KakaoBank Lowers Loan Interest Rates by up to 1.2%p and Expands Limits for Low-to-Mid Credit Borrowers

[Asia Economy Reporter Kiho Sung] Internet-only bank KakaoBank will reduce the maximum credit loan limit for high-credit salaried workers and lower loan interest rates for middle-to-low credit borrowers starting from the 12th, in order to expand mid-interest rate and middle-to-low credit loans.

KakaoBank announced that from today, it will lower loan interest rates for middle-to-low credit borrowers based on the bank's own credit by up to 1.2 percentage points. Middle-to-low credit borrowers refer to customers with a credit score of 820 or below according to the KCB score standard. Customers can check their credit score through the 'My Credit Information Service' in the KakaoBank app.

KakaoBank explained the perceived interest rate level for customers as "roughly lowering rates from the 6% range to the 5% range, and from the 5% range to the 4% range."

Additionally, KakaoBank will lower the maximum loan limits for high-credit borrowers starting today. The overdraft loan limit will be reduced from 100 million KRW to 50 million KRW, and the individual credit loan limit will be lowered from 100 million KRW to 70 million KRW.

The maximum limit for middle-credit loans remains at 70 million KRW. KakaoBank had expanded this limit from 50 million KRW to 70 million KRW in March.

Earlier, KakaoBank announced at a press conference in February that it would expand mid-interest rate and middle-to-low credit loans. To this end, it has been reducing the loan limits for high-credit borrowers and expanding mid-interest rate loans.

KakaoBank's own supply of middle-credit loans (excluding Saetdol loans) amounted to 118 billion KRW from January to April this year, an increase of 108% compared to 56.7 billion KRW during the same period last year.

KakaoBank is currently upgrading its Credit Scoring System (CSS) for middle-to-low credit borrowers and those with insufficient financial history. In the second half of the year, it plans to launch exclusive products for middle-to-low credit borrowers based on KakaoBank's own credit evaluation.