Loans for foreigners in Thailand.

Financing and debt are some of the most popular forms of financial vehicles today. In fact, financing is almost always connected to buying a new property, whether the buyer has sufficient funding on their own or not, and can be thus seen as a means of leveraging investments.

Not surprisingly, Thailand offers similar services to those in the Western world. Most financial institutions in Thailand provide loans for real estate purchases to local Thais and Thai companies and the situation is getting increasingly better for foreigners, as well.

What was unheard of some time ago is now becoming a norm and foreigners are provided some (albeit limited) access to financing. The main reason behind the government’s change of heart on this matter was partly its intention to promote tourism and to encourage economic growth in Thailand. Although banks and other institutions offer financing services to outside foreigners, their conditions can be somewhat strict, for example, acquired condominium has to be registered as a condominium under the Condominium Act etc.

Local financing

Thai nationals can enjoy the benefits of personal loans for a variety of purposes. This type of financing usually takes many shapes and forms and ranges from credit cards through business loans to personal loans for education, medical treatment or general use.

Should a foreigner be found eligible to obtain a local bank loan, they must first meet the following criteria:

  • Possess a valid work permit for at least one year (or hold permanent residency)
  • Proof of employment in Thailand and annual salary (including pay slips)
  • In some cases, banks may require employer’s company documents
  • Pass a credit check
  • 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 time higher than each instalment
  • The aggregate amortization of loan must exceed 7 years (for some banks)

Interest rate on local bank loads tends to be fixed and varies from bank to bank. Apart from local options, foreigners may also take advantage of international schemes provided by Bangkok Banks’s Singapore branch and UOB (both of these are aimed at financing real estate purchases).

Mortgage

Foreigners are also able to obtain mortgages that are governed under the Thai Civil and Commercial Code. In order to qualify for protection under the 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 authorized Officer for the following cases:
    • Land with title deed has to be registered at the Land Department, 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
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