Korea Loan Finance Association Offers Relief with 567% Interest Rate, Reduces 172 Million Won in Illegal Private Loan Debts in First Half

Returned 390 million won in excess interest payments to borrowers

The Korea Loan Finance Association announced on September 9 that it had reduced illegal private loan debts by 172 million won (100 cases) in the first half of the year. It also returned 386 million won (74 cases) that had been paid in excess of the legal maximum interest rate to borrowers.

Flyers related to private loan financing are placed at closed stores in Myeongdong, Seoul. Photo by Jin-Hyung Kang aymsdream@

Since 2009, the association has been providing support for victim relief and verification services for illegal private loan transactions in order to protect victims of illegal private lending.

When a victim requests relief, the association assists in debt reduction and the return of excess interest payments by mediating with illegal private lenders.

In the first half of the year, the association provided a total of 3,022 transaction verification services to 445 victims of illegal private lending.

The average annual interest rate for victims of illegal private lending reached 567 percent. The average loan amount and average loan period were 23 million won and 60 days, respectively.

Jung Sungwoong, president of the association, stated, "Illegal private lending not only causes damage through high interest rates but also leads to the misconception that even legitimate lending businesses are illegal, resulting in adverse selection among vulnerable groups. The association will continue to support relief for victims through debt reduction and the return of excess interest."

If you have been harmed by illegal private lending, you should prepare your loan transaction records and contract-related documents and contact the association's Consumer Protection Department. Relief will be provided through consultation.