Fewer customers are taking out loans at banks, although commercial banksand financial companies are scrambling to offer personal loans.

The Hong Kong-Shanghai Banking Corporation, for example, isoffering loans with collateral to buy houses and cars at zero interestfor the first month.

Asia Commercial Bank is providingloans of up to 70 percent of the value of collateral for a maximum25-year term for the purchase of houses.

Along with loansfor buying and renovating houses, banks are also issuing more cards andencouraging customers to use overdrafts to buy goods at certainsupermarkets.

Some banks, and especially financialorganisations, are simplifying loan procedures and loosening conditionsfor loans with no collateral involved to attract more individualborrowers.

At some banks, customers with a monthly incomeof at least 5 million VND (263.2 USD) can be offered a loan of up to250 million VND (13,158 USD).

However, banks said that thepersonal loan market was not taking off as expected because of highinterest rates on personal loans. Only people in urgent situations wereapplying for loans.

The interest rates for personal loansat banks stand at around 16 percent per year, adjusted every one orthree months, depending on each bank.

At Asia CommercialBank, for example, the interest rate for personal loans is at 16.7percent a year with the rate adjusted every three months.

The Vietnam Technological and Commercial Joint-Stock Bank (Techcombank)applies an interest rate of 15.5 percent a year for loans of fewer than10 years and a 16 percent rate for loans of more than 10 years, with therate adjusted every three months.

However, expertsrecommend borrowers carefully read the terms of loan contracts to avoidfuture conflicts./.