Faced with a higher cost of living following rising oil prices, many are looking for some extra cash for daily spending or other purposes - and personal loans seem to be the answer.

Although the Bank of Thailand has put an interest-rate ceiling on personal loans at 28 per cent per year, Krung Thai Bank (KTB) is offering special promotional features for its "Krung Thai Thanawat" product.

The first is the interest they have to pay for the first three months, which is charged at the minimum retail rate (MRR) plus only 0.5 per cent a year - 8.5 per cent in total, with KTB's MRR currently at 8 per cent.

Normally, the rate charged on the bank's personal loans is MRR plus 3.5 per cent a year, for a total of 11.5 per cent.

The promotional period runs until August 15.

The second special feature of Krung Thai Thanawat promotional loans focuses on the rate-calculation formula, which is different from that of other institutions.

KTB calculates its interest only when the money is actually taken out, and the charging ends once the loan is repaid.

Other banks link interest payments with the granting of a loan, but KTB's method lightens the burden on its customers. As its charge stands at 8.5 per cent annually, this counts as 0.02 per cent per day. For example, for a customer holding a Krung Thai Thanawat loan for five days,

the rate charged would be about 0.11 per cent of the total credit line.

This is similar to black-market loans with daily interest rates, but shark loans usually imply interest rates far higher than those charged by banks.

KTB's loans are for a maximum of one year, though borrowers with good debt-payment track records can have their contracts prolonged automatically.

The bank pegs its maximum credit line at five to 10 times a borrower's monthly income.

KTB, however, sets more conditions than its rivals. Firstly, at least 15 per cent of a government officer's salary and 25 per cent of a private company employee's earnings are required to be transferred through the bank's pay-roll account.

The bank also insists on personal guarantees. The guarantor must be a borrower's colleague, whose professional position is equal to the applicant's.

KTB also calls for some basic documentation before granting a loan.

But there are other institu-tions providing loans with fewer conditions. Clean loans can be secured without a guarantor, but this involves a higher interest rate.

"Citibank Ready Credit"

offers a revolving credit line

up to Bt750,000 without col-

lateral or guarantor, with customers taking the cash from ATMs or getting lump-sum amounts transferred directly to their accounts.

Borrowers can make minimum monthly repayments of Bt200, or by paying 4 per cent on their outstanding balance, or by paying equal instalments for up to 36 months.

Once a payment is made, the original credit line is returned as part of Citibank's cash-back programme.

Borrowers are charged 11.88 per cent a year for the first four months, with the subsequent rate at 27 to 28 per cent, depending on each customer's credit position. Citibank Ready Credit applicants must earn at least Bt10,000 a month.

Easy Buy, a leading consumer-loan provider, has a special product for women. In its "Lady Campaign" programme, the Japanese-owned firm has an effective interest rate of 2.17 per cent per month, or 26.04 per cent per year.

The product does not call for personal guarantees or collateral. Applicants are required to have a minimum monthly income of only Bt4,000, but some basic documents are required before loans can be approved.

Easy Buy's Lady Campaign is launched today, and runs until the end of August.

Somruedi Banchongduang

The Nation