"Housing and Medium Credit Loan Products Included"... Internet Banks to Launch Successive Loan Products in the Second Half of the Year

Kebang Jeonse Loan, Kebang Mortgage Loan Preparation

[Asia Economy Reporter Ki Ha-young]In the third quarter, internet-only banks K-Bank and KakaoBank are strengthening their loan product lineups by consecutively launching new loan products.

According to the banking sector on the 1st, K-Bank plans to launch jeonse loans and youth jeonse loan products within the third quarter. These products are supported by guarantees from the Korea Housing Finance Corporation, and applicants can receive loans by simply photographing and submitting the lease contract and deposit receipt. The jeonse loan targets not only apartments but also houses and villas, and both products waive prepayment penalties.

Competitor KakaoBank already offers similar products. In early 2018, KakaoBank launched jeonse and monthly rent loans utilizing guarantees from the Korea Housing Finance Corporation. Then, in February last year, it expanded the loan product’s eligibility from wage earners to business income earners and introduced the 'Youth Jeonse and Monthly Rent Deposit Loan.' KakaoBank also does not charge prepayment penalties on both products.

This month, KakaoBank will introduce credit loans and small overdraft account loan products targeting mid-credit borrowers. These products are 'in-house mid-credit loans' for wage earners with an annual income of 20 million KRW or more and at least one year of employment. The plan is to expand the range of eligible borrowers compared to KakaoBank’s existing mid-credit loans. Additionally, a small-limit loan product for mid-credit borrowers that anyone aged 19 or older can apply for regardless of occupation or income will be launched.

In response, K-Bank plans to strengthen loan supply for low- to mid-credit borrowers in the second half of the year after completing the advancement of its credit scoring system (CSS) using KT telecom data and BC Card payment data.

KakaoBank will also launch a mortgage loan that can be applied for via mobile by the end of the year. Unlike major commercial banks, which have branches, KakaoBank is preparing a fully non-face-to-face mortgage loan process where customers apply and check results entirely through the mobile application (app).

Although K-Bank currently has an apartment mortgage loan product, this product is limited to refinancing (switching loans) and only applies to apartments. Therefore, K-Bank is considering expanding the scope of its apartment mortgage loan, which mainly focuses on refinancing, to include purchase funds as well.

The 'third internet-only bank,' Toss Bank, scheduled to launch at the end of September, plans to release key products consecutively to stand shoulder to shoulder with the 'first and second internet-only banks' in the areas of deposits, loans, and check cards immediately upon its official launch. Regarding loan products, Toss Bank will primarily focus on personal credit loans right after its launch. Toss Bank plans to offer credit loan products for high-credit, high-income office workers as well as tailored credit loans with customized interest rates and limits for low- to mid-credit borrowers. It also aims to introduce customized loans for small and medium-sized enterprises and small business owners shortly after its launch.