8 Trillion Won Citi Bank 'Loan Refinancing' Begins... Fierce Competition Among Banks

As Citibank Korea withdraws from the domestic consumer finance business, refinancing of credit loans worth 8 trillion won begins on the 1st. Banks are fiercely competing to attract transferring customers. For banks, this is also a good opportunity to increase household loan assets amid a continuous decline in household loans for five consecutive months.

Partnered KB and Toss Bank

From this day, Citibank customers can proceed with refinancing through KB Kookmin Bank and Toss Bank, which have become partner banks for credit loan refinancing, via pop-up windows on the Citibank application (app). The two partnered banks allow refinancing to be done non-face-to-face without visiting offline branches. Refinancing loans can only be processed for the same amount as the outstanding loan balance at Citibank, and when customers receive refinancing loans from the partner banks, loan repayment between the partner banks and Citibank proceeds without additional procedures.

KB Kookmin Bank also provides financial support to ease the financial burden of Citibank transferring customers. It offers a preferential interest rate up to 0.4 percentage points compared to the pre-refinancing loan interest rate. The 'Welcome Preferential Interest Rate' (0.2 percentage points) is applied uniformly without any separate conditions. Customers rated within grade 6 according to KB Kookmin Bank's own credit evaluation receive an additional preferential interest rate of up to 0.2 percentage points. The stamp tax incurred during refinancing is fully borne by the bank.

Individual customers holding personal credit loans at Citibank can receive a 0.3 percentage point interest rate discount benefit when using refinancing loans at Toss Bank. Toss Bank also fully covers the stamp tax incurred during the refinancing process and waives all fees incurred for early repayment. The loan period can be extended for at least 5 years under the same conditions as the existing Citibank loan maturity, and thereafter, it can be extended for an additional 5 years according to the conditions set by Toss Bank. However, customers with overdue payments or those undergoing debt collection procedures are excluded.

Shinhan, Woori, Hana... Commercial Banks Also Join

In addition to the partner banks, commercial banks are actively offering benefits such as interest rate discounts to attract transferring customers.

Shinhan Bank has newly launched the 'Citibank Refinancing Loan' product. It targets individual customers who have been employed at their current workplace for more than one month (more than four months when using non-face-to-face channels) and are paying health insurance premiums as workplace subscribers. Loans can be handled up to 500 million won within the principal amount of the existing Citibank credit loan. The loan can be extended annually for up to 10 years, and interest rates can be reduced by up to 1.6 percentage points per year depending on transaction performance. Early repayment penalties and stamp taxes are also waived.

Woori Bank has also launched a refinancing-exclusive product called 'Woori Citi Refinancing Credit Loan.' It offers a preferential interest rate of up to 1.5 percentage points, allowing loan use at a minimum annual rate in the low 3% range. Especially, customers who do not currently have a loan with Woori Bank receive an additional 1 percentage point discount when applying for refinancing. The loan limit is granted up to 230% of annual income within the refinancing amount range, with a maximum of 300 million won. Customers who receive loans by the end of this year are fully exempt from early repayment penalties and stamp taxes.

Hana Bank has also introduced the 'Citibank Switch Loan' product. Transferring customers receive a basic preferential interest rate of up to 2.1 percentage points. If additional transactions are promised, an extra 0.9 percentage points are added, providing a maximum interest rate discount benefit of 3.0 percentage points. When all preferential interest rates are applied, the lowest loan interest rate can be in the low 3% range. Hana Bank also waives early repayment penalties and fully supports stamp taxes. The loan limit is up to 220 million won within the refinancing amount range, and the DSR regulation does not apply. A financial industry official said, "Although partner banks seemed to have the advantage, other banks are aggressively offering interest rate benefits, so competition is expected to become fierce."