katom Posted July 8, 2007 Share Posted July 8, 2007 Hi, Can somebody here can explain me the meaning of changing MLR... me and my wife went to the bank to check for loan and in the bank they offered us a loan for 7%/year intrest but they mantion that this 7%/year could be change and its depand on the country MLR. what is that means? I have to say that its only 7% and no addition intrest/extra mention .. + if we want to pay and finish the loan before the time so have fee of 2% from the last money we pay to close the loan (example: 40K left and we pay 40K so it will be 800 baht fee)... Can somebody here clear this thing as its my first loan I will take. I will read carefully the contract but I dont know this basic thing..about the MLR.. kabkun krap. Link to comment Share on other sites More sharing options...
expatwannabe Posted July 8, 2007 Share Posted July 8, 2007 (edited) Hi, Can somebody here can explain me the meaning of changing MLR...me and my wife went to the bank to check for loan and in the bank they offered us a loan for 7%/year intrest but they mantion that this 7%/year could be change and its depand on the country MLR. what is that means? I have to say that its only 7% and no addition intrest/extra mention .. + if we want to pay and finish the loan before the time so have fee of 2% from the last money we pay to close the loan (example: 40K left and we pay 40K so it will be 800 baht fee)... MLR = Minimum Loan Rate It means that you will pay no less than 7%, and quite possibly more than 7%. The 2% is a Pre-payment Penalty. Edited July 8, 2007 by expatwannabe Link to comment Share on other sites More sharing options...
Pattaya_Fox Posted July 8, 2007 Share Posted July 8, 2007 Hi, Can somebody here can explain me the meaning of changing MLR...me and my wife went to the bank to check for loan and in the bank they offered us a loan for 7%/year intrest but they mantion that this 7%/year could be change and its depand on the country MLR. what is that means? I have to say that its only 7% and no addition intrest/extra mention .. + if we want to pay and finish the loan before the time so have fee of 2% from the last money we pay to close the loan (example: 40K left and we pay 40K so it will be 800 baht fee)... Can somebody here clear this thing as its my first loan I will take. I will read carefully the contract but I dont know this basic thing..about the MLR.. kabkun krap. The MLR (Minimum Lending Rate ) is the rate of interest charged by the Central Bank of a Country when lending to Financial Institutions in the money market. It is also known as the Bank Base Rate. The rate can move up or down. If your loan is attached to a Central Bank`s Minimum Lending Rate then the rate of interest which you are charged may rise or fall depending on the terms of your contract. Link to comment Share on other sites More sharing options...
katom Posted July 8, 2007 Author Share Posted July 8, 2007 its the "govrement saving bank" . Is it risky?? Could it be (in reality not theoreticly) like more 3-5% extra?..... we r talking about 5 years period loan. amount of 300K baht . Link to comment Share on other sites More sharing options...
expatwannabe Posted July 8, 2007 Share Posted July 8, 2007 (edited) its the "govrement saving bank" .Is it risky?? Could it be (in reality not theoreticly) like more 3-5% extra?..... we r talking about 5 years period loan. amount of 300K baht . Yes, it's possible that interest rates could go up 5% in 5 years. It depends on the Thai economy and the central bank, mostly. But I wouldn't say that's "likely." It's just possible. Edited July 8, 2007 by expatwannabe Link to comment Share on other sites More sharing options...
Pattaya_Fox Posted July 8, 2007 Share Posted July 8, 2007 its the "govrement saving bank" .Is it risky?? Could it be (in reality not theoreticly) like more 3-5% extra?..... we r talking about 5 years period loan. amount of 300K baht . Unfortunately no one can safely predict what interest rates will do in the future. On variable rate loans and loans which are linked to Bank Base rates this is a chance that you have to take. Taking out a low fixed rate loan if the period of the loan is long is the best way to go if you can find one, unfortunately the banks and financial institutions do like to offer variable rate loans for longer loan periods as this protects them from volatile movements in the financial markets. Link to comment Share on other sites More sharing options...
katom Posted July 8, 2007 Author Share Posted July 8, 2007 Anyway most likely that I will complete this loan in 2 year ..but lets take the "worst case". what better? Example: fixed rate 9%-10% MLR 7% ? what is the most logic decision in my case ?... Link to comment Share on other sites More sharing options...
expatwannabe Posted July 8, 2007 Share Posted July 8, 2007 Anyway most likely that I will complete this loan in 2 year ..but lets take the "worst case".what better? Example: fixed rate 9%-10% MLR 7% ? what is the most logic decision in my case ?... In almost all cases the 7% loan will be cheaper for you - even considering the prepayment penalty. Link to comment Share on other sites More sharing options...
solo siam Posted July 8, 2007 Share Posted July 8, 2007 and the MLR can in fact fall as well, as it has done I believe over the last 12 months. however Iwouldn't expect much of a drop. Link to comment Share on other sites More sharing options...
frenchFARANGbkk Posted July 19, 2007 Share Posted July 19, 2007 Hi, Do you know if it's possible to get a loan with fixed rate somewhere? As I don't like the MLR thing... And about the prepayment penalty, do all the banks apply this? Then please tell us which bank offered you the best interest rate. Thanks a lot! Link to comment Share on other sites More sharing options...
katom Posted August 3, 2007 Author Share Posted August 3, 2007 UPDATE. in the bank contract they write that the mlr is update (up or down) every 30 days... Thai friend was very concerned about this mention.. Is it normal or no? please advice. I have to say that they mlr today is 6.8-7 something like that. and other banks offer only 8.5-9.5% intrest. Link to comment Share on other sites More sharing options...
frenchFARANGbkk Posted August 3, 2007 Share Posted August 3, 2007 (edited) Hi,Do you know if it's possible to get a loan with fixed rate somewhere? As I don't like the MLR thing... And about the prepayment penalty, do all the banks apply this? Then please tell us which bank offered you the best interest rate. Thanks a lot! Government Housing Bank: No pre-payment penalty starting from the 4th year. 3 first years at fixed rate (around 5%) then MLR -1% for the following years. Edited August 3, 2007 by frenchFARANGbkk Link to comment Share on other sites More sharing options...
katom Posted August 3, 2007 Author Share Posted August 3, 2007 do u mean "govrement saving bank"?? because this is the bank I'm talking about. Link to comment Share on other sites More sharing options...
frenchFARANGbkk Posted August 3, 2007 Share Posted August 3, 2007 do u mean "govrement saving bank"?? because this is the bank I'm talking about. It's this one: http://www.ghb.co.th/th/index.html Link to comment Share on other sites More sharing options...
katom Posted August 3, 2007 Author Share Posted August 3, 2007 ok its different bank. and to my original question what is your opinion knowledge? "in the bank contract they write that the mlr is update (up or down) every 30 days... Thai friend was very concerned about this mention.. Is it normal or no? please advice. I have to say that they mlr today is 6.8-7 something like that. and other banks offer only 8.5-9.5% intrest. " ? Link to comment Share on other sites More sharing options...
frenchFARANGbkk Posted August 3, 2007 Share Posted August 3, 2007 ok its different bank. and to my original question what is your opinion knowledge?"in the bank contract they write that the mlr is update (up or down) every 30 days... Thai friend was very concerned about this mention.. Is it normal or no? please advice. I have to say that they mlr today is 6.8-7 something like that. and other banks offer only 8.5-9.5% intrest. " ? I will ask ask because I'm not the one who got the loan, will tell you later. Link to comment Share on other sites More sharing options...
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