Personal Business Loan Refinancing Begins... Major Banks and Internet-Only Banks Compete on Rates and Benefits

Banks Offer Refinancing Rates Starting from 3-4%
First Month Interest Support and Promotional Events Draw Attention

Starting March 18, personal business owners in South Korea can now refinance their credit loans online via mobile applications and other digital services, triggering full-fledged competition among banks. Each bank is highlighting factors such as loan limits, lower interest rates, platform integration convenience, and promotional events as their key selling points.

According to the banking sector on March 18, the five major commercial banks (KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank) have launched personal business loan refinancing services designed to ease the financial burden on small business owners.

This service was established in line with the Financial Services Commission’s implementation of the "Personal Business Owner Credit Loan Refinancing" program. The Financial Services Commission has been promoting this service to help alleviate financial costs for small business owners, with 18 banks and platforms participating. The refinancing products introduced by each bank have distinct features. Each bank offers different maximum limits, minimum interest rates, preferential interest rate application policies, and benefits, drawing attention from borrowers.

This move is understood as an effort by banks to expand their small and medium enterprise (SME) and small business owner customer base, as the growth of household loans has been restricted due to financial authorities’ strengthened household debt management policies.

From first-month interest support to insurance services... Fierce competition among commercial banks to attract customers

Since 2018 until June this year, a total of 14,426 automated teller machines (ATMs) have been removed from banks over approximately six years. On the 24th, ATMs from commercial banks are installed on a street in downtown Seoul. Banks are rapidly removing ATMs citing maintenance costs such as ATM management and heating and cooling expenses. Photo by Yongjun Cho jun21@

KB Kookmin Bank is now offering personal business credit loan refinancing up to 300 million won (200 million won for non-face-to-face applications). For in-person applications, borrowers can choose from around 17 products to find the most favorable terms, while non-face-to-face applicants can switch to the KB Small Business Owner Credit Loan. The minimum interest rate for non-face-to-face products is 3.61% per year. KB Kookmin Bank is offering a 0.3% preferential interest rate for this loan and will run a special event through May 15. All customers who refinance their loans to KB Kookmin Bank using the non-face-to-face loan transfer service will receive up to 100,000 won in cash support for the first month’s interest payment.

Shinhan Bank’s personal business owner credit loan refinancing product offers a maximum limit of 100 million won, with a minimum annual interest rate of 4.43% (as posted on its website in January); for non-face-to-face applications, the rate is 5.82%. The bank also plans to allow borrowers to increase refinancing amounts to access additional funds after repaying existing loans. For new customers using the refinancing service, starting April 1 and through June 3, the first 300 customers will receive a BBQ Golden Olive Chicken mobile coupon. The service is available via platforms such as Shinhan SOL Bank, Naver Pay, and Toss, which offer loan comparison features.

The "Hana The SOHO Credit Loan" newly launched by Hana Bank allows borrowers to apply for increased limits up to 100 million won, with a minimum interest rate of 4.363% per year as of March 18 (variable interest rate applies). Hana Bank will also provide users of the product with free cyber financial crime compensation insurance from Hana Insurance.

Woori Bank is emphasizing customized preferential interest rates and unlimited loan limits. However, for non-face-to-face applications, the refinancing limit is up to 100 million won. As of March 5, the minimum annual interest rate posted on the bank’s website is 3.96%. Woori Bank is offering 1,000 won in Naver Pay (Npay) points to the first 2,000 people who check their personal business owner credit loans from other financial institutions, and will enter 100 customers who successfully complete refinancing with Woori Bank into a drawing to win a Shinsegae gift certificate worth 50,000 won.

NH Nonghyup Bank also allows personal business owners to refinance up to 100 million won non-face-to-face, with a minimum annual interest rate of 4.86%. From March 18 through April 30, the bank is running a first-month full interest support event. NH Nonghyup Bank offers loan rate comparison and refinancing services via its proprietary application, All One Bank, and loan comparison platforms (Naver Pay, Kakao Pay, Toss). Customers who sign up for All One Bank for the first time and participate in the event will be entered into a draw, with up to 1,000 winners receiving a Starbucks Americano coupon. For those who complete refinancing, 10 customers will be selected to receive full support for their first month’s interest, while others not selected in the drawing will receive up to 200,000 won in NH Points for their first month’s interest payment.

Internet banks also launch products simultaneously... KakaoBank and K Bank offer maximum limits of 300 million won

Internet-only banks also launched personal business owner credit loan refinancing products on March 18. KakaoBank now allows refinancing up to 300 million won, with minimum interest rates in the 3% range. Refinancing to a KakaoBank product provides up to 0.6 percentage points in preferential rates, and customers already using the "KakaoBank Business Hyundai Card" receive an additional 0.4 percentage points. Customers with personal business owner credit loans from other banks who switch to KakaoBank can receive 2,000 won simply for checking their limit, and receive 50,000 won cashback if they execute a refinancing over 50 million won. This promotion runs through June 30.

K Bank has set its refinancing rate for small business owner credit loans at a minimum of 4.10% per year (as of March 18), with a maximum limit of 300 million won, to reduce interest burdens for small business owners and the self-employed. Even if the outstanding balance of an existing loan exceeds 100 million won, refinancing is possible. K Bank also supports increased-limit loans, allowing borrowers to secure additional funds when refinancing, and offers its own personal business real estate loan refinancing. K Bank’s "Business Owner Loan Refinancing" page uniquely provides a non-face-to-face personal business real estate mortgage refinancing product, with minimum rates starting at 3.24% per year and loan amounts up to 1 billion won within the scope of existing collateral loans.

Toss Bank also released two refinancing products on March 18. The refinancing loan for professionals is available up to 500 million won within the existing loan balance (minimum annual interest rate of 3.76%), while the personal business owner credit loan refinancing is available up to 100 million won (minimum annual interest rate of 4.27%). Both products allow borrowers to choose between a bullet repayment at maturity or equal principal and interest installment repayments. The loan period for bullet repayment is one year (extendable up to 10 years), and for installment repayment, borrowers can choose between one and five years. There are no prepayment penalties, and rates are variable based on AAA-rated financial bonds.

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