OVERDUE INTEREST RATES OF REFINANCED LOANS EQUAL TO 150% OF THE INTEREST RATE OF SUCH LOANS

According to Circular No. 24/2019/TT-NHNN issued on November 28, 2019 and coming into effect on January 18, 2020:

• Accordingly, interest rates on refinance or extension of refinance in the form of on-lending on credit-related documents indicates refinancing interest rates that are disclosed by SBV from time to time. The rate of overdue interest on principal of a refinanced loan can reach as much as 150% of the interest rate currently applied to that refinanced loan.
• Period of refinancing in the form of on-lending on credit-related documents shall be considered, decided by SBV, and shall be less than 12 months. Grace period of each refinance shall not exceed the time limit for each refinanced loan; the period of refinance and the grace period of refinance shall not be over 12 months in total.
• SBV shall decide the limits on refinances or extended refinances taken out in the form of on-lending on credit-related documents on the basis of payment capabilities of credit institutions, but shall not exceed 60% of total outstanding principal balances of loans mentioned in checklists of credit-related documents.

Best regards,