Collateral in Thailand

[Siam Sam 964]

I am only going on the strength of a few stories that my wife has told me about banks and their lending potential in Thailand. She informs me that any house that is built in Thailand (no matter how remote it is) could be used as collateral for a substanial loan from a Thai bank. She insists that her friend built a house in Isaan and then used it to loan more than one million baht from a bank. Does anyone know much about lending money from banks in Thailand and how comfortable banks are about lending Thai nationals money if they have collateral in the form of a house?

[sinbinjack 251]

Surely any bank will lend if you have collateral,its loans with no collateral that are dangerous.

[joekicker 53]

Yes you can use homes and land and get huge loans. It's not quite a walk-in operation, and it's quite useful to know someone in the bank. Several banks went totally bankrupt on such loans, doing what you suspect banks could do with an operation like that.

 

.

[Siam Sam 964]

Yes you can use homes and land and get huge loans. It's not quite a walk-in operation, and it's quite useful to know someone in the bank. Several banks went totally bankrupt on such loans, doing what you suspect banks could do with an operation like that.

 

.

 

According to the Mrs, most people in her village have at one time or another lent sums of money using their land as collateral. Most of them are debted up and I am of the idea that most rural villages in Thailand have this scenario? I would imagine that it is much easier to obtain a loan in Thailand as the banks are more trustworthy compared to England and the US? The Mrs reckons the interest you pay back is at a very reasonable rate too.

 

Would the banks have a stringent criteria, whereby a permanent job and permanent residency in Thailand would be important? Food for thought considering the Mrs owns a large piece of land.

[nidnoyham 30]

I think most Thai banks know that a loan secured by land is a 'safe as houses'.

We bought some land a few years back at a very reasonable price, because the sellers needed money to pay the bank, rather than forfeit it to them.

 

Borrow no more than you can pay back. Same as anywhere else in the world

[jacko 8,814]

I think most Thai banks know that a loan secured by land is a 'safe as houses'.

We bought some land a few years back at a very reasonable price, because the sellers needed money to pay the bank, rather than forfeit it to them.

 

Borrow no more than you can pay back. Same as anywhere else in the world

Yes and in that sentance is something important. If you don't pay your debt, you forfeit the property or land.

There are a lot of people out there picking up bargains from people who cannot service their debts and need cash.

 

Of course you can borrow money from Thai banks using your land/home as collateral.

Interest rates are low at the moment and hence a loan looks attractive.

 

What will you do with the money? Will it be used in some venture that will generate a better return that the interest teh loan costs you? Home improvements, buying an adjacent plot for example etc

 

Listening to Thais regarding borrowing money is not a good approach, they understand borrowing, but are absent minded when it comes to repayment and rarely think of the future.

[joekicker 53]

The Mrs reckons the interest you pay back is at a very reasonable rate too.

 

VERY reasonable compared with what the Indian money-lenders charge, yep.

 

Would the banks have a stringent criteria, whereby a permanent job and permanent residency in Thailand would be important? Food for thought considering the Mrs owns a large piece of land.

 

No, and especially since Thaksin, there's no stringent criteria. It's really up to the banks. Farmers are much more likely to get some money than city folks.

 

.

[Regyai 415]

No different to anywhere else

 

Security of loan / collateral

Ability to pay / Guarantors

 

Iron clad government jobs seem to be gilt edged in the bank's eyes, otherwise own business with provable throughput of cash in bank account. Much else may require guarantees from 3rd parties of similar standing.

 

 

 

.

[Siam Sam 964]

Thanks for your advice guys. All this has got me thinking........