Ordinary vs Syndicate Loan: A must for first-time buyers
"I'm a first-time buyer, which kind of loan should I go for in buying my first house or condo?'
Before you go out and buy a house and condo for yourself or a loved one, one factor you cannot skimp out on is getting a LOAN, due to prices of houses and condos. In particular, there are two types of loans: Ordinary loans and Syndicate loans, both of which are vastly different from one another.
Today, PropertyScout will be walking you through these two different types of loans along with the terms and conditions and how you will benefit from them.
What is a Real Estate Loan?
A real estate loan, as the name suggests, is a loan which is dedicated to buying various types of real estate properties such as houses, condos, or apartments. Most reasons for requesting a real estate loan are for personal causes or simply just looking for a house or condo to live in, though there there have been quite a few real estate loans requested for investment purposes as well.
Real Estate Loans are also very much common among buyers due to the amount of time they have to fulfill the necessary installment payments.
Ordinary Loan
An ordinary loan is the most basic type of real estate loan, done by one single buyer or investor. Essentially the run up the mill loan, one would need at least 40% of their monthly income to request for a lone. An ordinary loan may also be accompanied by a guarantor, who is the person that guarantees and confirms the loan in which the buyer does not have to pay with the debtor themselves.
A difference from syndicate loan is that guarantors' securities can't be taken as a co-borrower. That doesn't mean, however, that no money would be spent in an ordinary loan. Instead, the guarantors help confirm (on behalf of the buyers) that the buyers will be able to pay accordingly. If the buyer fails to make the payment, however, the bank can return the money to the guarantor.
Amount of money you can loan
The amount of money from the bank loan you will get is based on your income, which is 40%.
Total Monthly Income(40%) = Amount of money you can loan
Terms & Conditions
The terms & conditions may vary depending on the bank, but most will require a minimum monthly income of at least 15,000 baht and above, followed by a career period (6 months and above), and must be between 20-70 years old.
Syndicate Loan
A syndicate loan is a trusted collaborative loan (typically between two individuals, no more than three, due to concerns of excessive debts) with help from a professional, due to not needing to be done by one's self only, allowing for problems to be worked out by the professional. Credits are easier to get approved and can even be requested higher.
Benefits of a Syndicate Loan
- You can request for a higher credit limit.
- You won't be unnecessarily burdened alone.
- You can get your credit approved much easier.
Amount of money you can loan
The amount of money from the bank loan you can get is based on the income of both the buyer and guarantor, which is 40%.
First person's Total monthly income(40%) + Second person's Total monthly income(40%) =Amount of money you can loan
Terms & Conditions
For business owners, one's monthly income must be at least 15,000 baht and above, followed by a career period (6 months and above), and must be between 20-70 years old. As for the person requesting for the loan, one must be a family member or at least related (spouse, or sibling).
Pros & Cons
| Syndicate Loan | Ordinary Loan | Note | |
| Installment payment/Shared payment | Yes | No | - |
| Easy approval | Yes | No | - |
| Loan contract termination | May/May Not | May/May Not | Depends on the bank |
| Guarantor | No | Yes | - |
| Must be family-related only | Yes | No | Or related as spouse/sibling |
| Satisfaction-based | No | Yes | - |
| No approval needed | No | Yes | - |
| All responsible | Yes | No | - |
Additional suggestions
| Syndicate Loan | Ordinary Loan | |
| Recommended for | Anyone who needs an additional helping hand | Anyone who can pay on their own |
| Money you can get from the loan | 40& of income (both) | 40% of income (sole benefit) |
| Ownership | Depending on the deal between the two individuals | The one requesting for the loan |
Conclusion
As you can see, both types of loan have their positives and negatives. One may prefer a syndicate loan due to more benefit, while some may prefer an ordinary loan for decision-making convenience, it really depends on the preference of the individual who requests for the loan as to which method is more appropriate or which method is the less costly of the two.
If you have any further questions and concerns regarding requesting for a loan or if you're just looking to rent, buy, or sell a property, please get in touch with us. Our property consultant team will be very happy to help answer your questions and concerns.
