The Bank of Thailand (BOT) has agreed with financial institutions to launch debt consolidation measures to help retail debtors affected by the economic downturn due to COVID-19.
The debt consolidation measure is an alternative to retail debtors in part of the debt restructuring. The measure allows borrowers to combine their credit card, and personal and mortgage loans into one amount under the same financial institution.
Thanyanit Niyomkarn, the assistant governor, and the Financial Institutions Supervision Group 2 of Bank of Thailand said that the current situation was highly uncertain.
As some business sectors were unable to operate normally, this has caused a problem in the households’ income, said the assistant governor.
The interest rate usually stands between 16 and 25 per cent for personal loans but the new measure will reduce the rate to the minimum retail rate (MRR) of 5.75 to 8.8 per cent.
Debtors will also be allowed to extend their repayment period with no additional cost and the measure will not damage their credit rating, Thanyanit said.
The BOT believes that the measure will support debt burden among debtors during this difficult period and help financial institutions manage their risks.
Debtors can request to join the measure from September 1, 2020, to December 31, 2021.
