"Mortgage Loan Interest Rates Differ Between Inquiry and Execution Dates: Important to Note"

Financial Supervisory Service Discloses Consumer Complaints Related to Bank Loans

Mr. An recently applied for a mortgage loan at an internet-only bank. The interest rate he checked at the time of application was in the 3% range, but the bank notified him of a higher loan interest rate in the 4% range. On the actual loan execution date, an even higher interest rate was presented. Mr. An filed a complaint with the Financial Supervisory Service (FSS), stating that he had no choice but to take the loan as the payment deadline was approaching and it was difficult to explore loans from other banks.

The mortgage loan interest rate is determined by adding a margin rate to the base interest rate and then subtracting any preferential rates. Since the mortgage loan interest rate reflects the base rate on the loan execution date, it can differ from the expected rate at the time of inquiry due to fluctuations in the base rate, so caution is required.

The Financial Supervisory Service analyzed recently received and processed complaint cases and on the 8th provided guidance on eight points consumers should be aware of when using bank loans.

When obtaining a jeonse loan, if a trust registration is set on the leased property, it is essential to confirm loan conditions such as whether the trust company’s consent is obtained. Ms. Seo, a tenant, applied for an extension of her jeonse loan at a bank but was rejected. This was because the leased property had a trust registration, and the prior consent forms from the trustee (trust company) and the primary beneficiary (financial institution) regarding the lease contract were missing. When the original owner (trustor) entrusts the property to a trust company, ownership of the property transfers to the trust company, so caution is necessary.

Even if repayment occurs more than three years after receiving a mortgage loan, if the original loan amount was increased, an early repayment fee may be charged. Mr. Jeong took out a mortgage loan in July 2020 and increased the loan amount in July last year. He repaid the loan in January, and the bank imposed an early repayment fee. Generally, early repayment fees disappear after three years from the loan date, but this does not apply if the loan amount was increased. This is because increasing the loan amount during the loan period is not considered the same contract as the original.

If the loan maturity date arrives during an overseas stay, it is important to check in advance whether the maturity can be extended to avoid disadvantages from delinquency. When traveling abroad, if a mobile phone is temporarily suspended and an unused email address is registered in the customer information, the borrower may not receive maturity notifications and suffer disadvantages. According to the bank’s basic credit transaction terms, the debtor must immediately notify the bank of any changes to the registered address, phone number, or email address. If the bank sends notifications to the registered email address and the transmission is successful, it is considered delivered, so it is essential to register an email address that is actively used.

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