There's a general lack of understanding of compound interest, total cost of a loan and even total monthly expenditure. I've heard mind-boggling things when discussing credit card debt with Thais I know.

 

To say it bluntly, people who haven't been educated to have this basic understanding shouldn't be allowed to buy things on credit. But the same could be said about many other countries as well. 

 A Thai man i know of  wrote his Toyota truck off  by smashing into another truck , he had no insurance  his Toyota was  on finance, and  he had not paid an instalment for several months , Toyota   Finance were apparently looking for him..  now  he rides around on a brand  new  Honda Wave bike, when i asked how can he do that  when  he has no money  i was told  Honda  showrooms will sell you a bike with bare minimum deposit  and nothing to pay  for  4 weeks   when the first payment is due   the bike get re posessed, if they can find it, once re posessed he goes and gets another bike the same way he got the first one..zero checks 

 

42 minutes ago, BangkokReady said:

Is that all in the wife/partner's name and you pay, or do they check your finances too?

Nothing to do with me .... all based on her 'apparent wage' of 25k/month.

Obviously I'm the one paying for everything.

Edited May 1, 20224 yr by BritManToo

On 4/29/2022 at 6:01 PM, StayinThailand2much said:

From my own observations, many Thais seem to have trouble budgeting, with the salary being spent 2-3 weeks after payday. Can people live on 15,000 baht salary? - Apartment: 6,000 baht, food and transportation: 7,500 baht, clothes/household items: 1,500 baht... (A new car, designer clothes, and a new iPhone every 6 months? - Probably not, so why do banks lend so much money to average salary earners, supporting that people live beyond their means? How can they ever repay all these loans?)

And don't forget.
They take out car loans for the family.
My ex was paying 8,5k every month for an old car. 72 months.

16 hours ago, BritManToo said:

Seems expensive, my mortgage was 1.5M on a 1.8M house and the repayments are 9k/month over 27 years.

You are still paying aged 100 55555

Just now, RafPinto said:

You are still paying aged 100 55555

No more than the rent I would otherwise be paying.

21 hours ago, Isaan sailor said:

Go to any mall in Isaan—any day of the week.  You will see late model cars jammed into the shaded parking areas.  Wife says they’re on credit—both the cars and their mall purchases.

The problem is.
Many girls want a farang and want all those goodies as well. NOW. Not saving or working for it.
New iphone, car, land, house, clothes, holidays.

On 4/29/2022 at 6:55 PM, Willy Wombat said:

Is the guy on the right in the photo going to do a bit of spray painting ?

You would think , didn't notice 'till you said.

11 hours ago, Mr Meeseeks said:

Nonsense.

 

Thai lenders always perform credit checks on persons looking for lease finance on vehicles.

So tell me how every penniless farmer in our Isaan village drive bran new Toyota?! And i know they or they family dont have any money, only few rai rice! Car is like pawn to car loan. Reason always have many to sell in dealer's auction! Have visit few times in Udon, you can get car really cheap from there!

3 hours ago, Walker88 said:

I'm not so sure there isn't a worldwide banking crisis at the moment, and Thailand certainly has one of its own. (The EU also does....a matter for another article, but suffice it to say a banking system 3 times GDP, and a Sword of Damocles resulting from the way Draghi 'solved' the debt crisis gives me the willies).

 

That number "31.5%" related to folks who have defaulted on payments is astonishing. The ease of getting credit is also why about 1 in 15 cars on the road are Mercs.

 

I've looked over the numbers, and while this article is about households, the corporate sector in Thailand added debt well in excess of GDP growth since 2010, which says the 'Boom' in Thailand was just a debt-fueled bubble.

 

Then along came Covid. There are long periods of 'debt moratorium', so banks did not have to note NPLs. Banks also were given the option of recording 'imputed interest', which means they could run debt payments through the income statement even if borrowers didn't actually pay. Thus, bank profits are likely bogus.

 

I read an article sometime ago that a new law allows banks to buy asset management and debt restructuring companies, which is really just a way for banks to move bad debt off the parent's books on to these new entities, which likely will not have to be consolidated.

 

All of this should give one pause. It also suggests why suddenly the authorities are so anxious to restart tourism, Covid be damned. There is likely not sufficient domestic demand capability to create the growth needed to service existing debt, so the only alternative is to attract capital from outside. Tourism is one source, so now the powers that be are anxious to get that back on track.

 

As I noted at the start, Thailand is not along in facing a looming debt crisis, as easy credit and Covid have hit just about every country. putin's war of aggression isn't going to help matters.

 

Batten down the hatches.

 

Remind me how did Draghi "solve* the debt problem.?