Loans & mortgages for foreigners in Thailand.

This is a fundamental outline of loans for foreigners in Thailand.

Most financial institutions in Thailand provide loans to local Thais and Thai companies, and because the government wants to promote tourism and encourage economic growth, foreigners’ access to finance has increasingly gotten better. However, the financial institution’s conditions for foreigners can be somewhat strict.

Let’s take a look at the conditions.

Bank loans in Thailand

Banks offer a range of financial services to Thai people from credit cards, business loans to personal loans for education, medical treatment or general use.

Banks have their own policies when lending to foreigners and for a foreigner to be able to access bank loans, they must meet the following criteria:

• At least a one-year work permit or a Thai resident permit
• Proof of employment in Thailand and annual salary (including payslips)
• In some cases, banks may require the employer’s company documents
• Pass a credit check conducted by the bank
• The applicant’s age combined with the loan period must not exceed 60 years
• Must have a stable and secure job
• Total income must be at least three times higher than each instalment
• The aggregate amortisation of the loan must exceed seven years (for some banks)

When applying for a loan, the following information must be submitted to the bank:

• Copies of passport including the visa page, identification card or government office identification card
• Marriage certificate of the applicant and spouse (if applicable)
• Confirmation of income or salary, and copies of bank statements
• Copies of land or unit title deeds, sale and purchase contracts

The interest rates for local bank loans are based on a fixed interest rate depending on the bank.

Apart from local options, foreigners may also take advantage of international home loan schemes provided by Bangkok Bank’s Singapore branch and UOB.

Mortgages for foreigners in Thailand

What is a mortgage?

A mortgage is a contract where a person, called a mortgagor, assigns a property to another person, called the mortgagee, as security for the performance of an obligation, without delivering the property to the mortgagee, as stated in section 702 of the Thai Civil and Commercial Code.

The mortgagee is entitled to be paid out of the mortgaged property in preference to ordinary creditors regardless as to whether or not the ownership of the property has been transferred to a third person.

What immovables can be mortgaged?

The following immovables can be mortgaged if they are registered according to the law:

• Ships of five tons or over
• Floating houses
• Beast of burdens, such as an elephant, donkey or horse
• Any other movables with regard to which the law may provide registration for that purpose

Criteria for a mortgage

Foreigners can obtain mortgages that are governed under the Thai Civil and Commercial Code. In order to qualify for protection under Thai law, the following conditions must be met:

• The mortgager must have the right of ownership of the property
• The mortgage contract must be in writing and must be registered
• The parties must register the mortgage to the authorised officer for the following cases:
  • Land with title deed has to be registered at the Department of Lands, Bangkok Metropolis Land Office (Branch), Provincial Land Office or Provincial Land Office (Branch) where the land being mortgaged is located
  • Land with no title deed has to be registered at the District Office where the land being mortgaged is located

Conclusion

Financial institutions are progressively allowing loans for foreigners in Thailand, but in order to get a loan or mortgage, it is important that you meet the criteria of the banks.

Do not hesitate to contact Acclime if you need any advice.