โดย Select Sales Center Property 
What is a home equity loan? If you exchange it for cash, will the house still be there? And what do you need to do to get the money without selling the house?
These questions will be answered with useful information for those who want to apply for a home equity loan. Even if you don’t need a loan right now, knowing about this type of loan may be useful in the future. If you need a lump sum to expand your business or use it in an emergency, you will be able to prepare the documents and apply for the loan in time as needed.
What is a Home Equity Loan?
A home equity loan is a type of secured loan designed for homeowners who want to borrow money in a lump sum by mortgaging their home with a bank and then repaying the loan over an agreed period.
Who is the home loan for cash suitable for?
- Those who have real estate such as a house, townhouse, condo, commercial building, or vacant land that is debt-free (fully paid off) but want a lump sum to use (some banks also offer home loans for cash for real estate that is not fully paid off)
- Those who want to consolidate all debts, such as credit card debt or cash advance debt, and pay only with a home loan for cash because the home loan for cash offers a lower interest rate than a personal loan
- Those who need capital to do business, such as entrepreneurs, and small business owners, have assets in their names and want to use a lump sum to increase their financial liquidity and circulate their business
- Those who want to repair or extend their home, mostly houses that are debt-free and have been in their possession for a long time and want to improve them to suit their current changing lifestyles, such as installing a Solar Rooftop to install an EV Charger for electric cars
Loan amount to be received
In the case that the borrower wants to use the house to exchange for the full price of the house, the borrower will receive a loan amount of approximately 80-90% of the appraised price only. The approval amount will depend on the consideration of each bank.
However, the borrower can request a lower amount than the approved amount. For example, the borrower’s house is appraised at 3 million baht, so the approved amount will be 2.4 million baht, but only 400,000 baht is needed. The borrower can request to borrow as much as they need.
Some banks allow the borrower to choose to receive a long-term (LT) loan or a loan with a fixed repayment period, similar to a home loan, or to choose to receive an Overdraft (O/D) loan. By opening an O/D loan, if it is not used, there is no interest. Or you can choose to receive both types of loans.
Interest to be paid
The highlight of a home loan for cash is the calculation of interest on a reducing balance basis (Effective Rate), similar to a new home, but the interest rate is higher, which is generally at 5% per year or more, or slightly lower than the bank’s announced MRR interest rate. But overall, the interest rate is still much lower than a personal loan without collateral.
Duration of repayment
In addition to calculating the same interest, the repayment period of a home loan for cash is the same as a new home loan. The repayment period can be up to 30 years. However, if you feel that is too long, some banks also allow you to take out a home loan for cash and repay it in a shorter period. However, the interest rate will be different from the long-term repayment period.
Steps for applying for a home loan for cash
- Prepare yourself
Preparing for a home loan for cash is similar to applying for any other type of loan. The borrower must have a good financial history before applying for the loan. If you have a bad history, the bank has a chance of rejecting you. While preparing to build good credit, you should study the loan details of each bank before deciding on the bank that is most suitable for you. - Submit the loan application documents
The borrower must prepare various documents before submitting them to the bank for consideration for a home loan for cash. The required documents are the same as for general loan applications, which can be divided into 3 groups as follows:
Identity verification documents, including a copy of the ID card, a copy of the house registration, and a copy of the name change certificate (if any)
Income verification documents, including a salary certificate, pay slip, and a statement of account for the past 6 months, etc.
Property verification documents, including a copy of the land title deed and a photo of the house used for the loan application - Property appraisal
After submitting the home loan application documents to the bank, the bank will send a representative to assess the condition of the house for which the loan is requested to consider approving the loan amount based on the value of the collateral. At this stage, there may or may not be a house appraisal fee, depending on each bank’s promotion. - The bank considers approval
Once the bank has received all the information, It will take about 1-2 weeks for consideration and notification of approval results along with interest rates to the borrower. At this stage, the borrower will be the one to accept the loan amount or reduce the amount received to just enough for the money needed or choose another bank with a lower interest rate. - Sign the contract and register the mortgage. Once the loan amount and interest rate have been agreed upon, the process of signing the loan contract with the bank will begin. The bank will make an appointment with the borrower to sign the contract and proceed with the land mortgage contract at the land office near the borrower’s house. The borrower will then receive the loan money requested, completing the process.
Expenses for applying for a home loan for cash
Even though it is a loan to receive money to use, a home loan for cash still has expenses that the borrower may have to pay to the bank or land office before receiving the money, as follows:
- Mortgage registration fee of 1% of the loan amount
- Stamp duty of 0.05% of the loan amount
- Property appraisal fee
- Loan application fee
- Fire insurance premium
- Loan protection life insurance premium (if voluntarily applied)
However, some banks have promotions that exempt various expenses for borrowers, which may include the mortgage registration fee, which is the highest among all expenses. However, if you have to pay, don’t worry because most banks usually deduct these expenses before giving the money to the borrower.
Including home loan cash exchange promotions from various banks
| Bank | Interest rate for the first 3 years | The interest rate for the whole contract | Maximum loan amount | Maximum repayment period |
| Krungthai | Starting at 4.50% | 6.34%-6.66% | 20 million baht | 30 years |
| Kasikorn Thai | 5.90% | 6%-11% | 20 million baht | 30 years |
| GSB | 4.840% (first 3 months) | 6.281%-7.345% | 10 million baht | 30 years |
| TMB Thanachart | 66.18% | 6.57%-10.23% | 15 million baht | 30 years |
| Krungsri Ayutthaya | 5.90% | 6.61%-10.30% | 10 million baht | 30 years |
Home loans for cash are currently gaining more attention from consumers. Each bank has launched the following home loans for cash promotions:
- Krungthai Home for Cash Loan, Krungthai Bank
– Easy to borrow by mortgaging your house, condo, commercial building, or land to the bank.
– Use the money to spend as needed, such as for consumption, or renovating your house.
– Even if you are not the owner of the property, you can still borrow.
– Even if you do not have a salary account through Krungthai, you can still borrow.
– Special interest rate, fixed for 3 years, starting at 4.50% per year for the first year.
The interest rate for the entire contract is 6.34%-6.66% per year.
– Maximum loan amount is 20 million baht.
– Maximum repayment period is 30 years. - Home for Cash Loan, Kasikorn Bank
– Use a debt-free house as collateral to mortgage a house, commercial building, or condo.
– You can use your parents’, siblings’, or spouse’s house to apply for a home for a cash loan.
– Regular income, entrepreneurs, and freelancers can also apply for a home for a cash loan.
– In the case of a solo loan Income of 15,000 baht or more, in the case of a joint loan, a combined income of 15,000 baht or more
– Maximum loan amount of 20 million baht
– Special interest rate of 5.90% fixed for the first 3 years
– Interest rate for the entire contract of 6%-11% per year
– Maximum repayment period of 30 years - GSB Home for Cash Loan, Government Savings Bank
– Turn your home into cash for multipurpose expenses, such as consumer goods, paying off other types of retail debts
– Have a fixed income and occupation
– Have an income, must have worked for at least 6 months. Freelancers or business owners must have worked or operated for at least 1 year
– Provide a maximum loan of 90% of the property appraisal value
– Interest for the first 3 months is 4.840% (MRR-2.005%)
– Interest for the entire contract is 6.281%-7.345% per year
– Maximum loan amount per person is not more than 10 million baht
– Maximum repayment period is 30 years
– Be a depositor of the Government Savings Bank’s call deposit type - TTB Home for Cash Loan, TMB Thanachart Bank
– Lump sum, lower interest than personal loans, easy repayment
– Helps reduce burdens, increase liquidity, and consolidate debts Home-Condo installment, can borrow more
– Average interest rate for the first 3 years, starting at 6.18% per year
– Maximum credit limit of 15 million baht, installment period up to 30 years
– Free property appraisal fee-fire insurance premium
– No guarantor required, receive a lump sum, the house is still the same
– Borrow only what is necessary and can be repaid
– Interest rate for the entire contract is 6.57%-10.23% per year - Home loan for cash, Krungsri Home for Cash, Bank of Ayudhya
– For those who have a house or residence that is debt-free, quick approval
– Low interest rate, average interest rate for 3 years 5.90%
– Interest rate reducing principal and interest throughout the contract period between 6.61%-10.30% per year
– Credit limit higher than 85% of the appraised price
– Borrow only as necessary and can be repaid, up to 10 million baht
– Repayment period up to 30 years (the repayment period combined with the borrower’s age must not exceed 65 years)
– Free collateral appraisal fee – mortgage registration fee
Applying for a home loan for cash today is not complicated. The approval period is not long. If the borrower meets the conditions set by the bank, if there is a need for a lump sum, a source of low-interest loans with a long repayment period may be close at hand in the form of a house to live in right now. Please consider carefully before making a decision.
