Military Mutual Aid Association to Allow All Member Savings-Backed Loans Starting 2025

Reduced Burden with Increased Loan Limits and Interest Rate Cuts
Expanded Benefits through the Introduction of a New Loan System

The Military Mutual Aid Association announced that starting January 1, 2025, collateral loans will be available for all member savings. Accordingly, members' loan limits will be expanded, and interest rates will be lowered, which is expected to reduce their financial burden.

Until now, the Military Mutual Aid Association only provided collateral loans for retirement benefits and deposit-type lump-sum savings, but from 2025, collateral loans will also be available for ‘pension-type installment benefits,’ ‘accumulative lump-sum savings,’ and ‘pension-type lump-sum savings.’ This will diversify the loan options available to members and broaden their financial management opportunities.

The member loan limits will also be significantly expanded. Previously, loans for retirement benefits and deposit-type lump-sum savings were available up to 90% of the savings amount, but including the newly introduced accumulative lump-sum savings loans, members will be able to borrow up to 95% of their savings. However, for pension-type products such as pension-type installment benefits loans and pension-type lump-sum savings loans, the maximum loan limit will be 80%.

Additionally, the Military Mutual Aid Association operates the member loan system in collaboration with several banks, encouraging competition among banks to offer lower interest rates. Through cooperation with Shinhan Bank, starting in 2024, the additional interest rate on retirement benefit loans will be reduced by 0.2 percentage points, and preferential interest rates will be increased by 0.2 percentage points, providing members with a maximum interest rate reduction effect of 0.4 percentage points.

Jung Jae-kwan, Chairman of the Military Mutual Aid Association, stated, “As part of member-first management, we are promoting the reduction of member loan interest rates to ensure that all loan interest rates remain lower than the interest rates on member savings products,” adding, “Through this improvement in member loans, we hope members can manage their valuable savings safely without early termination, contributing to their financial stability.”