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

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

Asia Commercial Bank is providing loans of up to 70 percent of the value of collateral for a maximum 25-year term for the purchase of houses.

Along with loans for buying and renovating houses, banks are also issuing more cards and encouraging customers to use overdrafts to buy goods at certain supermarkets.

Some banks, and especially financial organisations, are simplifying loan procedures and loosening conditions for loans with no collateral involved to attract more individual borrowers.

At some banks, customers with a monthly income of at least 5 million VND (263.2 USD) can be offered a loan of up to 250 million VND (13,158 USD).

However, banks said that the personal loan market was not taking off as expected because of high interest rates on personal loans. Only people in urgent situations were applying for loans.

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

At Asia Commercial Bank, for example, the interest rate for personal loans is at 16.7 percent 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 than 10 years and a 16 percent rate for loans of more than 10 years, with the rate adjusted every three months.

However, experts recommend borrowers carefully read the terms of loan contracts to avoid future conflicts./.