It can be said that from now on, "financial mistakes" will no longer be just a thing of the past, but will determine how high the interest rates we pay will be.
The latest move by TTB Bank to apply interest rates based on the "credit score" from the National Credit Bureau (NCB) for its personal loan product "Cash2Go" is a clear sign that Thailand’s financial system is seriously entering the era of Risk-Based Pricing. This is not merely a new product but a "financial screening system" that has begun operating, and it is expected that many other banks will adopt this approach for their customers as well.
Previously, personal loan interest rates were set based on multiple factors, especially income level and debt repayment capacity. This meant that customers with lower income, even if they paid well, might still face interest rates close to the 25% ceiling. The new model changes the game as follows:
Good credit = Low risk = Lower interest rates
Poor credit = High risk = Higher interest rates
Thairath Money compared the NCB credit score table where scores range from AA down to HH and are classified into Risk Grades from “Excellent” to “Credit Starter/Need Attention.”
In TTB’s model,
This shows a nearly 11% difference, reflecting the use of "behavior" to determine borrowing costs.
NCB data indicates that "personal loans" constitute the largest debt category among Thais, making up 43% of total debt and spread across all age groups. With an interest ceiling of 25% per year, the burden is heavy.
TTB’s example calculation for a 100,000 baht loan over 72 months:
The difference is 20,888 baht for a 100,000 baht loan; for a 300,000 baht loan, the gap exceeds 60,000 baht. If this model is applied to a 3 million baht mortgage, even a 1% interest difference could amount to several hundred thousand baht over the contract term.
However, interest rate calculation based on credit scores has supporters and critics alike, raising major questions such as:
From the perspective of Dr. Lasamon Attapich, CEO of the Credit Bureau, credit scores are an important tool reflecting an individual's financial discipline and credibility. Using credit scores in the financial system will help those with good repayment histories access better interest rates. Additionally, the public will recognize the importance of maintaining and protecting their credit, which forms a fundamental basis for addressing Thailand’s household debt problem.
It must be acknowledged that, firstly, this is risk-based fairness—those who manage well should receive lower costs. On the other hand, this system might highlight "cost-of-money inequality" more clearly. However, if many banks adopt this, it will become a new standard across the system, supporting efforts to solve household debt and improve national financial discipline. Thailand’s financial sector is shifting from "income as the main factor" to "behavior as the key determinant."
As noted earlier, credit scores reflect our "financial habits."
Based on factors NCB uses to evaluate, such as:
Therefore, immediate actions include...
In summary, this may mark the start of an era where banks use "behavioral data" as the basis for determining borrowing costs. It is highly likely that other banks will follow to manage risk and address household debt problems. When that day comes, interest rates will no longer be a standard figure but a clear reflection of each individual's financial discipline.
Sources: Bank of Thailand, TTB Bank, Credit Bureau
Read personal finance news and financial planning with Thairath Money to help you "Achieve good financial health and a good life"https://www.thairath.co.th/money/personal_finance
Follow the Facebook page: Thairath Money at this linkhttps://www.facebook.com/ThairathMoney