Refinancing Available for 'Judaemdae and Jeonse Loans'... Applications Open from December

Expansion of Debt Consolidation Loans to Include Mortgage and Jeonse Loans Following Personal Loans
Mortgage Loans Limited to Apartments, All Jeonse Loans Eligible for Consolidation
Application Processing Takes 2 to 7 Days

On the 14th, in a real estate-dense shopping area in Songpa-gu, Seoul, where the decline in real estate prices and the transaction freeze phenomenon continue, apartment listings with market prices are posted. Photo by Kang Jin-hyung aymsdream@

As early as the end of this year or the beginning of next year, mortgage loans (hereinafter referred to as "mudamdae") and jeonse deposit loans (hereinafter referred to as "jeonsedae") will also be able to be switched on the spot after comparing with other bank products on existing interest rate comparison applications. In the case of mudamdae, it applies to housing purchase funds and living stabilization funds for apartments nationwide. Jeonsedae can be refinanced regardless of the type of housing.

On the 25th, the Financial Services Commission announced this through a briefing on the "Expansion of Refinancing Loan Infrastructure." Refinancing loans mean switching loans to ones with lower interest rates. Until now, people had to visit banks directly to refinance. The core of this service is to allow easy refinancing through interest rate comparison apps such as Toss, Naver Pay, Kakao Pay, and Finda.

Shin Jin-chang, Director of the Financial Industry Bureau at the Financial Services Commission, said, "19 loan comparison platforms and 32 financial companies have expressed their intention to participate," adding, "Not only banks but also insurance companies, savings banks, and credit specialized companies that handle many mortgage loans will participate." As of the end of June, the outstanding balance of mudamdae was about 770 trillion KRW, and jeonsedae was about 200 trillion KRW. The Financial Services Commission estimated that the outstanding balance of apartment mudamdae is about 500 to 550 trillion KRW.

Looking specifically at the refinancing targets, in the case of mudamdae, it applies to housing purchase funds and living stabilization funds for apartment mortgage loans. Interim payment loans and final payment loans are not included. The special Bogeumjari Loan operated by the Korea Housing Finance Corporation is also excluded. Villas and officetels are also excluded from refinancing loans. Director Shin explained, "When a refinancing loan application is submitted, the loan limit and interest rate must be presented in real time, but since market price inquiries for collateral evaluation are immediately possible only for apartments, this decision was made," adding, "It is difficult to implement loan transfers for multi-family or row houses."

Real estate stock photo / Photo by Mun Ho-nam munonam@

However, in the case of jeonsedae, there are no restrictions by housing type or loan product, and all jeonsedae are eligible for refinancing loans. This measure is based on the assumption that jeonsedae borrowers generally have lower income levels than mudamdae borrowers, aiming to reduce the financial burden on jeonsedae borrowers as much as possible. Director Shin explained, "Most jeonsedae loans are based on guarantees from the Housing and Urban Guarantee Corporation (HUG), Korea Housing Finance Corporation, and SGI Seoul Guarantee," adding, "The deposit is more important than the housing price, and this can be immediately confirmed by looking at the lease contract, so refinancing loans are possible for all jeonsedae."

However, considering the inherently lengthy screening process for mudamdae and jeonsedae, it is expected to take about 2 to 7 days even if refinancing loan applications are made through apps. Director Shin explained, "It takes a long time because there is a lot of verification information and documents to submit, such as loan regulations, housing, and lease contracts." Customers who applied for refinancing loans through the app but wish to visit a branch can also inquire about the screening process at the branch.

Meanwhile, looking at the performance of the one-stop refinancing loan service, which started first for unsecured loans on May 31, a total of 67,384 cases (loan assets worth 1.5849 trillion KRW) were transferred as of the 15th of this month. Director Shin stated, "The total interest savings amount exceeds 300 billion KRW, and the average interest reduction is 1.5 percentage points."

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