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Navigating Loans and Mortgages as a Foreigner in Thailand
30/03/2023
Are you a foreigner living in Thailand and in need of a loan? Whether you’re looking for a personal loan or a mortgage, getting approved as a foreigner can be challenging. However, since the government seeks to boost tourism and stimulate economic growth, there has been an improvement in foreigners’ access to finance. Nonetheless, financial institutions often impose strict conditions on foreign applicants.
In this blog post, we’ll guide you through obtaining loans and mortgages in Thailand as a foreigner.
Key points
- Getting approved for a loan in Thailand as a foreigner can be challenging, but it is possible with the right knowledge and preparation.
- Foreigners must meet specific criteria to be eligible for bank loans in Thailand, including holding a work permit or Thai resident permit, proving their employment status and annual salary in Thailand, and passing a credit check conducted by the bank.
- To qualify for protection under Thai law for a mortgage, foreigners must have the property’s right to ownership, and the mortgage contract must be in writing and registered.
- In practice, it is difficult for foreigners to receive loans from Thai banks to purchase property in Thailand. Still, a few international banks with a presence in Thailand may offer loans to customers via their foreign branches.
Can foreigners get bank loans in Thailand?
Banks in Thailand provide various financial services to the public, including personal loans, business loans, credit cards, and more. A bank loan is a financial service offered by banks where individuals or businesses can borrow a specific amount of money for various purposes such as education, medical expenses, or general use. The borrower is required to pay back the loan amount with interest over a specified period.
For a foreigner to be eligible for a bank loan, they must be able to satisfy the following criteria.
- Hold a work permit (valid for at least one year) or a Thai resident permit.
- Be able to prove their employment status and annual salary in Thailand. This job must also be stable and secure.
- Some banks may require the employer’s company registration documents
- Pass a credit check conducted by the bank
- The applicant’s age combined with the loan period must not exceed 60 years
- Total income must be at least three times higher than each installment
- The aggregate amortization of the loan must exceed seven years
The bank will require the following information to be submitted:
- Copies of passport including the visa page, identification card, or government office identification card
- Marriage certificate of the applicant and spouse (if applicable)
- Confirmation of income or salary and copies of bank statements
- Copies of land or unit title deeds, sale and purchase contracts
Can foreigners get a mortgage in Thailand?
As per Section 702 of the Thai Civil and Commercial Code, a mortgage is a legal agreement in which a mortgagor assigns a property to a mortgagee as security for an obligation without physically transferring ownership of the property. The mortgagee has the right to receive payment from the mortgaged property, irrespective of whether the owner has been transferred to a third party, and this takes priority over other creditors.
Under Thai law, the following immovables can be mortgaged if they are registered according to the law:
- Ships (over five tons)
- Floating houses
- Beast of burdens, e.g an elephant, donkey or horse
- Any other movables concerning which the law may provide registration for that purpose
Foreigners can obtain mortgages governed under the Thai Civil and Commercial Code. To qualify for protection under Thai law, the following conditions must be met:
- The mortgager must have the right of ownership of the property
- The mortgage contract must be in writing and must be registered
- The parties must register the mortgage to the authorised officer for the following cases:
- Land with title deed has to be registered at the Department of Lands, Bangkok Metropolis Land Office (Branch), Provincial Land Office or Provincial Land Office (Branch) where the land being mortgaged is located
- Land with no title deed has to be registered at the District Office where the land being mortgaged is located
Can foreigners really get loans and mortgages from Thai banks?
Unfortunately, in practice, foreigners are very unlikely to be able to receive a loan from a Thai Bank to purchase a property in Thailand, bank loans may be more feasible, but it is still difficult to achieve.
To get around this issue, a few banks (international banks with a presence in Thailand) can offer loans to customers in Thailand via their foreign branches.
For example, UOB Singapore can offer mortgages to customers in Thailand because UOB Thailand secures the loan.
Other banks that offer this kind of service include HSBC and ICBC. Please note that while ICBC is open to offering to finance to foreigners, they will usually only lend to Chinese customers and customers from a select few nations, such as Singapore and Malaysia.
It is also possible for foreigners to obtain a loan or mortgage from a bank in their own country, for example, Banque Transatlantique in France. However, in this situation, the bank will require a form of collateral from that country, not Thailand.
Please note that if you own a condo, it is possible to obtain a mortgage. However, suppose a foreigner purchases land or real estate using a Thai company (with Thai partners who are the majority shareholders). In that case, obtaining a loan/mortgage for this purchase may not be possible if the company has no financial activity and a foreign shareholder. Banks are reluctant to issue loans in this situation as they see it as a way for foreigners to bypass the land ownership laws.
What should I be aware of when considering loans and mortgages in Thailand?
Know Your Options
Before applying for a loan, it’s important to understand the types of loans available in Thailand. The most common types of loans are personal, business, and credit cards. Each type of loan has its requirements and terms, so be sure to research before applying.
Check Your Eligibility
Foreigners in Thailand must meet certain requirements to be eligible for a loan. Lenders typically require a work permit, a valid visa, and a Thai bank account. In addition, some lenders may require you to have a certain credit score or income level.
Prepare Your Documentation
Once you’ve determined your eligibility, it’s time to gather your documentation. Lenders typically require you to provide your passport, work permit, and bank statements. If you’re applying for a business loan, you may also need to provide business registration documents.
Shop Around for the Best Rates
Different lenders offer different interest rates and loan terms. To get the best deal, shopping around and comparing offers from multiple lenders is important. Be sure to read the fine print and understand all the fees and charges associated with the loan.
Beware of Scams
Unfortunately, scams targeting foreigners looking for loans are common in Thailand. Be wary of any lender that requires you to pay an upfront fee or deposit before receiving your loan. Always research and verify the lender’s legitimacy before applying for a loan.
Permanent Residency holders
When purchasing a condo, the Permanent Resident can complete the purchase without needing to use money remitted from abroad. This means to purchase can be completed using Thai Baht, making the process easier. For more information, please see here.
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Frequently asked questions
Can a foreigner get a mortgage loan in Thailand?
Yes, foreigners can obtain mortgages in Thailand if they meet certain conditions, including having the right to ownership of the property and registering the mortgage contract.
Is it easy to get a loan in Thailand?
Getting approved for a loan in Thailand as a foreigner can be challenging, but it is possible with the right knowledge and preparation.
How to get a mortgage for a property in Thailand?
To get a mortgage for a property in Thailand, foreigners must meet certain conditions, including having the right to ownership of the property and registering the mortgage contract.
Do banks give loans to foreigners in Thailand?
Yes, banks in Thailand provide various financial services to the public, including personal loans, business loans, credit cards, and more. However, they often impose strict conditions on foreign applicants.
Can I get a loan for a house in Thailand?
It is difficult for foreigners to receive loans from Thai banks to purchase property in Thailand. However, a few international banks with a presence in Thailand may offer loans to customers via their foreign branches.
Can I get a loan internationally?
Yes, it is possible for foreigners to obtain a loan or mortgage from a bank in their own country. However, the bank will require a form of collateral from that country, not Thailand.
What is a foreigner loan in Thailand?
A foreigner loan refers to a loan provided by a bank in Thailand to a foreigner who meets the bank’s specific criteria, including holding a work permit or Thai resident permit, proving their employment status and annual salary in Thailand, and passing a credit check conducted by the bank.
Do banks lend personal loans in Thailand?
Yes, banks in Thailand provide personal loans to the public for various purposes such as education, medical expenses, or general use.
What bank is easiest to get a loan from in thailand?
There is no one bank that is easiest to get a loan from in Thailand as each bank has its specific criteria for loan approval. It’s best to research and compare offers from multiple lenders to find the best deal.
What bank is easiest to get a loan from?
There is no one bank that is easiest to get a loan from in Thailand as each bank has its specific criteria for loan approval. It’s best to research and compare offers from multiple lenders to find the best deal.
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