[Practical Finance] For Young People Looking for Monthly Rent Loans, 'Here'

Interest Rates in the 2% Range for 'Youth Customized Jeonse and Monthly Rent Loans'
Various Monthly Rent Loans Also Offered by Commercial Banks

[Asia Economy Reporter Kim Hyojin] A 28-year-old young man, Mr. A, who just graduated from college and is preparing for employment, looked for monthly rent one-room apartments around the city before moving to Seoul to attend an academy, but he could not find a suitable place.

This was because the funds he could manage through part-time jobs were less than 1 million KRW per month, and after deducting living expenses, it was difficult to afford monthly rents generally formed in the 500,000 to 600,000 KRW range.

Then, Mr. A happened to discover the 'Youth Customized Jeonse and Monthly Rent Loan,' created through an agreement between the Financial Services Commission, Korea Housing Finance Corporation, and banks. Based on this program, Mr. A was able to find a one-room apartment with a monthly rent of 500,000 KRW located not far from the academy.

If you are a young person like Mr. A, with low or no income looking for a monthly rental house, it would be good to consider the Youth Customized Jeonse and Monthly Rent Loan. This product supports deposits (up to 70 million KRW) and monthly rent (up to 500,000 KRW per month) for youth aged 34 or younger.

With an interest rate in the 2% range, the interest burden can be greatly reduced. The financial authorities analyzed the usage status so far and found that for monthly rent loans, users paid an average interest of only about 10,000 KRW per month. About 3 out of 10 users were students or job seekers with no income.

To support the resolution of youth housing problems, the financial authorities increased the supply scale of this program from the original 1.1 trillion KRW to 4.1 trillion KRW earlier this year.

For office workers looking for monthly rental houses, various types of monthly rent loan products from commercial banks can also be used.

KB Kookmin Bank operates 'KB Housing Happiness Monthly Rent Loan' and 'KB Housing Happiness Monthly Rent Account,' which are overdraft-type loans. Consumers who sign a monthly rent contract with a deposit through a real estate agency can apply.

Within a limit of 50 million KRW, after agreeing on the loan limit with the 'KB Housing Happiness Monthly Rent Account,' the loan amount is used to pay monthly rent. The loan funds must be used only for paying rent. The monthly rent is automatically transferred every month from the borrower's loan account to the landlord's account.

Hana Bank also sells the overdraft-type 'Hana Monthly Rent Loan.' You can borrow up to 50 million KRW within the range of the remaining monthly rent amount for the lease period, and the deposit loan can be up to 300 million KRW.

However, loans are provided within the range of 80% of the deposit minus the remaining monthly rent after subscribing to Seoul Guarantee Insurance. When subscribing to Seoul Guarantee Insurance, loans can also be obtained for living expenses.

Shinhan Bank operates monthly rent loans through the mobile-only 'Solpyeonhan Jeonse Loan.' You can borrow monthly rent for up to 24 months and within 50 million KRW. The monthly rent is automatically deposited into the landlord's account every month.