Bank Loans Gradually Easing... "Not Fully Lifted Yet"

Some Products Resumed by Kookmin and Hana
Nonghyup and KakaoBank Also Show Signs of Easing

[Image source=Yonhap News]

[Asia Economy Reporters Kiho Sung and Sunmi Park] Some banks that had suspended major household loan services are gradually resuming loan sales. It has been about a month since household loans were halted on the 20th of last month to manage the total loan volume. Because of this, cautious expectations are emerging that bank loans may be sequentially resumed.

According to the banking sector on the 23rd, Hana Bank plans to resume sales of all unsecured loan products and non-face-to-face loan products such as Hana OneQ unsecured loans and Hana OneQ apartment loans from 6 p.m. today. Along with this, they intend to resume sales of real estate-secured purchase loans, including mortgage loans for houses, commercial buildings, officetels, and land, starting from the 1st of next month.

Hana Bank, along with other banks, had temporarily suspended sales of these products since the 20th of last month. As a result, household loans were effectively halted except for some products excluded from the financial authorities' total household loan volume management, such as jeonse loans, group fund loans, and low-income financial products.

However, as of the 19th, the household loan growth rate was stably managed at 4.6%, leading to the decision to restart loan product sales.

KB Kookmin Bank is also reported to have changed its internal guidelines from today to allow borrowers to choose 'lump-sum repayment' among the jeonse loan repayment methods. Since the 25th of last month, Kookmin Bank had only allowed 'mixed repayment' and 'installment repayment' for jeonse loans secured by the Korea Housing Finance Corporation and Seoul Guarantee Insurance.

Additionally, from today, Kookmin Bank plans to sequentially apply 'KB market price' and 'appraised value' (if there is no KB market price) as collateral standards for move-in balance loans among group loans. Earlier in September, Kookmin Bank changed the collateral standard for balance loans to 'the lowest amount among the sale price, KB market price, and appraised value.' As a result, the loan limit for most balance loans was significantly reduced based on the lower 'sale price' rather than the market price.

A Kookmin Bank official stated, "Since jeonse loans are excluded from the total household debt management, we have ended some temporary operational measures to smoothly supply additional funds prepared for real demand borrowers."

NH Nonghyup Bank is also expected to resume mortgage loan sales soon. Nonghyup Bank is positively considering resuming new mortgage loans for modern non-homeowners.

However, Nonghyup Bank plans to continue suspending other products such as non-residential collateral loans. They also intend to maintain the suspension of refinancing loans (loan switching).

Internet-only bank Kakao Bank resumed sales of its unsecured loan product, the Workplace Saetdol Loan, on the 12th. Kakao Bank had suspended new Workplace Saetdol Loans last month. However, the loans now available are limited to medium- and low-credit customers.

Nevertheless, there are still expectations that obtaining loans will not be easy. A financial sector official said, "The regulatory stance that loans are only provided to real demand borrowers remains unchanged," adding, "Therefore, the current trend of difficulty in obtaining loans is expected to continue for the time being."