Collateral for Home Loan

[KHONDAHM]

From the OP: Is it possible to walk into the bank with 1 million baht in gold bars, deposit them in a box (or whatever) as collateral, take out a loan for 1 million baht cash

Now the goal post are moving: Small banks where loan officers are empowered and comfortable with the customer would typically approve loans with gold as collateral of up to 70% of current market value

My initial answer to the OP was spot on. No bank will allow the customer an obvious win/win situation
as market conditions change. Nice try though! =D> Next.

Cheers!

Ok, you get a cookie on a technicality. But ONLY on the technicality that I posted 1 million loan for 1 million collateral. The numbers are irrelevant to the point. The point of the post is summed as: "Will banks accept gold as collateral for a loan?" The answer is "yes". The qualifications are: "perhaps at a small bank, at a discount (not surprising)" The unanswered question is: "Can it be done in Thailand?" I will explore it when I return just out of due diligence, but I do not have high hopes for it.

So, with exceptions noted, you may pat yourself on the back, enjoy your cookie, and I join you with a shout of glee:

Wheeeeeeeeeeeee!

Non-sarcastically speaking, I do welcome and appreciate your feedback. Please keep it coming. Cheers!

[KHONDAHM]

I would think that the bank taking the gold as collateral,would have the right to liquidate it if the price dropped to challenge the balance owed.Once ''put up'' as collateral you would lose control of it other than to sell and retire the loan!

It sounds logical, but just as a bank would not force a liquidation of land if the land loses value over time (see current US housing crisis), they would not (normally) do so for any other asset class held as collateral. Primarily because they do NOT own the asset pledged. They just put a lien on it or take possession of it. They may, however, require that additional assets be pledged to make up any shortfall if the original asset loses value.

The fact that they cannot put a lien on it is the problem big banks have with accepting gold (not in their policy manual, so loan officers won't do it). Small banks are more open to taking possession in lieu of a lien.

[pompui]

So keep us uptodate Khondahm if Thai Banks are willing to go down this route for lending against Gold as we all appreciate that in instances in Western countries this may be an option.
When are you going to the supposed 'higher up' in the chain in the Thai Banks to find out?

[KHONDAHM]

So keep us uptodate Khondahm if Thai Banks are willing to go down this route for lending against Gold as we all appreciate that in instances in Western countries this may be an option.
When are you going to the supposed 'higher up' in the chain in the Thai Banks to find out?

I hoped to be back in January, but something came up; so perhaps I will be able to post a follow-up in February if someone else does not beat me to it.

Cheers!

[KHONDAHM]

FYI - if anyone is interested. It IS possible to rollover/renew a 6 month loan from http://www.cfccoinloans.com INDEFINITELY and without new fees. I would imagine the caveat is that the fixed rate they offer is only fixed for the 6 months and may go up upon renewal. But, it is an option to tap the equity in your gold holdings without selling it outright.

Promotion: http://www.cfccoinloans.com/downloads/a ... .09-LR.PDF