Even High Credit Borrowers Can Get Card Loans... 3% Card Loan Released
KB Kookmin Card Applies Minimum 3.9% Interest Rate on Card Loans Starting This Month
[Asia Economy Reporter Ki Ha-young]Card loan products with interest rates in the 3% range have appeared for middle- and low-credit borrowers who primarily use card loans. It is interpreted that card companies launched these products targeting the demand from high-credit borrowers who are blocked from loans due to restrictions on loans from first-tier financial institutions such as banks.
According to the Credit Finance Association on the 19th, KB Kookmin Card announced earlier this month that it will apply a minimum interest rate of 3.9% on card loans (long-term card loans).
Following some card companies such as Woori Card and Lotte Card lowering card loan interest rates to the minimum 4% range last year for high-credit borrowers, card loan interest rates have dropped to the 3% range this year. As a result, the interest rate gap with credit loans from commercial banks has narrowed to as little as 1 to 2 percentage points.
The card industry believes that last year, high-credit borrowers seeking funds for real estate acquisition and stock investments became interested in card loans as they were unable to obtain loans from first-tier financial institutions such as banks due to tightened loan regulations by authorities. It is said that card companies launched low-interest card loan products targeting this demand.
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Generally, card loans are high-interest loan products with an average interest rate of 14%. However, in the case of Woori Card, which has been offering card loans at a 4% interest rate to high-credit borrowers since August last year, the interest rate applied to users in the top 1 to 2 grades out of 10 credit grades (standard grades) in January this year averaged 5.94%. The proportion of card loan users who received interest rates below 10% also reached 41.13%. This indicates that high-credit borrowers have flocked to card loans.
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