Central bank issues debt relief measure to slash Thais’ interest burden
The Bank of Thailand on Thursday issued a new debt relief measure aimed at reducing Thais’ interest rate burden from 16-25 per cent to 5.5-8.8 per cent.
The debt consolidation measure will allow borrowers to bundle their credit card, personal and mortgage loans into one sum, Thanyanit Niyomkarn, assistant central bank governor said on Thursday (August 27).
Borrowers can then utilise collateral in their mortgage loans to restructure their debt total with financial institutions.
Borrowers usually pay between 16 and 25 per cent for personal loans, but the new debt restructuring measure will cut this to the minimum retail rate (MRR) of 5.75 to 8.8 per cent, she said.
Debtors will be also allowed to extend their debt payment period, said Thanyanit.
The measure is free of charge and will not damage their credit rating, she assured.
The move comes after the central bank, financial institutions and state-run banks shared concerns about economic recovery amid the Covid-19 fallout. Many businesses are yet to resume normal operations, hitting workers’ income, Thanyanit noted.
Retail borrowers can apply for the debt relief measure via banks from September 1 this year to December 31, 2021.