BoT unveils new debt consolidation measures
The Bank of Thailand (BoT) has touted its success in helping pandemic-stricken borrowers consolidate debt, with its latest move designed to further ease their repayment burdens.
The BoT will now help individuals consolidate their mortgage and retail debt held with different lenders into one institution through refinancing. Previously, the central bank supported such debt consolidation only within individual financial institutions from which customers had borrowed.
Now retail loans or mortgages 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 cap for unsecured retail debt, such as credit cards and personal loans, at a maximum of the mortgage rate used after the teaser rate expires, plus 2% per year at most.
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 wants customers with good credit records and those affected by the pandemic to have easy access to financial packages that could ease their debt burden.
Mortgage interest rates are currently based on the minimum retail rate, or the minimum mortgage rate of around 6-8% per annum. The maximum interest rate for personal loans is 25% per annum.