The Financial Services Commission has expanded its loan switching service to include self-employed individuals, allowing them to easily obtain lower interest rates on loans under 1 billion won.
The Financial Services Commission of South Korea has announced that starting from the 18th, the loan switching service, which previously only applied to household loans, will now be extended to individual business loans. This service enables self-employed individuals to conveniently switch to loans with lower interest rates through mobile applications, facilitating access to better financial products. Business owners will be able to compare various loans from different financial institutions in one place, making it simpler to secure funding at more favorable terms.
The service is specifically designed for credit loans classified as 'working capital loans' that can be taken out from a broad range of banks, amounting to no more than 1 billion won. Notably, this initiative excludes secured loans, guarantee loans, and certain policy financing products, focusing instead on providing flexibility to the self-employed sector, which has struggled with high borrowing costs. Individuals can assess potential savings on interest rates and prepayment fees, allowing them to make informed decisions about refinancing their debts.
Moreover, the initiative is set to operate under specific hours initially, from 9 AM to 4 PM on business days, to ensure any issues are promptly addressed. As the program stabilizes, operational hours are expected to extend to 10 PM. Additionally, for individuals who may have difficulty using online services, such as the elderly, in-person assistance will be available at bank branches to submit necessary paperwork. The Financial Services Commission anticipates that this service will alleviate some financial strain on the self-employed sector, potentially saving billions in interest payments as they take advantage of lower rates.
