Thanks to Non-Face-to-Face Service and 2% Interest Rate... K-Bank's Jeonse Loans Surpass 600 Billion Won in 6 Months

Monthly Increase of 100 Billion Won
Over 80% Share of the 2030 Generation
Popular Among Single-Person and Newlywed Households

[Asia Economy Reporter Minwoo Lee] K-Bank's Jeonse loan has surpassed 600 billion KRW within six months of its launch. Amid a surge in Jeonse demand during the moving season, the competitiveness is attributed to the 100% non-face-to-face process and interest rates in the 2% range.

On the 23rd, K-Bank announced that since launching two products, Jeonse Loan and Youth Jeonse Loan, simultaneously in September last year, the total amount exceeded 600 billion KRW within six months. After surpassing 100 billion KRW in November last year, it rapidly increased to 300 billion KRW in January and 500 billion KRW in February this year.

The simplified and convenient loan procedure was analyzed as a key factor. K-Bank's Jeonse loans are conducted 100% non-face-to-face, allowing loan disbursement even on weekends and holidays. While traditional banks required submission of about ten types of related documents for face-to-face loans, K-Bank simplified this to the lease contract (with a confirmed date mandatory) and the deposit receipt (at least 5% of the deposit). Applicants can complete the application in about two minutes by photographing these two documents with a smartphone and submitting them via the application (app). The absence of separate prepayment penalties was also cited as an advantage.

Competitive interest rates were another popular factor. According to last month's Financial Supervisory Service statistics, K-Bank's Jeonse loan interest rate was 2.90% per annum, the lowest among internet banks and all financial sectors. Based on last month's Jeonse loan interest rates disclosed by the Korea Housing Finance Corporation, K-Bank's average was 2.80% per annum, below the average 3.56% of the five major commercial banks. As of this date, K-Bank's Jeonse loan interest rates range from 2.88% to 4.40% per annum, and Youth Jeonse Loan rates range from 2.48% to 2.66%, the lowest in the industry.

Among Jeonse loan customers, those in their 20s and 30s accounted for an overwhelming 82.6%. Single-person households made up 43.3%, and newlyweds accounted for 13.2%. By region, the metropolitan area had the highest proportion of customers at 63.0%. By occupation, office workers accounted for 83.6%.

K-Bank's Jeonse loan is available up to a maximum of 222 million KRW for customers who are wage earners or business income earners, with a combined spousal status of no home ownership or ownership of one home. Even for those with one home, loans are available if the combined spousal annual income is below 100 million KRW and the market price of the owned home is below 900 million KRW. The Youth Jeonse Loan is available up to 100 million KRW for no-home-ownership individuals aged 19 to 34 with a combined spousal annual income of 70 million KRW or less.

A K-Bank official said, "The combination of loan convenience and competitive interest rates has made Jeonse loans very popular among young newlyweds and single-person households," adding, "We will continue to strive for customer satisfaction by discovering competitive products."

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