Thailand’s Student Loan Fund tackles 100 billion baht in bad debts

[webfact]

The Student Loan Fund (SLF) in Thailand has accumulated bad debts amounting to 100 billion baht (US$2,816,902,000). This is a significant increase from 2017 when the total non-performing loans stood at 60 billion baht. The SLF’s manager, Chainarong Katchapanan, attributes this surge to borrowers prioritising other repayments, such as credit card debt and mortgages, over their student loans.

 

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The SLF is implementing new measures under the revised Student Loan Fund Act of 2023 with the hope of incentivising borrowers to pay off their outstanding debts. The goal is to decrease the volume of non-performing loans and maintain the fund’s long-term financial stability.

 

The new law has introduced a fresh approach to loan repayment calculations. When a borrower makes a payment on a defaulted loan, the payment is first applied to the principal balance. Once that’s paid off, the money goes towards the accrued interest and, finally, any remaining fines. This is a stark shift from the past, when repayments were first used to cover outstanding fines and interest, with the principal only being paid once these were cleared, reported Bangkok Post.

Furthermore, the amended law has set a cap on loan interest at a maximum of 1% per year and a 0.5% annual fine for defaulters. This is a considerable reduction from the previous arrangement, where borrowers were charged 1% per year in interest and a hefty 7.5% fine for defaulting.

 

by Mitch Connor

Picture courtesy of studentloan

 

Full story: The Thaiger 2024-01-22

 

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[flyingtlger]

5 minutes ago, webfact said:

Furthermore, the amended law has set a cap on loan interest at a maximum of 1% per year and a 0.5% annual fine for defaulters.

If anyone had a half a brain, they stall too....

[Gottfrid]

So, they made the changes believing that would result in a smaller amount of non performing loans.

29 minutes ago, webfact said:

Furthermore, the amended law has set a cap on loan interest at a maximum of 1% per year and a 0.5% annual fine for defaulters. This is a considerable reduction from the previous arrangement, where borrowers were charged 1% per year in interest and a hefty 7.5% fine for defaulting.

To me, this reads like a big incentive to pay everything else first, as the interest is the lowest possible. If they kept the old system, more people would have been prioritizing their student loans.

[hotchilli]

5 hours ago, webfact said:

The goal is to decrease the volume of non-performing loans and maintain the fund’s long-term financial stability.

Another own goal...

[john donson]

maybe only give student loans for jobs with a future, not for arts, or other woke stuff studies, that can pay back the loan ?

 

if they don't pay back the loan, can they not impound whatever they have? car? condo ?

Edited January 22 by john donson

[bkk6060]

They should get together and lobby Joe Biden to pay it off like he foolishly is doing in the U.S.