"Fees Charged to Repay Loans"... Top 5 Banks Collected Over 120 Billion Won in the First Half of the Year

Assemblyman Kim Han-jung: "Early Repayment Fees Should Be Temporarily Suspended"

[Asia Economy Reporter Park Sun-mi] It has been revealed that the five major commercial banks collected over 120 billion KRW in early repayment fees during the first half of this year. Amid efforts by financial authorities to curb household loans, there are criticisms that excessive early repayment fees are being charged to customers who wish to repay their loans early.

According to data on early repayment fee trends from the five major banks received by Kim Han-jung of the Democratic Party, a member of the National Assembly's Political Affairs Committee, the total amount reached 126.6 billion KRW in the first half of this year, with 101.3 billion KRW from household loans and 25.3 billion KRW from corporate loans. This is about half of last year's total of 275.8 billion KRW.

Early repayment fees refer to the money that customers who have borrowed from financial institutions must pay to those institutions if they repay their loans before the agreed maturity date. These fees are also called early repayment penalties or early repayment sanctions.

In particular, early repayment fees for household loans, including those for individual business owners, accounted for 228.6 billion KRW last year, representing 82.9% of the total, and reached 101.3 billion KRW in the first half of this year, making up 80% of the total.

By type of household loan, mortgage loans accounted for 114.9 billion KRW, or 50.3% of the total, other secured loans 65.6 billion KRW (28.7%), other loans 27.1 billion KRW (11.8%), and unsecured loans 21.0 billion KRW (9.2%).

Looking at early repayment fees for household loans by bank, KB Kookmin Bank collected the most in the first half with 27.3 billion KRW, followed by Hana Bank with 19.9 billion KRW, Woori Bank with 19.1 billion KRW, NH Nonghyup Bank with 18.0 billion KRW, and Shinhan Bank with 16.9 billion KRW.

Assemblyman Kim Han-jung stated, "Recently, financial authorities have taken the drastic measure of halting loans to curb household lending, but charging customers early repayment fees as a form of penalty when they try to repay early is unreasonable," and urged, "The imposition of early repayment fees should be temporarily suspended to encourage early repayment, thereby calming the rapid increase in household loans and enhancing policy consistency."