Flat rate for leasing barred

The government plans to abolish use of the flat rate interest calculation in the leasing business, seeking to ensure fairness for borrowers.

- WICHIT CHANTANUSORNSIRI

According to Kittiratt Na-Ranong, an adviser to the government's committee tasked with addressing household debt, interest charges in the leasing business, whether for automobile or motorcycle hire-purchase, should be calculated using an effective interest rate instead of the flat rate method that charges interest on fixed principal.

The committee is expected to address eight categories of household debt, including debt with financial institutions, informal debt, credit card debt, teacher loans and student loans.

Mr Kittiratt, a former finance minister, said this proposal and other household debt relief measures will be submitted soon to the prime minister for consideration.