Gold Secured Loans In Thailand

[gregb]

Does anyone know of a financial institution that offers gold secured loans in Thailand? Basically, I want to place gold in the Bank's vault, and take a loan for 1 million baht, repayable monthly over a several years.

If I fail to repay the loan, the bank is allowed to sieze the gold. Otherwise, upon successful discharge of the loan, the gold is returned to me. Basically, I need some money for an investment right now, and don't want to sell the gold. A personal loan at 18 - 24% is simply too expensive to be practical, as well as being too short a term, and highly unlikely to be offered in an amount I would need. I want a secured loan, with a correspondingly low interest rate.

Chinese banks do this on occassion. Does anyone know of a Thai bank who would offer such a product?

[torrenova]

I doubt it unless you were to offer a more stable form of security.

For example, you talk about repayment over several years. Now look at the gold price over say 5 years. If it went into reverse, they would be holding collateral worth far less than the outstanding liability.

Are you saying that you currently have Bt1m in gold kicking about ? Then why not just liquidate it ? You could purchase gold futures to protect yourself from a massive rise in the price of the metal.

Edited November 5, 2007 by torrenova

[rken]

Does anyone know of a financial institution that offers gold secured loans in Thailand? Basically, I want to place gold in the Bank's vault, and take a loan for 1 million baht, repayable monthly over a several years.

If I fail to repay the loan, the bank is allowed to sieze the gold. Otherwise, upon successful discharge of the loan, the gold is returned to me. Basically, I need some money for an investment right now, and don't want to sell the gold. A personal loan at 18 - 24% is simply too expensive to be practical, as well as being too short a term, and highly unlikely to be offered in an amount I would need. I want a secured loan, with a correspondingly low interest rate.

Chinese banks do this on occassion. Does anyone know of a Thai bank who would offer such a product?

I know of one person in chiang mai that loan on gold. He would loan on 20% to 30% of spot price with monthly payments plus interest. 5% per month. msm if interested

[torrenova]

5% per month !

Pawn shops do not charge that much !

[Naam]

Does anyone know of a financial institution that offers gold secured loans in Thailand? Basically, I want to place gold in the Bank's vault, and take a loan for 1 million baht, repayable monthly over a several years.

If I fail to repay the loan, the bank is allowed to sieze the gold. Otherwise, upon successful discharge of the loan, the gold is returned to me. Basically, I need some money for an investment right now, and don't want to sell the gold. A personal loan at 18 - 24% is simply too expensive to be practical, as well as being too short a term, and highly unlikely to be offered in an amount I would need. I want a secured loan, with a correspondingly low interest rate.

Chinese banks do this on occassion. Does anyone know of a Thai bank who would offer such a product?

I know of one person in chiang mai that loan on gold. He would loan on 20% to 30% of spot price with monthly payments plus interest. 5% per month. msm if interested

based on that collateral i will do it for 1% per month!

[sonicdragon]

Does anyone know of a financial institution that offers gold secured loans in Thailand? Basically, I want to place gold in the Bank's vault, and take a loan for 1 million baht, repayable monthly over a several years.

If I fail to repay the loan, the bank is allowed to sieze the gold. Otherwise, upon successful discharge of the loan, the gold is returned to me. Basically, I need some money for an investment right now, and don't want to sell the gold. A personal loan at 18 - 24% is simply too expensive to be practical, as well as being too short a term, and highly unlikely to be offered in an amount I would need. I want a secured loan, with a correspondingly low interest rate.

Chinese banks do this on occassion. Does anyone know of a Thai bank who would offer such a product?

I know of one person in chiang mai that loan on gold. He would loan on 20% to 30% of spot price with monthly payments plus interest. 5% per month. msm if interested

based on that collateral i will do it for 1% per month!

Me too

[Ski_Goong]

Does anyone know of a financial institution that offers gold secured loans in Thailand? Basically, I want to place gold in the Bank's vault, and take a loan for 1 million baht, repayable monthly over a several years.

If I fail to repay the loan, the bank is allowed to sieze the gold. Otherwise, upon successful discharge of the loan, the gold is returned to me. Basically, I need some money for an investment right now, and don't want to sell the gold. A personal loan at 18 - 24% is simply too expensive to be practical, as well as being too short a term, and highly unlikely to be offered in an amount I would need. I want a secured loan, with a correspondingly low interest rate.

Chinese banks do this on occassion. Does anyone know of a Thai bank who would offer such a product?

I know of one person in chiang mai that loan on gold. He would loan on 20% to 30% of spot price with monthly payments plus interest. 5% per month. msm if interested

based on that collateral i will do it for 1% per month!

Me too

I would do it for 0.5% per month

I would seconded the advice of just liquidating the gold or some of it.

[gregb]

Are you saying that you currently have Bt1m in gold kicking about ? Then why not just liquidate it ? You could purchase gold futures to protect yourself from a massive rise in the price of the metal.

Yes, but don't want to liquidate. Very expensive option to do that (almost a 7% hit up front) and I lose control of the metal. I want to keep the physical metal, as I expect gold to appreciate substantially over the comming years. What I do want to do however is find a way to increase my leverage.

Is there a Thai fund that offers Gold futures? I need to do this using only official Thai investment vehicles, as it will be from a Thai national and all above board.

The official Chinese model as I understand it is akin to a mortgage. Basically, you get a long term loan and the bank holds your gold as collateral at some fraction of the spot price that they feel comfortable with.

This idea is only interesting if I can get a secured loan over several years in the 7-8% range. I could accept a low value for the collateral, but what I can't accept is a high interest rate. That's a deal killer. This would be a secured loan, and should be treated as such. And while I appreciate the offers from individuals, I am really looking for a solution from a bank.

[sonicdragon]

Are you saying that you currently have Bt1m in gold kicking about ? Then why not just liquidate it ? You could purchase gold futures to protect yourself from a massive rise in the price of the metal.

Yes, but don't want to liquidate. Very expensive option to do that (almost a 7% hit up front) and I lose control of the metal. I want to keep the physical metal, as I expect gold to appreciate substantially over the comming years. What I do want to do however is find a way to increase my leverage.

Is there a Thai fund that offers Gold futures? I need to do this using only official Thai investment vehicles, as it will be from a Thai national and all above board.

The official Chinese model as I understand it is akin to a mortgage. Basically, you get a long term loan and the bank holds your gold as collateral at some fraction of the spot price that they feel comfortable with.

This idea is only interesting if I can get a secured loan over several years in the 7-8% range. I could accept a low value for the collateral, but what I can't accept is a high interest rate. That's a deal killer. This would be a secured loan, and should be treated as such. And while I appreciate the offers from individuals, I am really looking for a solution from a bank.

If I understood correctly you want to take out a loan so that you can buy more gold ? Is that right ?

Why would you be happy to accept a low collateral value, and thus a low loan amount ?

I would be surprised if you can get a 7-8% pa loan from a bank secured by physical gold

Assuming you don't have other collateral and/or funds, then just sell your physical gold now and buy gold futures in a margin trading account and just roll it near to each expiry. You can leverage yourself up to the hilt that way. I don't understand why it needs to be a thai investment vehicle - a thai national can open a brokerage account overseas.

[lannarebirth]

So basically you're looking for is a margin loan. If that's what you want, I'd liquidate the gold and buy either GLD, a gold mirroring ETF through a brokerage account (they will offer you 4x leverage), buy CEF, a bullion repository (in either USD or CDN funds w/same leverage offered, or buy a 2x long Gold fundor shares, such as Profunds, you can then 4x the 2x for a total of 8x margin.

Timing is an important consideration when using leverage. It's oh so sweet when it's going your way, but things can turn ugly very very quickly. Please be careful.

[sonicdragon]

So basically you're looking for is a margin loan. If that's what you want, I'd liquidate the gold and buy either GLD, a gold mirroring ETF through a brokerage account (they will offer you 4x leverage), buy CEF, a bullion repository (in either USD or CDN funds w/same leverage offered, or buy a 2x long Gold fundor shares, such as Profunds, you can then 4x the 2x for a total of 8x margin.

Timing is an important consideration when using leverage. It's oh so sweet when it's going your way, but things can turn ugly very very quickly. Please be careful.

Yep, I concur. That's a better idea than futures too since you wouldn't have to worry about rolling, unless you want massive leverage (which would be very ill-advised).

[gregb]

I don't understand why it needs to be a thai investment vehicle - a thai national can open a brokerage account overseas.

Opening a foreign account is no problem. FUNDING it, on the other hand, is quite difficult for a Thai national.

Thai: "Yes, I'd like to wire 1 million baht to my overseas brokerage account."

Bank: "Bzzzt. Thanks for playing. Next."

Unless you get on a plane and carry cash, it is very difficult to get the money out of Thailand and into an overseas account. That is why I said it has to be a Thai investment vehicle.

[sonicdragon]

I don't understand why it needs to be a thai investment vehicle - a thai national can open a brokerage account overseas.

Opening a foreign account is no problem. FUNDING it, on the other hand, is quite difficult for a Thai national.

Thai: "Yes, I'd like to wire 1 million baht to my overseas brokerage account."

Bank: "Bzzzt. Thanks for playing. Next."

Unless you get on a plane and carry cash, it is very difficult to get the money out of Thailand and into an overseas account. That is why I said it has to be a Thai investment vehicle.

This is a new one on me. Is it illegal to send money abroad ? If so my wife and her family are in trouble. They send money to 2 university students in the US and UK every month by wire transfer. Obviously you wouldn't send baht, you would send whatever currency you need to fund the account....