A good education usually requires a hefty initial payment. Many young people will need help in the form of loans to help assure a good future.

Banks not only offer loans to serve this purpose but also provide special interest rates, lower than in normal personal-loan packages. Below are details of some banks' education loans, as well as news of some interesting scholarships.

Siam Commercial Bank offers education loans on a credit line of Bt10,000 to Bt200,000 for educational institutions in Thailand and Bt500,000 for studying abroad. The maximum loan period is set at five years and debt-repayment instalments start only after graduation. Borrowers receive a grace period for two years if they continue studying.

The interest rate charged for the loans varies but does not exceed the 28-per-cent limit of the Bank of Thailand's regulations.

Thanachart Bank has two education-loan packages, Scholar Loan A and Scholar Loan B. The first package provides a grace period and the other one does not. Both packages require collateral in the form of a deposit, a property mortgage or a guarantor. The two packages offer maximum credit lines up to Bt1 million, while the minimum credit limit is set at Bt100,000.

The interest rate depends on the value of the collateral. If the loan is backed by a property mortgage, the rate charged is the bank's minimum lending rate (MLR). In case the collateral is a deposit of 50 per cent of the total loan, the interest rate would be the MLR plus 1 per cent. And in the case of a personal guarantee, the rate would be the MLR plus 3 per cent. The bank's MLR is currently 8 per cent. The bank provides a maximum loan maturity of eight years.

The non-banking company Krungthai Card or KTC also has personal loans for education called KTC Cash Education loans. The consumer-finance firm does not need loan collateral or a guarantor for the loan application. Customers also receive a 50-per-cent discount on loan arrangement fees for students from educational institutions that participate in the company's loan programme.

To support educational opportunities for Thai people, KTC offers low interest rates and credit usage fees on all credit lines at 19 per cent per year. But customers who want to apply for KTC Cash Education loans must earn at least Bt15,000 per month.

Bangkok Bank offers education loans specifically for children of Government Pension Fund (GPF) members for all levels, from kindergarten to doctorate degree. The loans are provided for study both in Thailand and abroad, with credit lines offered at Bt50,000 to Bt500,000.

The bank offers attractive rates for the loan regarding the type of collateral. Borrowers can use the bank's savings or fixed-deposit accounts, a personal guarantee or a property mortgage as collateral.

If they use deposit accounts as collateral, they would get interest charged at the rate of the deposit rate plus 2 per cent per year throughout the loan period. Bangkok Bank's saving rate is at 0.75 per cent, while fixed-deposit rates for 3 to 24 months stand between 3.25 to 3.75 per cent.

For borrowing backed by a personal guarantee or property mortgage, the bank would charge at the minimum retail rate (MRR), which is currently 8 per cent. In the case of borrowing without collateral, the interest rate would be calculated at the MRR for the first year and the MRR plus 0.75 per cent for the second year onwards.

The loan maturity is set up to 96 months or eight years but not longer than the borrower's remaining years before mandatory retirement. The loan is available to GPF members and their children.

Kasikornbank normally provides scholarship every year for master's degrees both in Thailand and overseas. The bank supports scholarships in two programmes mainly, master's of business administration and master's of science in finance, for studying in Thailand. For studying abroad, the bank's scholarship would also be offered in finance, as well as marketing and management.

Krung Thai Bank also offers scholarships for study leading to a master's degree in some field of finance, either in this country or abroad. However, the scholarship recipients of the two banks must comply with the banks' conditions, such as working for the bank after graduation.

Somruedi Banchongduang

The Nation