Haetsalron Bank, Minimum Annual Interest Rate 4.9%, Maximum Limit 20 Million KRW
Loans Available Even When Using Low-Income Financial Products
Seogeumwon Encourages Consultation at Bank Counters
Eun Sung-soo, Chairman of the Financial Services Commission, along with heads of major commercial banks, attended the 'Hetsal Loan Bank Business Agreement and Meeting' held on the 1st at the Seoul Jung-gu Community Financial Promotion Agency. They are taking a photo after completing the business agreement. Photo by Kang Jin-hyung aymsdream@
[Asia Economy Reporter Jin-ho Kim] Self-employed individual Yoo Seung-ho (42, pseudonym) recently came across news about the launch of ‘Haetsalron Bank,’ which offers bank loans at a low interest rate starting from 4.9%. However, after visiting a self-employed community, Yoo decided not to pursue the loan. He encountered information stating that if one is already using other low-income financial policy products, no loan limit would be granted. Yoo has been faithfully repaying a Saehopeumholssi loan for over two years.
To get straight to the point, Yoo received incorrect information. In the case of Haetsalron Bank, since the loan limit is granted within the same individual guarantee limit (30 million KRW) set by the Korea Inclusive Finance Agency, using other low-income financial policy products does not reduce or eliminate the loan limit. The agency emphasizes that it is crucial for borrowers wishing to take out a loan to visit banks directly for consultation.
According to the financial sector on the 28th, inquiries about Haetsalron Bank flooded major commercial bank counters and the Korea Inclusive Finance Agency call center from the launch day on the 26th.
Haetsalron Bank, a low-income financial policy product, was established to help low-credit and low-income individuals settle into the banking sector. It features loans available at low interest rates ranging from 4.9% to 8% per annum, with a maximum limit of 20 million KRW, for those who have used low-income financial products for over a year and whose debt or credit rating has improved.
Consumers’ reactions to Haetsalron Bank are enthusiastic due to the ability to access bank loans at low interest rates and high limits. However, a widespread misunderstanding has emerged that loans cannot be obtained if one is already using low-income financial policy products.
According to the Korea Inclusive Finance Agency, only the Geunroja Haetsalron and Haetsalron Youth products directly affect the guarantee limit when using Haetsalron Bank. Other major low-income financial policy products such as Haetsalron 15, Haetsalron 17, and Safety Net Loans do not affect the guarantee limit. Even if one has existing loans, since they do not affect the agency’s guarantee limit, it is explained that Haetsalron Bank can be used up to 20 million KRW depending on the individual’s credit and debt improvement. Borrowers using Geunroja Haetsalron and Haetsalron Youth, which do affect the guarantee limit, can also use the service within the guarantee limit.
Therefore, the agency recommends that borrowers wishing to use Haetsalron Bank visit banks directly for consultation. They are concerned that misunderstandings about this matter may lead to low utilization rates. In fact, the Jeonbuk Bank mobile banking app allows easy inquiry of Haetsalron Bank’s loan limits and execution status.
The Korea Inclusive Finance Agency plans to collaborate with banks to upgrade the system early next month so that users can check their eligibility for Haetsalron Bank through an application (app). The purpose is to help users quickly and conveniently determine via the app whether their credit or debt has improved compared to a year ago and whether they have used existing low-income financial policy products for over a year.
An agency official stated, "Recently, there have been many cases of impersonation of policy financial institutions, so we decided to proceed through the app rather than phone guidance," adding, "We will strengthen promotional activities to ensure that this product can provide real help to low-income individuals."
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