GSB readies refinancing loans for credit card debt

GSB readies refinancing loans for credit card debt

Government Savings Bank (GSB) plans to launch refinancing loans for credit card debt, aimed at alleviating the financial burden for debtors with a good payment history.

The refinancing scheme is centred on the middle class, said Chatchai Payuhanaveechai, president and chief executive of GSB.

Finance Minister Uttama Savanayana has already discussed the scheme with Bank of Thailand governor Veerathai Santiprabhob, Mr Chatchai said.

The bank's board of directors will consider the refinancing scheme on Dec 17.

The central bank is talking with financial institutions about extending the Debt Clinic scheme for those who make the minimum payment on credit cards, only 10%, to ease their debt burden.

According to local media reports, participants in the central bank's scheme will see their interest rate on credit card debt lower to 7-12% per year from the maximum 20%, helping debtors pay off their debt faster.

Mr Chatchai said credit card debtors who owe any financial institutions or non-bank companies will be eligible to participate in the refinancing scheme, requiring them to pay a minimum of just 3% per instalment, down from 10%.

For instance, those who have credit card debt outstanding of 100,000 baht will be liable for a minimum payment of 3,000 baht a month, down from 10,000.

The GSB's refinancing scheme for credit card debt has a five-year maturity, and the interest rate could be 12% per year, down from a maximum of 20%.

Those who join the GSB's refinancing scheme must have a good payment record for 12 consecutive months and must never have been on the National Credit Bureau's blacklist, Mr Chatchai said.

Regarding the GSB's low-rate mortgages, which require at least a 10-baht payment per monthly instalment in the first year for a 1-million-baht loan, Mr Chatchai said loan application value is expected to reach 10 billion baht within one month.

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