contract between a borrower and a lender of money detailing the conditions for a loan

Loan Agreements in Thailand

(Thai–English)

Legal basis

Financial loans in Thailand are governed by sections 640–656 of the Civil and Commercial Code. Key points for private loans between individuals:

• Written evidence required: Any loan over THB 2,000 must be supported by written evidence signed by the borrower (loan agreement). Otherwise, the loan cannot be enforced in court
• Maximum interest rate: Interest on private loans may not exceed 15% per year. If a higher rate is agreed, it will automatically be reduced to 15%.
• Compound interest: Charging interest on unpaid interest is not allowed, unless the unpaid interest has been outstanding for at least one year and both parties agree in writing to add it to the principal.
• No registration required: A simple written agreement is sufficient. Notarization or registration is not required for an unsecured personal loan.

This framework applies to private one-to-one lending, for example, between a foreign lender and a Thai borrower.

Private, one-to-one lending (individual to individual) is typically covered solely by the civil and commercial code. Best practice is to use a bilingual Thai–English loan contract that clearly states principal, interest (≤15% p.a.), payment schedule, default terms, and Thai law as the governing law. Even private lenders should follow Thailand’s Debt Collection Act (no harassment or unfair practices).

Commercial or professional lending (non-bank lenders) is a regulated activity. If you lend regularly or to the public, you may fall under Bank of Thailand (BOT) supervision and Ministry of Finance rules. This can require licensing/notification, compliance with BOT interest and fee caps, Consumer Protection and Unfair Contract Terms rules, Thai-language contracts for consumers, and PDPA obligations for customer data.

In short:

• Private one-to-one loans → Civil and Commercial Code rules, 15% cap, written evidence required.
• Business lending → BOT-regulated with additional licensing and consumer-law duties.