Six savings banks launch mid-rate lifestyle loans with cap cut to 15.27%

Up to 10 million won per borrower, rate ceiling down 1.24 percentage points

Loans available through online comparison platforms

A new mid-rate lifestyle stabilization loan aimed at low- to mid-credit borrowers has been launched.

The Financial Services Commission said Sunday that six savings banks — KB, OK, SBI, Shinhan, Yegaram and Korea Investment Savings Bank — have begun offering the mid-rate lifestyle stabilization loan.

The product was developed as a follow-up to the "mid-rate loan activation plan" announced in April. It is a mid-rate unsecured loan funded by private financial institutions using their own credit, with the goal of supporting the financial stability of low- to mid-credit borrowers.

Eligibility is limited to borrowers whose credit scores fall in the bottom 50 percent at the time of application — currently defined as a NICE score of 889 or below, or a KCB score of 875 or below. Specific qualification requirements may vary by institution.

The borrowing limit is set at a maximum of 10 million won ($6,480) per borrower across all financial institutions combined. Lenders determine the final limit by comparing the remaining available amount confirmed through the Korea Credit Information Services against their own internal assessment and applying whichever is lower.

Interest rates range from 5.9 to 15.27 percent per annum for the initial participating institutions. The ceiling was set at 15.27 percent — 1.24 percentage points below the previous mid-rate loan cap of 16.51 percent — to reduce the interest burden on low- to mid-credit borrowers.

Because the loan is intended for lifestyle stabilization purposes, restrictions on home purchases apply. Borrowers must sign an agreement not to purchase a home for one year after taking out the loan or until the loan is fully repaid, whichever comes first.

Violators must repay the loan immediately and will be barred from taking out housing-related loans and mid-rate lifestyle stabilization loans for three years. The measure is designed to expand the supply of funds to low- to mid-credit borrowers while blocking speculative capital flows.

Applications can be submitted through each institution's mobile app, branch offices or by phone. Borrowers can also compare rates and apply through online loan comparison platforms including Toss, Kakao Pay, Kakao Bank, Naver Pay, Finda and Banksalad.

The Financial Services Commission plans to bring 14 additional savings banks on board in the second half of the year and to expand the product to banks, credit card companies and capital firms. The government said it will continuously monitor the loan's supply performance and work to ensure a smooth flow of funds to low- to mid-credit borrowers.

forest@heraldcorp.com