<기사제목>Korea P2P Finance Association: "Interest Rate Reduction for Loans with Over 20% Interest if Repaid Diligently"

Over 51,000 Beneficiaries... Annual Interest Savings of 18.7 Billion KRW
Applicants for Interest Rate Reduction Must Apply Directly via Phone or Counter

[Asia Economy Reporter Song Seung-seop] The loan industry plans to reduce the interest burden on borrowers with good repayment records following the reduction of the legal maximum interest rate.

According to the Korea Loan Finance Association on the 12th, 18 member loan finance companies plan to lower the interest rates for borrowers who have been repaying diligently.

The target borrowers are those who have loan interest rates exceeding 24% per annum and have been repaying faithfully without delinquency. If the delay in payment for each principal and interest installment is less than 5 days, it is not considered delinquency. When a borrower applies for an interest rate reduction, after a certain review, the contract will be renewed with an interest rate within 20% per annum.

The legal maximum interest rate was lowered from 24% to 20% on the 7th. In principle, the reduced maximum interest rate is not applied retroactively to existing borrowers.

As of last month, about 51,000 borrowers at 18 loan companies have been faithfully repaying loans with interest rates exceeding 24%. The loan amount totals approximately 237.2 billion KRW. The industry expects that the voluntary interest rate reduction will result in an annual interest saving effect of up to 18.7 billion KRW.

Customers wishing to have their interest rates reduced must apply directly via phone or at a branch.

Im Seung-bo, chairman of the Korea Loan Finance Association, emphasized, “Member companies have voluntarily joined the interest rate reduction to ease the interest burden on long-term diligent borrowers,” and added, “We will strive to ensure that the government’s selection and support policies for excellent loan companies in the low-income finance sector proceed promptly to facilitate smooth funding for low-credit borrowers.”

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