplified, with few documents and easy procedures, helping customers quickly complete the application without spending too much time.
• Quick disbursement: SeABank commits to transferring loans to customer accounts in a short time, helping to promptly meet urgent financial needs without disrupting customers' financial plans.

Salary-based unsecured loans are a convenient financial solution that helps customers quickly access capital without collateral. However, to ensure the loan process goes smoothly, customers need to master important information such as loan conditions, interest rates, loan limits and factors affecting borrowing ability.

If customers need support, please contact SeABank via Hotline 1900 555 587 or visit the website www.seabank.com.vn for detailed answers.