HUG to Cut Jeonse Loan Special Guarantee Fee Rate by 38% Starting Next Month
[Asia Economy Reporter Moon Jiwon] The Korea Housing & Urban Guarantee Corporation (HUG) announced on the 26th that it will reduce the special guarantee fee rate for jeonse loan guarantees by 38% starting next month to ease the burden on tenants seeking to borrow jeonse funds.
The special guarantee for jeonse loans is a product where HUG takes responsibility for repayment if a tenant who has borrowed jeonse funds from a financial institution fails to repay the principal and interest. Financial institutions handle this in connection with the HUG Jeonse Deposit Return Guarantee as a Jeonse Safe Loan Guarantee.
Starting from the 2nd of next month, when applying for the HUG Jeonse Safe Loan Guarantee to borrow jeonse funds, HUG will reduce the guarantee fee rate for the special jeonse loan guarantee from the current annual 0.05% to 0.031%, a 38% reduction.
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Lee Jaekwang, President of HUG, explained, "This reduction in the guarantee fee rate will alleviate the cost burden on tenants when taking out jeonse loans," adding, "We expect it to provide practical help in stabilizing housing for low-income households."
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