SLF to wipe loan interest rates, fines

SLF to wipe loan interest rates, fines

The House of Representatives recently passed a bill to amend the Student Loan Fund (SLF) Action on its third and final reading, resulting in interest-free loans for borrowers with no fines for those who default on their repayments.

House Speaker Chuan Leekpai last night chaired a House session to deliberate suggested amendments to Area 44 of the behave which deals with the calculation of interest rates and fines just for defaults.

Four groups of MPs and officials got put forward separate plans.

1 group led simply by Pheu Thai Celebration MP for Lop Buri Ubonsak Bualuangngam backed interest-free financial loans and no fines regarding loan defaulters, whilst another led simply by Democrat Party list-MP Prakob Ratanaphan proposed loans that charge an annual interest rate of 1%.

A third group led by Chumpol Nititharangkul, a representative of the Council of State, proposed loans with an annual interest rate of 2%.

The last group led simply by Move Forward Party list MP Nateepat Kulsetthasit wanted borrowers to pay annual interest of 1% on the loan, with the principal to be paid back in instalments over a period of up to 30 years from when they start earning taxable income.

A majority of 218 lawmakers voted in favour of Mr Ubonsak’s proposal for interest-free financial loans and no fines designed for defaulters.

The House also accepted other provisions of the bill, including Area 24 which was drawn up to provide retroactive benefits for borrowers plus loan guarantors underneath the SLF.

The section stipulates that borrowers and loan guarantors who entered into loan contracts before the bill becomes law would no longer need to pay interest to the loans or any fees.

The House meeting approved the particular bill with an election of 314 in support and 3 against, plus 2 abstentions.

Democrat MP intended for Trang Sathit Wongnongtoei said the SLF is intended to be a revolving fund that needs to be replenished continually when financial loans are taken out therefore it can be readily available to students.

If no curiosity is charged around the loans, the account will no longer fit the description and this may lead to many troubles, he said.

The Liberal Party’s stance is that the SLF must continue to keep serve as a spinning fund and celebrations involved should meet for talks to decide the proper interest rates, Mister Sathit said.

At a meeting of cabinet ministers on Tuesday, Mouthpiece Finance Minister Santi Promphat took purpose at the zero-interest mortgage proposal, saying this could only promote irresponsibility and a lack of financial discipline among borrowers, eventually resulting in the fund being alarmingly depleted, one source said on problem of anonymity.