If you receive a notice from the bank that your credit status is currently classified as bad debt. Group of debt below the standard, but you do not understand subprime debt what. This affects a lot to you, which later we will spend a lot of money and time to fix. For that reason, through this article, let's go with Bankcuatoi to learn the knowledge about bad debt when borrowing money that you need to know.
What is subprime debt?
To generalize subprime debt what is in the most clear and understandable way. I will synthesize knowledge about what is CIC and regulations on bad debt groups. From there, readers will easily understand the information to keep in mind about subprime debt.
What is CIC Information?
CIC or you can call it the national credit center. This is an organization operated and managed by the state bank. Responsible for storing, collecting and sharing information about credit history of individuals and businesses with banks and credit institutions. In other words, when you go for a bank loan, your entire loan process will be sent and saved here. The next time you apply for a loan, the bank will check your credit history with your ID card on CIC. From there, capture the good or bad credit history of a customer.
Current bad debt groups
Currently, CIC has classified 5 different bad debt groups. When customers have overdue loans depending on the specified number of days, they will be classified into the corresponding bad debt group.
Group 1: bad debt: Eligible debt
- Debts that are overdue from 1 to 10 days and can be recovered with capital and interest.
- If you fall into this bad debt group, you will be charged an additional penalty fee equal to 150% of the original interest rate.
Bad debt group 2: Debt notes
- The package is overdue from 10 to 30 days.
- Loan restructuring repayment period
Bad debt group 3: Subprime debt
- Late payment time from 30 to 90 days will be classified as bad debt.
- Debts restructured for the first time but overdue for 30 days
- Customers are entitled to a reduction or exemption of interest due to their inability to pay for the loan.
Bad debt group 4: Debts suspected of losing capital
- The overdue period of the loan is from 90 to 180 days.
- The loan is rescheduled for the first time, but it is overdue from 30 to 90 days.
- Debts restructured the 2nd repayment period.
Bad debt group 5: Irrecoverable debts
- Debts that are overdue for 180 days or more.
- Debts that are 90 days past due are restructured for the first time.
- Debts restructured repayment period for the 2nd time.
- Debts restructured for the 3rd time, even if not overdue, are still classified in this group.
Related: How long does it take for bad debts of group 5 to be written off
Question: Subprime debt what?
Answer: Sub-standard debt, also known as group 3 bad debt. There is a delay of 30-90 days or the first time restructured loan is overdue for 30 days.
Is there a problem with subprime debt?
When a customer has a substandard debt, it is already in the group of quite heavy bad debt. From the group of 3 bad debts, 3 customers will be imposed with very heavy punishment terms for violating. In addition to interest and penalty fees calculated at 150%, they will be subject to a probationary period of 5 years.
That is, even if you have paid the full amount owed to the bank. But credit history is still kept on CIC for 5 years. After 5 years, it will be deleted and during this time, you will not be able to apply for a loan or open a credit card anywhere.
This greatly affects people's ability to borrow money later. Your credit score will also drop, this is a feature that a bank or lending institution uses to evaluate and approve your loan.
Is it possible to get a loan from a subprime bank?
Substandard debt (Debt group 3) will not be offered to participate in loan products at banks and credit institutions. When customers with bad debt apply for a loan, the bank will check the credit history on CIC. If you find that bad debt has not been paid or is on probation, it is 5 years.
To ensure the disbursed capital, no bank accepts loan requests. Even if you have bad debt, people who share the same household registration with you when applying for a loan are not allowed. Because this is the maximum risk avoidance measure of the bank. Even with collateral, it is not possible to get a loan.
How to write off subprime debt?
To write off subprime debt, the only way is to calculate the amount owed. Go to the bank and ask the clerk to check for you. We then proceed to pay the remaining balance immediately. But please note that, once the money has been paid, the bad debt will not be erased immediately.
Because it has been saved on CIC's system and must pass the test time in accordance with regulations. However, if your debt is less than 10 million dong, the bad debt history will be deleted as soon as the interest and principal amount has been paid to the bank.
Conclusion
Thus, readers have understood subprime debt what? Pay attention and pay in full to avoid troubles related to bad debt. If you have any other questions, please comment below.
If you are not sure if you are in the category of subprime debt. Please click on the article on how to check bad debt by ID card to know which debt group you are in.
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