THAILAND: Regulatory Crackdowns against Loan Apps

Thailand's approach to consumer lending protection focuses on removing barriers that keep borrowers trapped in debt. Under the Responsible Lending and Fair Power guidelines enforced through 2025 and 2026, the Bank of Thailand (BoT) has fundamentally restructured how consumer lending works .

Key Actions Taken

Ban on Pre-Payment Fees

Pre-payment fees for Personal Loans and Nano Finance are now prohibited. Lenders cannot charge "closing fees," "early settlement fees," or "administrative penalties" for early loan repayment. Interest can only be charged for the actual days the money was held .

Covered Products

The prohibition applies to:

• Personal Loans (P-Loans) including revolving credit ("Cash Cards") and term loans
• Nano Finance (specialized lending for small-scale entrepreneurs, street vendors, and informal workers) 

Interest Rate Caps

The BoT maintains strict Interest Rate Caps: 25% for Personal Loans and 33% for Nano Finance. Because banks are already lending at or near these caps, they cannot offset the loss of pre-payment fees by increasing interest rates .

Persistent Debt (PD) Rules

If a borrower has been in revolving debt for five years or more, the bank must offer to convert that debt into a term loan with a lower interest rate (maximum 15%) that must be paid off in five years .

Strategic Context

Thailand's household debt has hovered around 90% of GDP for years. The BoT's strategy aims to create an "express lane out of poverty" by making debt exit as easy as debt entry. The pre-payment fee ban removes the penalty for financial improvement .