From July, Jeonse Loan Interest Rates Will Be Comparable

Published 14 Jul.2023 10:26(KST)

Starting on the 28th, the Bankers Association website will allow users to compare jeonse loan interest rates by bank at a glance.

According to the Bankers Association on the 14th, the current disclosure of the interest rate spread (the difference between deposit and loan interest rates) will include balance-based interest rate spreads to enable a comprehensive comparison of each bank's interest margin characteristics. Additionally, while household loans were previously disclosed by categorizing them into mortgage loans, credit loans, and overdraft loans, jeonse loan interest rates will now also be disclosed by bank.

Furthermore, in addition to the existing disclosure based on new loan amounts, the interest rate spread based on the balance of all loans and deposits held by banks at the end of the previous month will be newly disclosed. The Bankers Association stated that balance-based interest rates will also be added for various loan products such as mortgage loans and credit loans.

Moreover, fixed deposit interest rates will be disclosed in more detail. The most popular products among financial consumers, such as 1-year maturity products and products with maturities under 1 year, will be separately disclosed, and interest rates for household fixed deposits among 1-year maturity fixed deposits will also be disclosed separately. A Bankers Association official said, "Through this, it is expected that the average interest rate level of 1-year maturity fixed deposits, which are the most commonly handled deposit products at banks, will be comparable between banks."

The Bankers Association has also changed the disclosure dates. Considering the usual end-of-month schedule for the Bank of Korea's interest rate spread disclosures, interest rates will be disclosed by the end of each month. This year, interest rates will be disclosed on July 28, August 30, September 27, October 27, November 28, and December 27.