"Different from the disclosed loan-deposit interest rate spread... I wish I could compare my loan interest rates at a glance"

Financial Consumers Interested in Loan-Deposit Interest Rate Spread Disclosure but Cannot Understand from Disclosure Alone
"The Actual Loan and Deposit Rates I Receive from Banks Are Different"
"A Comparison Site for Loan and Deposit Rates Across All Financial Sectors Is Needed"

As the U.S. central bank, the Federal Reserve (Fed), hinted at additional interest rate hikes, attention is increasing on whether the Bank of Korea's Monetary Policy Committee will raise rates at its meeting scheduled for the 25th. The photo shows a loan counter at a commercial bank in downtown Seoul on the 19th. Photo by Kim Hyun-min kimhyun81@

"I had to take out a loan for my jeonse deposit, so last month I checked the published interest rate spreads and went to the bank with the lowest loan interest rate. But ironically, the bank that showed a higher loan interest rate in the disclosure offered me a cheaper interest rate."

"When I looked at the disclosures to sign up for a fixed deposit, I was relieved to see that my main bank had the highest deposit interest rate. But after further research, I found that other banks offered preferential rates to first-time customers, so I signed up there."

During the rising interest rate period, the interest rate spreads (the difference between deposit and loan interest rates) of 19 banks disclosed by the Korea Federation of Banks since last month have become a hot topic in online financial communities. However, voices are increasingly saying, "You can only compare the overall interest rate levels by bank, but the actual loan or deposit rates I can get are quite different."

Nowadays, financial life allows you to choose customized products based on whether preferential rates apply, your transaction history, changes in credit rating, and more. There is inevitably a gap between the disclosed information showing the interest rates of loan and deposit products handled by banks over a month and the individual’s actual rates.

Office worker Lee Myunghoon (36) said, "It’s unreasonable to decide which bank to deal with based solely on the interest rate spread information. Ultimately, the best way is to visit each bank and inquire, but there is a need for a system that can compare loan and deposit interest rates of domestic banks based on my personal information."

Financial Services Commission Chairman Kim Ju-hyun is delivering opening remarks at the Policy Financial Institutions Heads Meeting held at the Government Seoul Office in Jongno-gu, Seoul, on the morning of the 2nd. Photo by Kim Hyun-min kimhyun81@

Comparing deposit interest rates is relatively smooth. Since the Financial Services Commission announced its intention to designate innovative financial services in July, Naver Financial followed by Kakao Pay opened pilot services earlier this month. Card companies are also preparing to join. As early as December, services recommending and mediating domestic deposit and savings products are expected to appear.

The side that has not moved at all is the loan interest rate comparison service. Although leading companies like Toss, Kakao Pay, and Finda exist, it is no exaggeration to say that products from the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup), which people most frequently seek, are all missing.

As of the 22nd, Toss and Kakao Pay do have products from Shinhan, Woori, and Hana banks. But in terms of the number of products, Toss has 4 (3 unsecured loans, 1 mortgage loan), and Kakao Pay has 7 (6 unsecured loans, 1 jeonse/monthly rent loan) in total.

Finda has handled only three unsecured loan products from Hana Bank since April. An industry insider said, "Currently, loan interest rate comparison services mostly handle products from savings banks, regional banks, card companies, capital companies, insurance, and P2P (peer-to-peer) finance. No matter how much we knock on the doors of the five major banks, there is no sign of them opening."

"Citizens should be able to move loans without visiting banks, and an infrastructure that compares interest rates across all financial institutions should be built to find a smart way to reduce interest burdens." (Kwon Seongdong, Floor Leader of the People Power Party) Although the ruling party leadership urged the financial authorities to create a loan interest rate comparison site a month ago, prospects are not smooth. From the banks’ perspective, this is a matter of survival.

Banks generate profits from loan interest. But if interest rate comparison and switching become possible, a price war on interest rates will ensue. If customers flock to big tech or fintech companies that compare loan interest rates, banks will be reduced to mere product providers and inevitably become dependent on them.

Last year, the Financial Services Commission, together with the Korea Financial Telecommunications & Clearings Institute, tried to create a refinancing loan platform that links citizens’ credit information to compare loan interest rates across the entire financial sector and enable switching, but it was scrapped due to opposition from banks, and there has been no progress since. A Financial Services Commission official said, "Discussions on the refinancing loan platform are ongoing, but opinions vary greatly by industry, so it is not easy."

An industry insider said, "The loan interest rate comparison site is a political issue, so if it becomes a topic at the October National Assembly audit, discussions could accelerate."