BoT unveils new debt consolidation measures
The Bank of Thailand (BoT) has trumpeted its success in helping pandemic-hit borrowers consolidate their debt, with its latest move aimed at further easing their repayment burdens.
The BoT will now help individuals consolidate their mortgage and personal loan debts held with different lenders into one institution via refinancing. Previously, the central bank only allowed such debt consolidation within individual financial institutions from which customers had borrowed.
Now, retail or mortgage loans from different lenders can be transferred from one institution to another, or both can be transferred to an entirely different lender.
After loan consolidation, the central bank sets the interest rate ceiling for unsecured retail debt, such as credit cards and personal loans, at a rate no higher than the mortgage rate used after expiration interest rate, plus a maximum of 2% per annum.
The BoT expects most financial institutions to offer debt consolidation packages to their clients by next month, according to Oramone Chantapant, Deputy Director of the BoT.
She said the central bank wanted customers with good credit histories and those affected by the pandemic to have easy access to financial packages that could ease their debt load.
Mortgage interest rates are currently based on the minimum retail rate, or minimum home loan rate of approximately 6-8% per annum. The maximum interest rate for personal loans is 25% per annum.