# 610 billion baht in mortgages may become non-performing loans (NPLs)

- Link: https://www.thailand-business-news.com/banking/127734-610-billion-baht-in-mortgages-may-become-non-performing-loans-npls
- Published: 2024-02-27T10:02:10+07:00
- Author: Aishwarya Gupta

**National Credit Bureau warns of 610 billion baht in potential bad housing loans,
urges government intervention to prevent defaults.**

---

## Key Takeaways

 * The National Credit Bureau warns of a potential 610 billion baht in housing loans
   turning into bad debts, mainly affecting low and middle-income earners.
 * Thailand’s household debt, standing at 16.2 trillion baht, poses a significant
   risk to the economy, with one trillion baht in non-performing loans.
 * The automobile industry is experiencing a 12.46% drop in car sales due to increasing
   household debt and stricter loan criteria by commercial banks, leading to a 50%
   rejection rate for car loan applications.

**Surapol Opasatien**, CEO of the National Credit Bureau, expressed concern that
many mortgage borrowers, who are mostly low and middle-income earners, have purchased
houses for **3 million baht or less**. These borrowers are now late by **1-2 repayments**,
which raises the risk that their mortgages may become **non-performing loans (NPLs)**.

ADVERTISEMENT

Without urgent government assistance in the form of debt refinancing, these loans
could have a significant impact on the Thai economy in the long run. The National
Credit Bureau reports that Thailand’s household debt stood at **16.2 trillion baht**
by the end of last year, accounting for **91% of GDP**, which is considered a significant
risk.

Of this total debt, approximately **one trillion baht** is classified as NPLs. This
includes **180 billion baht** in housing loans, **230 billion baht** in vehicle 
loans, **260 billion baht** in personal loans, and the remainder in credit card 
loans.

The situation is further exacerbated by challenges faced by other industries. For
instance, car sales for January this year dropped by **12.46%** compared to the 
same period last year due to increasing household debt and stricter loan extension
criteria by commercial banks. Rejection rates for car loan applications have risen
to **50%**.

## National Credit Bureau Raises Alarm

The National Credit Bureau has expressed concern over the potential of 610 billion
baht in housing loans turning into bad debts. Urging the government to intervene
swiftly, the bureau warns that many mortgage borrowers, predominantly low and middle-
income earners, are falling behind on repayments.

### Related**Posts**

###  󠀁[USD to THB Exchange Rate Today: Thai Baht Moves with Global Market Trends](https://www.thailand-business-news.com/banking/331689-usd-to-thb-exchange-rate-today-thai-baht-moves-with-global-market-trends)󠁿

###  󠀁[Bank of Thailand Unveils Framework to Shield Financial Sector from Illicit Activities](https://www.thailand-business-news.com/banking/328409-bank-of-thailand-unveils-framework-to-shield-financial-sector-from-illicit-activities)󠁿

###  󠀁[Tokenised Deposits vs Stablecoins: Why Thailand’s Cautious Path Differs from Hong Kong and Singapore](https://www.thailand-business-news.com/banking/321239-tokenised-deposits-vs-stablecoins-why-thailands-cautious-path-differs-from-hong-kong-and-singapore)󠁿

###  󠀁[Thailand’s economy in July saw growth, boosted by the momentum of the global technology and AI cycle](https://www.thailand-business-news.com/banking/326128-the-thai-economy-in-july-expanded-from-the-previous-month)󠁿

## Urgent Government Assistance Needed

CEO Surapol Opasatien highlighted signs indicating that a significant portion of
mortgages, particularly those for houses valued at 3 million baht or less, could
become non-performing loans. Unless debtors receive prompt assistance, such as debt
refinancing, the loans may significantly impact Thailand’s economy in the future.

## Household Debt Risks on the Rise

According to the National Credit Bureau, Thailand’s household debt reached 16.2 
trillion baht in the previous year, equivalent to 91% of GDP. Of concern is the 
one trillion baht classified as non-performing loans, including 180 billion baht
in housing loans. The automobile industry has also been affected, with car sales
declining due to rising household debt and stricter loan criteria from commercial
banks.