"Only for Diligent Debt Restructuring Participants"...Special Loans at 3?4% Interest Start Today

Saedo-Yak Loan Agreement Ceremony Held
Eligible for Those Repaying for Over Six Months After Arrears Before June 2018
Maximum Loan Limit Set at 15 Million Won

The "New Leap Loan," a special loan program for individuals who have diligently repaid their debts through debt restructuring, will officially launch today. This program provides up to 15 million won in loans at commercial bank-level interest rates (annual 3-4%) to individuals who experienced loan delinquency seven years ago, underwent debt restructuring, and have consistently made repayments. This initiative was introduced following recommendations that incentives should also be provided to diligent debt restructuring participants during the establishment of the so-called "bad bank."

The Financial Services Commission and the Credit Counseling & Recovery Service (CCRS) held a signing ceremony at the CCRS headquarters on the 14th to support the "New Leap Loan," a special loan for those who have fulfilled their debt restructuring obligations. The ceremony was attended by the Vice Chairman of the Financial Services Commission, the Chairman of CCRS, representatives from SGI Seoul Guarantee, and the heads of six major banks (KB Kookmin, Shinhan, Hana, Woori, NongHyup, and IBK Industrial Bank).

The New Leap Loan is available to individuals who experienced delinquency before June 19, 2018, and who, after undergoing debt restructuring (through CCRS, courts, or financial institutions), have been repaying their remaining debt for at least six months. The interest rate is set at 3-4% per annum, comparable to unsecured bank loans, with a maximum loan limit of 15 million won per person. Repayment is structured as equal principal and interest installments, with no grace period. Borrowers may repay early at any time during the maximum five-year loan period without incurring any fees.

The Financial Services Commission estimates that there are approximately 290,000 individuals who, after experiencing delinquency seven years ago, have been repaying their remaining debt for more than six months through debt restructuring. Among them, about 28.8% (84,000 people) are expected to apply for the program.

Applications for the New Leap Loan can be submitted starting today at "People's Financial Support Centers" nationwide. In addition to basic documents such as income verification and resident registration certificates, applicants must provide documentation confirming delinquency before June 19, 2018, and proof of at least six months of compliance with debt restructuring. Counseling appointments and guidance on required documents can be arranged through the CCRS website or call center.

During loan consultations, applicants will also be offered information on various self-sufficiency support programs, such as job placement and welfare assistance, which they may not have previously known about or accessed.

Kwon Daeyoung, Vice Chairman of the Financial Services Commission, stated, "The New Leap Loan is a special loan with a 3-4% interest rate for those who experienced delinquency seven years ago but are already repaying their debts through debt restructuring and thus could not benefit from the New Leap Fund. By providing low-interest loans to debt restructuring participants, we expect to offer significant support for the recovery of vulnerable groups."

He added, "The remaining funds (about 100 billion won) from the Long-term Small Delinquency Support Foundation, which was established by the financial sector for debt restructuring, will be used as the operating resources for the New Leap Loan. We will continue to strengthen inclusive finance efforts so that vulnerable people in our communities can get back on their feet."

Lee Jaeyeon, Chairman of CCRS, commented, "Although the New Leap Fund is intended to support those struggling with debt, its limited eligibility inevitably leaves some in blind spots. Through the New Leap Loan, we will actively support those who are currently repaying their debts after restructuring."

He continued, "A special debt restructuring program, offering the same level of support as the New Leap Fund for those delinquent for more than five years, will also be fully implemented starting today. We will actively inform the public about these new measures."

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