[2021 National Audit] Card and Capital Companies Received 120,000 Interest Rate Reduction Requests... Approval Rate at 60%

Need to Promote Card Companies' Right to Request Interest Rate Reduction

[Asia Economy Reporter Ki Ha-young] It has been revealed that about 60% of the interest rate reduction requests submitted to credit card companies and capital companies, among other specialized credit finance companies, over the past year have been accepted.

According to the "Status of Interest Rate Reduction Requests in the Specialized Credit Finance Industry" submitted by the Financial Supervisory Service to Kim Byung-wook, a member of the Democratic Party of Korea, on the 7th, the number of interest rate reduction requests received by specialized credit finance companies in the past year was 62,137 in the second half of last year and 61,915 in the first half of this year, totaling 124,052. Among these, 75,475 cases, or 60.8% of the total requests, were approved.

The specialized credit finance industry collectively refers to credit card business, facility leasing business, installment finance business, and new technology business finance, with credit card companies and capital companies being representative financial institutions.

Among credit card companies, Hana Card received the highest number of interest rate reduction requests with 29,652 applications, followed by KB Kookmin Card with 20,599. The approval rate by credit card company was highest for KB Kookmin Card at 85.2%, and lowest for Lotte Card at 34.1%. Although the number of requests for capital companies was relatively small, the top 10 companies, including Hyundai Capital with 5,890 cases, received applications at levels similar to those of credit card companies.

Individuals or businesses can request a reduction in loan interest rates if their credit status improves due to employment, promotion, or increase in assets. As household loans increase and interest rates show an upward trend recently, the right to request an interest rate reduction has gained attention. This has been voluntarily implemented by banks and others since 2002 and became a legal right in 2019.

The right to request an interest rate reduction can be applied for not only at commercial banks but also at specialized credit finance companies such as credit card companies, insurance companies, and savings banks. It is a legal right available to individuals as well as self-employed persons and small and medium-sized enterprises. When an individual or business applies, the financial company reviews the request according to internal standards and notifies the applicant of the results.

Assemblyman Kim Byung-wook said, "The right to request an interest rate reduction is a legal right that should be pursued, but many financial consumers are still unaware of the system," adding, "As many borrowers face increased interest burdens due to sudden interest rate hikes, active promotion and guidance regarding the right to request an interest rate reduction by credit card companies are necessary."

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