Easing the burden of applications and interest

[Shinhan Financial Group]
[Shinhan Financial Group]

Jeju Bank will begin assessing customers' credit standing every month and automatically lower their loan interest rates when they meet the required criteria — no repeat applications needed once a customer signs up.

The bank said Monday it will launch what it calls a "Dynamic Rate Reduction Service" for DJ Bank personal loan customers, marking the first such offering in the domestic banking sector. The service is designed to ensure customers do not miss out on rate cuts simply because they failed to track their own credit improvements.

Once a customer enrolls on a per-account basis, the service remains active until the loan is fully repaid. Each month, if a reassessment finds grounds for a rate reduction, the lower rate is applied automatically — no separate application or contract amendment required. Customers are notified of the outcome by text message and through the bank's app.

The assessment draws on an internal credit rating that combines a behavioral score reflecting the customer's transaction history with an external credit rating. However, even if a customer's credit standing improves, the rate may not fall if the improvement does not affect the interest rate calculation.

The service covers household and corporate credit loan products under the credit scoring system where a customer's credit standing factors into the rate calculation. Jeju Bank plans to roll it out first for DJ Bank personal loans, then expand it in stages based on operational results and customer demand.

"Building on DJ Bank's use of ERP data-based alternative credit assessments to broaden financial access, we have now developed a service that translates credit improvement directly into lower interest burdens," Jeju Bank President Lee Hee-su said. "We will continue to identify and expand inclusive finance initiatives that closely track customers' circumstances and credit-building efforts, widening the range of financial benefits they can actually feel."


forest@heraldcorp.com