Ruling Party and Government: "Safe Conversion Loan to be Supplied as Integrated Special BoGeumJaRi Loan" (Comprehensive)

"Housing Price Requirement Raised to 900 Million Won"

[Image source=Yonhap News]

[Asia Economy reporters Lee Ji-eun and Geum Bo-ryeong] The government and the People Power Party announced on the 6th that they held a party-government consultation at the National Assembly and decided to operate the 'Special Bogeumjari Loan,' which integrates the general-type Safe Conversion Loan and the Eligible Loan into one. The housing price requirement will also be raised to 900 million KRW.

Seong Il-jong, the policy chief of the People Power Party, said to reporters after the consultation, "Next year, the Safe Conversion Loan and Eligible Loan will be temporarily integrated for about one year and supplied as the 'Special Bogeumjari Loan' to facilitate easy conversion," revealing this plan.

The housing price requirement will be raised to 900 million KRW, and the loan limit will also be adjusted upward from the existing 360 million KRW to 500 million KRW.

Policy Chief Seong said, "Vulnerable groups suffering from variable interest rates are switching to fixed rates through the Safe Conversion Loan," adding, "About 7.9 trillion KRW has currently been converted and is benefiting, and I hope more people will use it quickly."

Additionally, to reduce the burden of early repayment fees on loans for low-income earners, a voluntary fee exemption will be requested from banks. Policy Chief Seong said, "The Financial Services Commission and the Financial Supervisory Service were asked to understand the party’s intention on this matter and convey it," adding, "Especially for those with low credit ratings, please autonomously decide the threshold between grade 5 and grade 6." A fee exemption for small and medium-sized business owners struggling due to COVID-19 was also requested.

The party and government will also promote a plan to disclose simple payment fees for online small business merchants' entry payment systems. Policy Chief Seong said, "(The fee) variance is quite severe, but if each company discloses these fees uniformly, there will be an adjustment effect," adding, "We decided to prepare measures to disclose them." In addition, the party and government will request the insurance industry to reduce automobile insurance premiums.

In his opening remarks at the party-government consultation on the day, Policy Chief Seong said, "Many low-income earners cannot switch to lower-interest financial products due to early repayment fees," and "We will review fee exemptions for financially vulnerable groups."

He also urged, "The financial sector is making record profits in this high-interest era," and "During difficult times, I ask the financial sector to voluntarily and actively consider vulnerable groups and financially disadvantaged people."

Policy Chief Seong further stated, "As automobile accident rates are significantly decreasing, we will review whether there are additional ways to lower automobile insurance premiums," adding, "If advertising costs are included in the mandatory liability insurance premiums, this is definitely an item to be adjusted." He also added that they will consider measures to increase transparency of online simple payment fees to alleviate the fee burden on small business owners.