Toss Bank CEO's Large Debt Refinancing, Cumulative Supply Amount Approaching 250 Billion Won

Toss Bank announced on the 29th that the cumulative supply amount of the 'Sajangnim Debt Refinancing Loan' is approaching 250 billion KRW.

Launched in September 2022 as the first internet-only bank product in collaboration with the Korea Credit Guarantee Fund, the 'Sajangnim Debt Refinancing Loan' is part of a low-interest refinancing program for small business owners. Small business owners can refinance high-interest loans above 7% into lower interest rates in the 5% range. The loan term is up to 10 years, with a maximum limit of 100 million KRW.

According to Toss Bank, a total of 4,300 customers have used the refinancing loan so far, with an average refinancing amount of 52.27 million KRW per person. Additionally, the loan term, initially up to 5 years, has been extended to 10 years. After a 3-year grace period, equal principal repayments are made over 7 years, reducing the monthly payment burden.

The interest rate applies a fixed rate of up to 5.5% for 2 years (5.0% in the first year), and thereafter, for 8 years, the agreed rate with a ceiling is applied by adding 2.0 percentage points to the AAA+ rated financial bond rate. Furthermore, Toss Bank supports the guarantee fee for the first year. For a 100 million KRW loan, this saves 630,000 KRW in guarantee fees.

The eligible applicants for Toss Bank's Sajangnim Debt Refinancing Loan are individual business owners whose business loans were first issued by May 31, 2023, and whose interest rates are 7% or higher at the time of application. For example, a customer with an existing loan of 100 million KRW at an annual interest rate of 7% can save up to 2 million KRW in interest per year by refinancing with Toss Bank's Sajangnim Debt Refinancing Loan. If the loan was at an annual interest rate of 10%, the annual interest savings would be approximately 5 million KRW.

Analysis of existing users of the Sajangnim Debt Refinancing Loan by Toss Bank shows that wholesale and retail trade accounted for the largest share at 36%, followed by the restaurant industry (14%) and transportation and warehousing (8%). Small business owners in local commercial districts, who are suffering from the triple hardships of COVID-19, high inflation, and economic recession, have been receiving the most benefits.

A Toss Bank representative said, “Through the Sajangnim Debt Refinancing Loan, more self-employed individuals and small business owners have been able to reduce their financial burdens. We will continue to prioritize coexistence with our customers, practice inclusive finance, and do our best to fulfill the bank’s social responsibilities.”

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