NongHyup and Woori Bank Reduce or Eliminate 'Preferential Interest Rates' on Loan Products

[Asia Economy Reporter Kwangho Lee] In response to the financial authorities' strengthened management of household loans, banks are reducing or eliminating preferential interest rates on some loan products.

According to the financial sector on the 24th, NH Nonghyup abolished the preferential interest rate on credit loans (up to 0.3%) based on transaction performance on the 22nd. Instead, a 0.1% preferential interest rate was newly established for small business consulting companies.

Woori Bank will reduce preferential interest rates on real estate secured loans starting from the 27th. The maximum preferential interest rate for apartment-secured loans will be lowered by 0.2 percentage points from 0.5% to 0.3%. The preferential interest rates (up to 0.3%) for residential officetel-secured loans and fixed monthly repayment loans will be eliminated. However, for fixed monthly repayment loans, an additional 0.1% preferential rate for low-income real demand borrowers will be maintained.

The categories of reduced interest rates applied to real estate secured loans will also decrease. Woori Bank will abolish the 0.1% preferential interest rates for six categories: salary/pension transfers, automatic payment of utility bills/management fees, new subscription to comprehensive subscription savings, credit card usage, installment savings/comprehensive subscription savings payments, and Wonderland interest rate preferential coupons.

However, preferential interest rate categories for contracts made through the Ministry of Land, Infrastructure and Transport's electronic contract system (0.2%) and fully non-grace period mortgage loans (0.1%) will be maintained.

This measure will apply to new loans, extensions, renewals, and approval requests for condition changes after the implementation date.