KB Kookmin and NH Nonghyup Join Forces... 5 Major Banks Lower Jeonse Loan Barriers

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-seop] KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup Bank, the five major banks, have decided to lift the regulations on jeonse loan limits that they had maintained to slow down the increase in household debt.

According to the financial sector on the 23rd, KB Kookmin Bank will change the jeonse loan limit to "within 80% of the existing deposit (jeonse price)" when renewing lease (jeonse) contracts starting from the 30th. Originally, borrowers could only borrow the lesser amount between the increase in jeonse price and 80% of the deposit. The application period for jeonse loans will be extended to after the payment date, and non-face-to-face jeonse loans for one-homeowners will also resume.

On the same day, NH Nonghyup Bank announced plans to increase the loan limit to "within 80% of the deposit stated in the contract" when renewing jeonse contracts starting from the 25th. Nonghyup Bank had already implemented measures this year to allow "jeonse loan applications after the payment date" and "resumption of non-face-to-face jeonse loans."

As a result, all five major domestic banks have eased regulations on jeonse loans. Previously, starting with Woori Bank, Hana Bank and Shinhan Bank announced measures such as loan processing after the contract payment date and handling loans within 80% of the deposit upon jeonse renewal.

The easing of jeonse loan regulations comes about five months after banks strengthened the operational standards for jeonse loans last October to curb the increase in household loans.

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