K Bank announced on the 7th that it has launched the first 100% non-face-to-face ‘Sajangnim Real Estate Secured Loan’ product for small business owners and individual entrepreneurs among internet banks.
The Sajangnim Real Estate Secured Loan is a product that provides working capital of up to 1 billion KRW to individual entrepreneur customers who hold a business registration certificate. If refinancing an existing working capital loan, a limit of 1 billion KRW applies, and for new loans, a limit of 500 million KRW per loan and 1 billion KRW per customer is provided. The entire process from loan application to document submission and execution can be conducted non-face-to-face without visiting the bank.
The interest rate is at a low level compared to commercial banks, with a minimum annual rate in the 3% range. It is offered with fixed and variable interest rates, with the minimum rates as of this date being 3.60% and 3.63% per annum, respectively. According to the Korea Federation of Banks, the simple average interest rate for real estate secured loans to individual entrepreneurs with credit ratings 1 to 3 handled by the five major banks (KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup) in the second quarter of this year was 4.95% per annum.
In particular, with the launch of this product, individual entrepreneur customers who have taken out real estate secured loans can also lower their loan interest rates and receive interest savings benefits through refinancing. K Bank explained that since refinancing can be conveniently done non-face-to-face, it is expected that refinancing loans, which have mainly been centered on household secured loans, will expand to corporate secured loans.
Repayment methods can be chosen between lump-sum repayment at maturity and equal principal installment repayment, with the loan period determined according to the repayment method. Lump-sum repayment at maturity can be selected for 1, 2, or 3 years, and equal principal installment repayment is for 5 years (with a 1 year and 6 months grace period).
The real estate eligible as collateral is an apartment solely owned by the borrower or jointly owned with one other person, with market prices held by the Korea Real Estate Board. For new loans, there must be no existing mortgages or lease contracts with other financial institutions. In the future, collateral properties will be expanded to officetels, commercial buildings, etc., and product areas such as subordinate loans will be strengthened.
Additionally, K Bank developed its own AI system that logicalizes the business type information within the business registration certificate and compares and analyzes it with sales report data for the launch of this product. Through this, it automatically verifies whether the business type and sales information reported by the customer match and cross-checks the documents submitted by the customer.
Kim Min-chan, head of K Bank’s SME Group, said, "Since introducing the guarantee loan as the first internet bank in 2022, we have completed banking for individual entrepreneurs with the launch of real estate secured loans following credit loans and the Sajangnim Account." He added, "We provide convenient services to support businesses, including individual entrepreneur products, on the app’s ‘Sajangnim Home’ and will continue efforts to create innovation in corporate finance."
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