Thais borrow early and get trapped in a cycle of debt

[Fred white]

9 minutes ago, tabarin said:

Car lease, brand new phones, condo mortgage and all this with little to no income while they are still students or just finished studying.
Add on a hefty education debt that includes external loans used for drinking and holidays.

Guess I should be driving a supercar and live in one of the biggest houses, with my income in comparison.
Many are bankrupt without even understanding it. Can't wait for buying all this stuff cheap thanks to them fools.

Sounds like the US of course there they want tax payers to fund their parties

[OttoPollmann]

To all these thai apologizer that all these pesky Farangistan countries are in debt too.
What everyone of these guys have forgetten, the system how these countries work require that you need to have debt.
To get a tax rebate it is preferable to have some long term loan on a house. This is forward planing and if it is properly calculated at the retirement age you are debt free and your house is partly paid by the tax rebate.
Or how you thing big global companies pay no tax at all. They writing of some debt and loss.

 

You have something comparable in Thailand? I don't think so.

Have a look to all those farmers. They are all in debt. Every year at the time they have to pay back the loan to the farmer's bank. Then you can see them to borrow money just for one day and if they are lucky, they pay just 5% for this day. On the next day they will re-new a loan again from the bank for another year.
This is a fatal cycle where it is almost impossible to escape and they cannot claim private bankruptcy like in these pesky Farangistan countries.

The only way out is by suicide. Think about it you apologizer.

[mania]

2 hours ago, cmsally said:

Something that is actively promoted by the push towards a "cashless society". All those that understand the use of credit cards would have grown up using cash. If we are pushed towards "numbers on a screen" , our grasp at how the physical, numeracy aspect of money works lessens. Much easier to overspend and the large corporations that profit , know this only too well.

Casinos agree with you & it is why they want you to convert cash to chips

 

If you had to reach into your pocket every time you lost you would not play as long.

But with a stack of colorful chips on the table you will play on.

[Huckenfell]

8 hours ago, dcnx said:

The music will stop eventually.

 

I’m absolutely shocked to hear people making 9000 - 15,000b per month can’t afford a new car and the latest iPhone.  

Cars , both new and 2nd hand are far too expensive in Thailand. There are literally thousands of used cars standing in yards that will never be sold unless prices drop.

[harriott456]

so this is only Thailand issue?....why not just post ' I got ripped off by my bar girl love and her family and now hate Thailand and everything abut it' and be done with it!...

 

[Huckenfell]

7 hours ago, Cadbury said:

And the government is hell bent on delivering a stimulus package which will include easier loan access for workers, small business and farmers. 

That proves they don't give a toss about the terrible household debt situation. Added debt for these people is just a means to and end to get the economy stimulated. They don't care about the personal damage it does to the lives of people.

As it happens the man who appointed himself to manage the economy is the same man who yesterday expressed his faux concern for low income people; the one's who will be tempted into taking the easy loans in his stimulus package. 

What does the National Economic and Social Development Council think of that?

A Farang with Bht 45000 per month income and a wife who owns 1 Rai of land, cannot get finance to build a basic modest family home.  

 

[hellohello123]

1 hour ago, Baerboxer said:

 

Thais regard loans, especially within the family, as gifts.

 

My wife's sister telephoned one day to say she was on the way to the garage to buy her new car. Only she was ThB 20k short and could my wife transfer it quickly to "lend her". Next she opened a new restaurant and wanted another 20k loan to buy stocks of ingredients etc.

 

After 12 months we asked about repayment via father-in-law. Sister said "oh, are they short of money now then need me to pay back". That attitude sums it up. No responsibility or accountability to pay back - you've more than me so I can take some; entitled mentality.

 

Since then she's had several issues with loan sharks and land deeds. Some of which were her parents and which she and her partner were not entitled to use as collateral.

This may be true , but the banks not going to accept their loan as a gift and write it off

Or say

"Oh you will lose face if we chase you, no problems, dont worry about it!"

[anterian]

Maxing out on credit cards is for the middle classes, poor people don't have bank accounts, they use money lenders. 

 

[Bundooman]

6 hours ago, faraday said:

Comprehension not your strong point, Mr Underhill??

 

But 'High and Mighty' is yours eh, Mr faraday?

[hellohello123]

1 hour ago, toofarnorth said:

I too have a 10 yo Nokia , when it rang one day in Pai a couple of years ago , it caused much amusement from visiting young back packers.  Hey ! it tells me who is phoning , I can make calls with it , it contains lists of numbers I use , let folk find it fun , it does all I want . Of cousre if I subscibed to Sit on my facebook it might let me down.

I would love to use my 10 yr old nokia , however, the newer ones do make life much better

eg using google maps, working messanging app, being able to use the internet while on the move

 

you dont need high end phones to use these apps but the entry level smart phones dont work very good in my opinion,

eg I purhcased a new nokia smart phone entry level, and the "Accept button" on google maps would come up behind the phone back button, so  I simply put it in the cupboard a week later

[PaDavid]

It seems to me there's not much difference here than back in England. Three times I paid off my ex-wife's credit cards when payments became unmanageable for her. Everything spent on what can be best described as fripperies.

 

When I first came to Thailand my (now) wife was a teacher earning 15,000฿ per month. She had a house loan of 500,000฿, a car loan of 300,000 and two personal loans of around 200,000. How she ever hoped to pay them off I don't know. But, at least she owed money largely on things which had a resettlement value. And, a house, and a car (to get her to work) could be considered essentials - unlike the things my ex spent the dough on. 

 

Having said all that, I agree that it seems too easy for the locals to borrow money that any reasonable lender could see they have little hope of paying off in their lifetimes. 

[Fred white]

34 minutes ago, OttoPollmann said:

To all these thai apologizer that all these pesky Farangistan countries are in debt too.
What everyone of these guys have forgetten, the system how these countries work require that you need to have debt.
To get a tax rebate it is preferable to have some long term loan on a house. This is forward planing and if it is properly calculated at the retirement age you are debt free and your house is partly paid by the tax rebate.
Or how you thing big global companies pay no tax at all. They writing of some debt and loss.

 

You have something comparable in Thailand? I don't think so.

Have a look to all those farmers. They are all in debt. Every year at the time they have to pay back the loan to the farmer's bank. Then you can see them to borrow money just for one day and if they are lucky, they pay just 5% for this day. On the next day they will re-new a loan again from the bank for another year.
This is a fatal cycle where it is almost impossible to escape and they cannot claim private bankruptcy like in these pesky Farangistan countries.

The only way out is by suicide. Think about it you apologizer.

A tax rebate is the govt giving you back the money you gave them as an interest free loan. years ago in the US farmers would go to the bank to barrow money for the growing season at the end of the harvest they would pay it back if they had a bad year they could lose the farm in fact I think it was in the 80s or 90s many did

[Gojo62]

I remember a time where we made do until it broke and could not be fixed be it, fridges, tvs, sofas but then came the credit card boom and everyone upgraded everything just to have the best. The caretaker where I lived complained he had a storeroom full of good quality used items that nobody wanted, he was willing to give away fridges, sofas, TV's just to clear the space and then the World crashed and he was again begging for used stuff for new tenants, nobody will ever listen and learn it is all about face and while they can get credit they will.

[apophyss]

What about all the not official loans ?

Are they include in this numbers ?

 

[alan grice]

Overvalued Bhs hitting Thais more than Ferangs when they work in other countries. Cant pay of the truck anymore


Sent from my iPhone using Thaivisa Connect

[Globe Trotter]

1 hour ago, Fred white said:

In a way rent is a loan you pay monthly to live there if you don't or can't pay they kick you out at least with a home loan eventually you own it (well as long as you make the yearly rent payments to the govt)

I was referring to bank loans and credit, by definition renting isn't really a 'loan' 

[Yinn]

4 hours ago, khunpa said:

The big difference is that Thailand has no welfare system.

Big difference 40% “black” money.

 

so not really 78%. About 45%.

 

last month I sell durian, mangosteen from my tree.

100,000+ baht. 

Prayut don’t know about it.

all the neighbor same.

 

 

[faraday]

28 minutes ago, Bundooman said:

But 'High and Mighty' is yours eh, Mr faraday?

No, not at all. He didn't want, or appear, to comprehend my post, & incorrectly commented.

 

 

Is it nice being a White Knight though...makes you feel so brave, I'd imagine?

 

 

[rocketman777]

Not just Thais  - debt enslavement is an unspoken bank/government policy

 

eg : UK household debt amounts to £1.78 trillion, or 86.58% of gdp

 

US student debt was $1.52 trillion and that 44.2 million people owed debt. 2018

 

People don't go on strike when they have a mortgage to pay.

 

Household debt also allows consumerism to flourish while decreasing wages and sending industrial production and high paying skilled jobs overseas

[limbojunkie]

I wonder how my Thai coworkers can afford traveling to Japan, Korea, Australia and Europe every few months. Now I know how.

 

It's not just a Thai issue. It's worldwide. American and Europeans are not doing well with saving either today.

[Fred white]

23 minutes ago, Gojo62 said:

I remember a time where we made do until it broke and could not be fixed be it, fridges, tvs, sofas but then came the credit card boom and everyone upgraded everything just to have the best. The caretaker where I lived complained he had a storeroom full of good quality used items that nobody wanted, he was willing to give away fridges, sofas, TV's just to clear the space and then the World crashed and he was again begging for used stuff for new tenants, nobody will ever listen and learn it is all about face and while they can get credit they will.

Growing up I remember having 2 TV one had sound and one had a picture

[Krataiboy]

No problem. Once we go cashless and the banks control every penny or baht we thought we owned, they will be able to prevent us from getting into debt simply by denying us access to "our" money.

 

This is because, as I understand it, our user-unfriendly banking laws say any cash you stick in a bank automatically becomes legally theirs.

 

Of course, the banks which cost taxpayers to bail out last time they screwed up the global economy will still be permitted to run up enormous debts on dodgy investments (using our money), safe in the knowledge that if they come a cropper they raid our digital deposits to bail themselves out.

 

To add insult to injury, the way interest rate are falling, in a few years we can expect to earn no interest at all on money we entrust to them, and ultimately banks will actually charge us for lending them the fruits of our labour.

 

All cash will be digitalitalised and held on computers, so there's no question of sticking any under your mattress for a rainy day. Pity, because that's about the only way to the beat the giant ponzi scheme lurking in the pipeline. 

 

 

[hellohello123]

11 minutes ago, Fred white said:

Growing up I remember having 2 TV one had sound and one had a picture

that being said, I remember I bought a tv that was $1500 and it was one of the cheaper ones

and thats in years ago dollars

now you can buy a new 50-60inch tv for $500 and thats in todays dollars,

 

so tvs for example and virtually every other household appliance has tumbled down in price, so often is much more efficient to replace instead of repair

[Fred white]

9 minutes ago, Krataiboy said:

No problem. Once we go cashless and the banks control every penny or baht we thought we owned, they will be able to prevent us from getting into debt simply by denying us access to "our" money.

 

This is because, as I understand it, our user-unfriendly banking laws say any cash you stick in a bank automatically becomes legally theirs.

 

Of course, the banks which cost taxpayers to bail out last time they screwed up the global economy will still be permitted to run up enormous debts on dodgy investments (using our money), safe in the knowledge that if they come a cropper they raid our digital deposits to bail themselves out.

 

To add insult to injury, the way interest rate are falling, in a few years we can expect to earn no interest at all on money we entrust to them, and ultimately banks will actually charge us for lending them our money.

 

It will all be digitalitalised and on computers, so there's no question of sticking any under your mattress for a rainy day. Pity, because that's about the only way to the beat the giant ponzi scheme lurking in the pipeline. 

 

 

Actually banks already charge for keeping our money if you don't have direct deposit or keep a minimum amount

[Caldera]

This article seems to be spot on, from my experience. Quite many Thais I know got credit cards as soon as they had enough pay slips to apply, maxed them out within a few months (mostly spent on household items, motorcycles, electronics/gadgets) and have been servicing that debt (more or less diligently) ever since.

 

Due to the high interest rate, they have no realistic chance to reduce their debt anytime soon. Some reckon they might eventually earn enough to pay it off, others are resigned to taking their chances with the lottery.

 

I assume that the proverbial will really hit the fan once there's a significant economic downturn that will cause Thailand's fairytale unemployment rate to rise. In that event, I'd expect bad debt to explode. Thais aren't really familiar with the prospect of unemployment and will be totally unprepared for that to hit them. At some point, I'm sure that will become a huge issue.

[Joe Mcseismic]

Here is an example of the mentality here.

 

I had just come back home from an especially lucrative contract and felt generous.

I gave my wife's parents 250k to buy a good second-hand truck that they could use to maybe help them make money.

 

I found out that they used this money as a down-payment on a brand new Toyota Hi-Lux. They swanned around the village with big face for five months until the truck was re-possessed and they ended up with nothing.

They were told in no uncertain terms that I wasn't happy and they could never expect such largess from me ever again.

[ThomasThBKK]

5 hours ago, Yinn said:

Farang mentality so clever?

 

Household debt to gdp.

 

thailand 78%

australia 120%

denmark 115%

canada 101%

swiss 129%

norway102%

new Zealand 94%

uk 95%

ireland 117%

 

 

 

 

 

https://www.imf.org/external/datamapper/HH_LS@GDD/DEU/ITA/FRA/JPN/THA

 

If you want to compare numbers, than compare real ones.

GDP To household debt is the only meanigful measure here, Thailand has way more than most european countries and even Japan. None the less picking a single statistic never shows the real pictures.

 

If you think you can compare yourself to a nation like Norway which sits on vast amounts of oil and other natural resources and has a tiny population and is considered the only country in the world with negative debt, due it's enormeus wealth fund - you can only lose: https://commodity.com/debt-clock/norway/

 

Quote

According to the IMF, at the end of 2017, the Kingdom of Norway’s gross debt to GDP ratio was 36.66%, but its net to GDP ratio was -90.5%. That minus on the net debt figure is not a typo. Norway has a very large sovereign wealth fund, which outweighs its public debt by a very large amount. Norway is one of the few countries in the world that doesn’t need to borrow any money.

Read more at: https://commodity.com/debt-clock/norway/

 

[hellohello123]

6 minutes ago, Joe Mcseismic said:

Here is an example of the mentality here.

 

I had just come back home from an especially lucrative contract and felt generous.

I gave my wife's parents 250k to buy a good second-hand truck that they could use to maybe help them make money.

 

I found out that they put this money as a down-payment on a brand new Toyota Hi-Lux. They swanned around the village with big face for five months until the truck was re-possessed and they ended up with nothing.

They were told in no uncertain terms that I wasn't happy and they could never expect such largess from me ever again.

i respect your generosity and good heart but youve just soldified the definition of a "walking ATM"

 

btw: what do they say when someone asks "what happened to the car?"

isnt that the definition of losing face?

[Assurancetourix]

6 hours ago, Joe Mcseismic said:

There is already a law that states the maximum interest allowed is 15% per annum.

Very hard to enforce............so, it isn't.

 

A law and Thailand are two words that cannot go together.
especially when it comes to money .

[Joe Mcseismic]

7 minutes ago, hellohello123 said:

i respect your generosity and good heart but youve just soldified the definition of a "walking ATM"

Not at all. The family tried that when I first started dating their daughter and I refused to be used.

Giving them the money was my own idea.

 

I don't have these "ATM" problems because I know and use the magic word. Those who don't know the magic word are doomed to a life of misery here.