K-Bank and Regional Banks Also Tighten... Loan Gaps Narrow Further

K Bank Raises Interest Rates on Credit Loans
Kakao Bank Halts High-Credit Overdraft Loans
Regional Banks Also Join in Tightening Loans

[Asia Economy Reporter Kim Hyo-jin] The path to new loans is rapidly narrowing as the year-end approaches. Commercial banks, internet-only banks such as KakaoBank and K Bank, and regional banks have joined in tightening loans following strong pressure from financial authorities to manage the total volume of household loans. It is inevitable that individual business owners, who have high funding demands at the end of the year, will face difficulties in securing funds.

According to the banking sector on the 21st, K Bank raised its credit loan interest rates by 0.2 percentage points to a minimum annual rate of 2.42% starting today. The interest rate on overdraft account loans was also increased by 0.2 percentage points to a minimum of 2.88%. However, K Bank excluded the 'Credit Loan Plus,' which has a strong mid-interest loan characteristic, from the rate hike. Earlier in September, K Bank had already raised credit loan interest rates by 0.1 percentage points and overdraft loan rates by 0.2 percentage points.

A K Bank official explained, "This adjustment reflects market conditions such as interest rate hikes by other banks," adding, "The Credit Loan Plus maintains the current interest rate level as a benefit for mid-credit borrowers." K Bank plans to apply the increased rates without a fixed deadline and will respond flexibly depending on future circumstances. KakaoBank also temporarily suspended new overdraft loans for high-credit salaried workers from the 17th until the end of the year.

Regional banks are also stepping up loan restrictions one after another. Since the 14th, DGB Daegu Bank has suspended major non-face-to-face loan products such as ▲IM Salaried Worker Household Credit Loan ▲Sseudam Sseudam Easy Loan ▲DGB No-Visit Mortgage Loan. Jeonbuk Bank stopped selling ▲BEST Salaried Worker Credit Loan ▲JB Direct Salaried Worker Credit Loan and others starting last month.

Busan Bank reduced the credit loan limit for professionals from 400 million KRW to 300 million KRW last month, and drastically cut the overdraft loan limit from 400 million KRW to 200 million KRW.

Top 5 Banks Also Suspend Loans and Reduce Limits

Major commercial banks have also tightened loans simultaneously by suspending new applications and reducing limits. Shinhan Bank is not accepting non-face-to-face applications for salaried worker credit loans, including the 'Solpyeonhan Salaried Worker Credit Loan,' and has uniformly lowered the credit loan limits for professionals such as doctors and lawyers from 250 million to 300 million KRW per occupational group to 200 million KRW.

KB Kookmin Bank has, in principle, suspended all household credit loans exceeding 100 million KRW and blocked 'interbank refinancing mortgage loans,' which allow switching mortgage loans from other banks to KB Kookmin Bank. Woori Bank has stopped selling its main non-face-to-face credit loan product, 'Woori WON (WON) Salaried Worker Loan.' Hana Bank also plans to drastically reduce the basic credit loan limit for professionals such as doctors and lawyers from 150 million KRW to 50 million KRW as early as the end of this month.

This content was produced with the assistance of AI translation services.