Post Office Terms Loan Interest Rate Reduced by 4.81%p

On the 28th, as the number of confirmed cases of the novel coronavirus infection increases, residents are purchasing masks at Munsan Post Office in Paju, Gyeonggi Province. Photo by Kang Jin-hyung, Paju aymsdream@

[Asia Economy Reporter Junho Hwang] Post Office Insurance is lowering loan interest rates for low-income borrowers to overcome the economic crisis caused by the novel coronavirus infection (COVID-19).

The Ministry of Science and ICT’s Postal Service Headquarters will reduce the interest rates on policy (refund) loans starting from the 8th. Policy loans are financial products handled by the Post Office Insurance under the headquarters, allowing subscribers to quickly borrow and repay loans within the scope of the insurance surrender refund without any required documents.

Post Office Insurance stated that this decision was made to prevent policy cancellations by citizens struggling due to the economic impact of COVID-19, alleviate household burdens, and revitalize the economy.

The interest rate reduction benefits apply to both existing and new loans. If you previously took a policy loan with an interest rate of 9.8% to 5.0%, you can convert it to 4.99%. After interest settlement at the time of application and agreement to the contract, all loans can be converted to the preferential rate of 4.99%. New loans can also be borrowed at the preferential rate of 4.99%. For example, if you borrowed 10 million KRW at a 9.8% interest rate, this reduction will save you 481,000 KRW annually (from 980,000 KRW to 499,000 KRW).

The Postal Service Headquarters plans to notify existing Post Office Insurance customers about the interest rate reduction on policy (refund) loans via alert messages. The application period is from the 8th to September 30. The interest rate reduction benefit can be applied until September 30, 2023 (for a minimum of 3 years). Applications can only be made through the Post Office Insurance app, the Post Office Savings Insurance website, or at Post Office counters. Preferential rates cannot be applied through customer centers, phone banking, or ATMs. Among customers applying for Post Office Insurance policy loans, 200 will be selected by lottery to receive Post Office Shopping prizes (5kg of rice).

For more details about the interest rate reduction on Post Office Insurance policy (refund) loans, please check the Post Office Savings Insurance website, Post Office Insurance Customer Center, or any Post Office nationwide.

Park Jongseok, head of the Postal Service Headquarters, said, "We hope this interest rate reduction will provide some help to citizens struggling due to COVID-19," and added, "The Post Office will continue to offer various benefits to contribute to the national economy."