Question About Interest only Loan

[ozbanglamung]

I have some Thai friends who want to borrow from me  1.7M baht. The annual interest rate will be 12%, and the loan period is 48 months (four years) The interest (only) will be paid monthly at 1,700 baht per month and the principal (1,700,000 baht) with fall due on the the 48th month of the loan period. Now they have no collateral to offer. I am wondering if it is possible in Thailand to have somebody's wages garnished every month for  loan payments if the parties agree. If not ,short of not giving them the loan, are there any other options to  ensure at least the interest is paid every month, short of the threat of cement boots ?

 

Thanks in Advance and if this question is posted in the wrong forum I apologies. This is the only one that looked remotely close to my subject title

[Pib]

Are you sane?

 

You are going to loan someone Bt1.7M with no collateral and with them only needing to pay interest until a final lump sum payment of Bt1.7M is due in 48 months.  Me think you are going to be in for a rude surprise on month 48...and probably long before then.

[nycjoe]

You are being scammed. How do they know that you have that kind of money? Best you leave Thailand or you will end up starring in a “man falls from 18th floor” post.


Sent from my iPhone using Thaivisa Connect

[dabhand]

OP, the monthly interest rate is 1%, so that equates to Bt17,000/month (not Bt1,700/month).

 

Any further comment is really not needed.

[jvs]

If a bank is not going to loan it to them it is because there is a good reason behind it.They are going to do a runner and you wont even see the first 17000 baht.

 

[shadowofacloud]

Enough was said already - don't go there. I've lent money on much more regulated markets and it often was a very close call.

The scenario you are describing is, well, definitely not for the risk averse.

 

If you really like a gamble, you may want to divide the 1.7M THB into five lots and invest each of these into the current top five cryptocurrencies, much better chances of turning a profit. Or just play the lottery. Or go to a casino. More fun, less frustration. With the latter, you will even get free drinks. ?

[NCC1701A]

"I have some Thai friends who want to borrow from me  1.7M baht."

 

"Now they have no collateral to offer. I am wondering if it is possible in Thailand to have somebody's wages garnished..."

 

"...the threat of cement boots"

 

 

[NCC1701A]

"somebody's wages garnished every month for loan payments"

 

my girlfriends mortgage is 1.15 million baht and it will take her 30 years to pay it.

how much money do your friends make now?

 

[janclaes47]

3 minutes ago, NCC1701A said:

how much money do your friends make now?

I think they intend to make 1.7 M in one go.

[janclaes47]

2 hours ago, ozbanglamung said:

if this question is posted in the wrong forum I apologies. This is the only one that looked remotely close to my subject title

The correct forum would have been the pub.

 

By the way does your mum know you are using the internet so late?

[NCC1701A]

OK I feel bad for the Op now. I can see why 17,000 baht X 48 months would be nice to have and then get your principal back.

 

another question would be what type of contract can be signed between the parties.

 

or how much would it cost to legally compel someone to pay you back.

 

what are your friends going to do with the money? is it something you can made the legal owner of until the money is paid?

[user343434]

Wowowowowow, easy tiger..

 

How many times you would even borrow someone in your your home country at your parent's neighborhood an amount of 50.000 US$ or 44.000 EUR or 69.000 AU$?

LOL an average Thai has about 15.000 THB monthly which equals an income if he/she works the entire year (normally not) 180k THB.. 

hence the interest will not even be covered by normal wages.. 

somebody must have made a good friend to you and has also clearly identified as a fruitcake easy to drain.. 

 

common sense must have making the alarm bells ringing before you even post such a question. 

 

 

[Pib]

OP,

   Send your friend to a loan specialist which I'm sure can also offer a 48 month interest only with lump sum payment loan.  But I expect the loan payback terms will be enforced.  Plus loaning money to  friends in Thailand has a high probability of destroying that relationship.

 

[1FinickyOne]

Have you looked at their financials? Do they have the means to live and pay the interest AND save enough money to pay the principal in one lump sum?

 

That would be challenging for anyone to do in 4 years... but as I have told my wife - - people who are not good at handling and saving money are not suddenly going to get better... there are reasons that banks don't lend money to everyone... it seems that you might be taking a risk that a bank would not be willing to take... if that is fine for you - - chance it... but it least run their numbers and see if it is even possible for them to live and pay interest and save enough to repay the principal...

[xtrnuno41]

I was thinking should i give a reply as all replies are the same.

It s a scam , you never get it back. Yha friends, but they will not be anymore.

Seen, lived, heard about loans to "friends", you can forget about repayments.

WHy they come to you loaning at 12%, why not bank?

Ok enough, see for yourself. 

[Lacessit]

I'm not sure what the default rate on loans in Thailand is; however, the number of newish vehicles lining the used car lots due to repossession should be a pretty good clue.

My guess is the OP's "friends" want to acquire a shiny new toy for status. The fact the banks or finance companies won't do it for them is another clue.

The OP is obviously unfamiliar with the Thai habit of treating loans as gifts.

[Enoon]

 

Once the vendor has received the full price up front and the merchandise is firmly the property of your friends......everyone will be happy (sabai).

 

 

[digger70]

Sucker,,  How are they going to come up with THB MIL 1.7 ???? Are they going to safe that up over a 4 Year Period ,,,  

One thing for Sure,,,No chance in the world/ No Hope In Hell.

[connda]

Do not loan anyone money that you are not prepared to lose!!!  Personally, unless you have a friend named Guido who will guarantee that you get your money back, you are gaming a fool's game.  Don't do it.  Seriously.  You're just asking to be ripped off.

I can just see the Thai Visa News a couple of months from now:
Foreigner Loses 1.7 Million Baht In "Interest Only Loan" Scam

[tryasimight]

There may well be cement boots involved eventually.  What size do you take? 

[greenchair]

There's a law about how much interest you can charge. I'm not sure but I thought it was 5 percent. 

There's also a law that if the money is not paid as by the contract. You then have 2 years to make your recovery through the courts and such. After that the loan is void. 

I know because my husband gave a loan 200000 similar to yours. 

He did manage to get the principal back, just barely. In installments. And she had a government job. 

[Pib]

5 minutes ago, greenchair said:

There's a law about how much interest you can charge. I'm not sure but I thought it was 5 percent. 

There's also a law that if the money is not paid as by the contract. You then have 2 years to make your recovery through the courts and such. After that the loan is void. 

I know because my husband gave a loan 200000 similar to yours. 

He did manage to get the principal back, just barely. In installments. And she had a government job. 

 

It's 15% per year for the kind of loan the OP was talking about.  More info at below weblink.

 

https://www.tilleke.com/resources/thailand-new-law-interest-overcharging

Quote

Nonetheless, it should be observed that the interest rates permitted by Thai laws can differ. For example, loans for consumption under the Civil and Commercial Code must not exceed 15 percent per year, while loans with commercial banks could be higher, as permitted by specific legislation, such as the Interest Rates for Loans from Financial Institutions Act B.E. 2523 (1980) and the BOT’s notification subject on interest, fees, surcharge for personal loan.

 

[SOTIRIOS]

...they are NOT your friends.....'buddy'.....

[elgenon]

Yikes. IMHO

[Snow Leopard]

Even in the UK i wouldn't do this, maybe with a proper contract and through a lawyer but i would still be 50/50. What do they need this kind of money for in the first place. Also why can't they get it from a bank? Ask yourself that question. 

[worgeordie]

Friends + Loan.....says it all, my father once said to me,

and I have never forgotten, if you have someone hanging

around you ,who you don't want, lend them a few quid and

you will never see them again.

Friends and family are the worst people to lend money too,

99% chance you will get repayment,100% if Thai.

regards Worgeordie