Reducing Debt Burden for Low-Income Homebuyers
Sunshine Loan Youth Supply to Increase by 100 Billion Won Next Month
Loans at 15.9% Annual Interest with a 10 Million Won Limit per Lowest Credit Borrower
[Asia Economy Reporter Sim Nayoung] The Yoon Seok-yeol administration has announced a 'Three-Pronged Financial Support Package for Vulnerable Groups' to provide urgent livelihood stability for low-income vulnerable populations. The supplementary budget (supplementary budget) announced by the Yoon Seok-yeol administration on the 12th includes Safe Conversion Loans, Youth Microfinance, and Special Guarantees for Lowest Credit Borrowers.
The Safe Conversion Loan, introduced in the second half of the year, is a measure to reduce the debt burden of ordinary citizens with actual housing needs, considering the recent increase in interest rates that has raised household interest burdens. It is a type of fixed-rate special product prepared by the government to allow people using variable-rate loans with high interest rates to switch to fixed-rate loans with lower interest rates. The scale of new loan supply is 20 trillion won.
The general Safe Conversion Loan, which does not impose income restrictions, applies to loans within 500 million won. The interest rate is set 0.1 percentage points lower than the Bogeumjari Loan rate of the Korea Housing Finance Corporation. As of May, the Bogeumjari Loan interest rate is around 4.0 to 4.4% per annum. The government plans to support switching to Safe Conversion Loans for housing prices up to 900 million won in ascending order of price from this year through next year.
The preferential Safe Conversion Loan, targeted at those with incomes below 70 million won, will set an interest rate up to 0.3 percentage points lower than the Bogeumjari Loan, with a limit of 250 million won. The housing price limit is 400 million won.
The plan also includes increasing the supply amount of the low-interest microloan program, Hetsalron Youth, aimed at unemployed youth and university students, by 100 billion won next month. The limit is 12 million won per person, and the loan interest rate is around 3.6 to 4.5% per annum (including guarantee fees).
The supplementary budget also includes a new special guarantee program for lowest credit borrowers with annual incomes below 45 million won. Through the Korea Inclusive Finance Agency's temporary special guarantee, lowest credit borrowers will be able to borrow up to 10 million won per person at an interest rate of 15.9% per annum (including guarantee fees) during the second half of the year.
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