Overview of home loan process for personal customer at CT Group
The home loan process at CT Group necessitates collaboration among several departments, including ASD, accounting, CRM, legislation, IT, and especially the personal finance department, which plays a vital role in ensuring a smooth and efficient loan procedure.
CT Group offers loans with a maximum term of 10 years (120 months), requiring monthly repayments of both principal and interest The initial interest rate is set at 10% for the first year, with adjustments every two years based on the 12-month savings deposit rate at Vietcombank plus a 5.5% margin Loan rates vary by product, with some allowing financing up to 70% of the apartment's value Customers are encouraged to contribute at least 30% of their own capital, with the remainder available for borrowing from the investor.
To qualify for a loan, customers must be aged between 20 and 50 and have a stable monthly income, verified through a partner bank of CT Group Applicants are required to demonstrate that they have no existing loans and are not classified as bad debt in group 2 or higher within the last 12 months If a customer has a history of bad debt but has since established a solid repayment record, the Personal Finance Office (PFO) may still consider lending based on their credit rating The loan amount is assessed by the Personal Finance Department according to the customer's repayment capacity and subsequently reported to the executive board for approval, utilizing the Debt To Income (DTI) evaluation method.
Table 2 1 Evaluation approach of home loan in CT Group
No Income (million VND) Monthly payment
At CT Group, the home loan process is streamlined into 11 clear steps, as depicted in the accompanying figure The reception and approval of customer loan applications are efficiently managed through the use of advanced loan acceptance and approval software provided by the Investor.
Figure 2 1 Credit extension process for home loans at CT Group
Receiving loan applications from customers.
Post-disbursement management (Periodic collection of debt according to the loan contract, Handling overdue debt, problem debt, bad debt, )
Liquidate loan contracts and notify customers.
Steps of credit appraisal of home loan for personal customer at CT Group
Step 1: Legal assessment
After collaborating with the ASD and CRM departments to gather information on home loan customers, the Finance department will compile customer records and familiarize them with the company's loan regulations Once these steps are completed, the loan appraisal process begins under the oversight of the personal finance department.
The initial step in the loan qualification process involves the thorough inspection of the potential customer's legal documents by a Personal Customer Officer (PFO) This assessment ensures compliance with CT Group's lending standards and regulations Required documents include an Identification card or Passport, Household Registration Book, Confirmation of Temporary Residence (if applicable), and a Certificate of Marital Status or Marriage Certificate Additional legal papers may be requested as needed for appraisal purposes Following this, the PFO will gather further information regarding the customer's identity, income, and any existing loan repayment history with credit institutions, while also guiding customers on the specific documentation needed to meet the requirements.
Step 2: Appraising creditworthiness
After gathering the required documents, the next step involves verifying and validating the provided information to pinpoint relevant data A crucial aspect of this process is conducting a creditworthiness analysis, where the PFO assesses the reliability of the customer This evaluation focuses on the customer's past credit relationships with CT Group, partner banks, and other financial institutions.
If a borrower has previously engaged in transactions with CT Group, their details will be stored in the Company’s Core Financing System, allowing for easy access Utilizing this data, the PFO will conduct a thorough investigation into the customer's transaction history, assess their creditworthiness, evaluate their loan details, and analyze their payment methods along with the frequency of any late payments.
For borrowers with no recorded transactions with the company but who have existing credit relationships with other financial institutions, information will be sourced from the Credit Information Center (CIC), a leading provider of credit scores and reports This system aids the company in assessing clients' credit ratings and histories, and it cross-references this data with the information provided by the consumers Accessing accurate loan history information from the past 12 months is essential for effective credit evaluation, as mandated by CT Group's regulations.
Step 3: Appraising loan application
Following the approval of the customer's credibility assessment, the next step involves a thorough investigation of the customer's application This process is essential to adhere to the State Bank of Vietnam Law and CT Group’s lending standards Key factors to consider include the loan's purpose, size, type of collateral, loan term, sales contract, quotation contract, and invoices.
The loan purpose must be practical, consistent with the regulations and financial conditions of the customer and the business in particular and the economy in general.
Step 4: Assessment of proof of income and repayment capability
To ensure that customers have valid proof of income and repayment capability, the PFO must thoroughly analyze various factors This includes evaluating the viability of the business project, assessing profits and operating revenue, and examining additional capital sources for repayment Furthermore, both internal and external factors influencing the business must be considered, along with calculating the debt coverage ratio (PNI) to clearly demonstrate the customer's ability or inability to repay.
The primary factor the company must evaluate is the origin of the customer's personal income The PFO will thoroughly examine and analyze various documents associated with these income sources, such as lease agreements, car rental contracts, land use rights certificates, and property ownership certificates.
The PFO was responsible for assessing the rationality and suitability of reported income levels through a pricing survey of related income sources Furthermore, the PFO anticipated all expenses that the customer's family would incur during the loan period, including living costs, credit card interest repayments, and loan debt fees The net income available for loan repayment was calculated by deducting these expenses from the reported income, serving as a crucial factor in evaluating the credit rating and making the final lending decision.
Step 5: Preparing credit appraisal report
After reviewing all criteria, the PFO determines the borrower's credit rating by inputting the collected data into CT Group's Credit Rating System This process culminates in the generation of an appraisal report, which is essential and mandatory for the entire credit appraisal process.
The report is structured into six key sections: first, it outlines essential loan details, including customer information, lending method, loan amount, and purpose Next, it provides in-depth customer background, family circumstances, and credit rating The third section discusses the loan method and repayment sources Additionally, it emphasizes the importance of risk analysis and mitigation strategies based on the assessment of income proof and repayment ability Finally, the report concludes with PFO’s comments and suggestions, summarizing the initial findings.
This report aims to consolidate essential information regarding clients and their loans, enabling the PFO to offer insights and recommendations By doing so, it facilitates quicker decision-making for the Appraisal Office and Manager, ultimately enhancing the efficiency of the credit extension process.
Discussion of credit appraisal of home loan for personal customer at CT Group
Strengths
CT Group has implemented a streamlined and effective credit appraisal process that prioritizes clarity and confidentiality This efficient system not only saves time for both customers and the company but also facilitates quicker progression to subsequent steps, ensuring timely disbursement and enhancing overall customer experience.
CT Group's home loan process is modernized through digital access and analysis, ensuring a quick, logical, and secure experience The entire procedure is uniformly executed and recorded within the company's 4.0 system, known as ERP and SurePortal, allowing the PFO to conduct due diligence tasks efficiently and effortlessly.
The close collaboration among departments greatly enhances efficiency and unity within the company In the final stage of the appraisal process, the decisions made by managers reflect a well-defined distribution of responsibilities Notably, I value the credit appraisal report in home loan assessments, which includes PFO's recommendations This report incorporates diverse perspectives, ensuring a comprehensive approach that significantly improves the efficiency of the approval process.
Limitations and explanations
CT Group has effectively integrated technology and digitized data into its home loan processes and overall financial operations However, the adoption of new technology has introduced challenges, including risks of information leakage, system failures, data scarcity, and network security threats These issues complicate the efforts of the PFO in data investigation and information retrieval.
The PFO faces significant challenges in managing loan applications due to limited human resources, which complicates the evaluation process This situation may lead to an insufficiently thorough appraisal, risking the omission of critical information Additionally, the PFO's complete responsibility for the evaluation can inadvertently give rise to ethical concerns during the process.
THE OUTLOOK, ORIENTED DEVELOPMENT AND
The outlook of CT Group Vietnam
CT Group is a multi-industry firm where real estate plays a crucial role in its development; however, the company also diversifies into various sectors, including banking This broad approach to capital mobilization ensures that funding sources are varied, reducing risks associated with cash flow dependency on a single sector Consequently, CT Group is less vulnerable to funding shortages during financing processes and utilizes home loans for purposes beyond commercial needs.
Home loans significantly enhance customer relations for real estate companies, serving as a key differentiator in a competitive market This essential service benefits both clients and the firm, providing strategic leverage to drive business growth By offering home loans, organizations can attract a larger client base, meet customer needs effectively, and ultimately increase profitability.
CT Group has a significant opportunity to penetrate the financial sector by starting with basic financial services This initial step will allow the organization to build experience and gradually expand into more complex areas Establishing a strong foundation in finance will enable businesses to broaden their horizons, scale operations, and evolve in line with the advancements of the 4.0 technological revolution.
CT Group, having only recently ventured into the finance sector, faces significant challenges in home loans and the broader financial industry due to a lack of experience and expertise To address these professional and administrative hurdles, the company must implement strategic adjustments and enhancements moving forward.
The Covid-19 pandemic has significantly impacted CT Group over the past two years, affecting human resources and project progress This is evident in the dramatic reduction of the company's net income, highlighting the importance of addressing post-pandemic recovery challenges As the organization works to rebuild and thrive, it will face various hurdles that require dedicated effort Looking ahead, CT Group must develop a robust strategy to effectively navigate similar unforeseen changes in the future.
Orientation for development of CT Group
CT Group recently celebrated its 30th anniversary and was honored with the first-class Labor Medal by the Vice President on June 29, 2022 This recognition serves not only as a reward but also as a motivation for the organization to pursue innovative initiatives and strategies for future growth Looking ahead, CT Group aims to align with the technological advancements of the 4.0 revolution, focusing on key sectors such as finance and retail, while also expanding into high-tech industries, including medical and cell technology, through the establishment of VIETNAM GENE & CELL TECHNOLOGY JSC (VGCT).
CT Group should consider establishing a home loan service in collaboration with partner banks to enhance efficiency and resource management This strategy not only strengthens the relationship between CT Group and financial institutions but also leverages the banks' expertise in lending, thereby minimizing risks and potential issues.
The company must balance its efforts between researching and developing new industries and strategies while also focusing on current operations This includes integrating commercial businesses and enhancing retail operations to create a sustainable framework for long-term growth Additionally, it is essential to preserve and extend the existing domestic industry while carefully expanding into international markets.
3.3 Recommendations for improvement of home loan credit appraisal of personal customers at CT Group
Human resources play a vital role in administration, particularly in finance and credit appraisal processes CT Group has leveraged modern technology and digitized information to enhance product quality and customer service However, personal interactions between the PFO and clients remain essential The appraisal process is thoroughly conducted by the PFO, highlighting the importance of human resources within the organization In today's tech-driven landscape, it is crucial for employees to possess adaptability, analytical skills, and proficiency in foreign languages and informatics Given that CT Group is relatively new to the financial sector, it must prioritize recruitment and training to build a skilled workforce.
To enhance the recruitment process, it is essential for HR to maintain simplicity and clarity, while also ensuring prompt and enthusiastic communication with candidates to create a welcoming environment Additionally, implementing regular professional training sessions and providing ongoing support for PFOs is crucial for helping them adapt to their roles and technology By equipping employees with the necessary skills, the organization can foster continuous growth and development.
Credit appraisal is a complex and time-consuming process that demands high accuracy and involves collecting vast amounts of information Despite advancements in technology, current systems remain basic and fail to provide adequate support for managers seeking remote operational capabilities The growing preference for online work, which offers time-saving flexibility and appeals to younger generations, highlights the need for modernization By updating their technology, companies can align with current trends and attract a more diverse workforce in the future.
CT Group should enhance its IT recruitment and training processes while digitizing operations to enable seamless interdepartmental collaboration Updating the information storage system is essential for better organization and accessibility of customer data across all departments Additionally, the company must implement a strategic plan to invest in modern technological tools and provide comprehensive training for employees to maximize their effectiveness The integration of appropriate technology in management and information processing is vital for improving operational efficiency, ultimately benefiting both customers and employees by streamlining business operations and saving time.
In today's competitive integrated economy, businesses must adapt and innovate to thrive Recognizing this need, CT Group has adopted a new strategy to enhance customer experience and boost the commercial potential of its home loan services This offering is not only a vital and unique aspect of the company’s real estate portfolio but also significantly enhances operational efficiency and supports growth in related sectors Central to the home loan process, managed by the Personal Finance Division, is the credit appraisal, which is essential for effective credit management and risk assessment.
The report highlights the significance of the home loan process, focusing particularly on the crucial second step: the credit appraisal procedure at CT Group It provides a detailed examination of the activities involved, offering a comprehensive overview of this essential aspect of the lending profession.
The credit appraisal process for home loans at CT Group offers numerous advantages, characterized by its clarity, functionality, and confidentiality However, the company faces challenges from both internal and external factors, including the ongoing pandemic, cybersecurity risks, and the need for skilled personnel In light of the 4.0 technological revolution, CT Group is committed to continuous development and innovation to navigate modernization and overcome emerging obstacles.
During my internship at CT Group in the Personal Finance Division, I gained invaluable insights into the professional working environment This report, titled “Home Loan Credit Appraisal and Lending for Personal Customers at CT Group,” is derived from company documents, data, and my personal observations I am grateful for this opportunity and hope my recommendations will help improve the company's credit evaluation process.