[서울=뉴스핌] Reporter Hong Hong-young = KB Kookmin Bank is the first bank to offer a 10-year installment repayment credit loan product. This is to increase the loan limit by extending the maturity of the existing maximum of five years ahead of tightening regulations on the total debt-to-income ratio (DSR).
According to the banking industry on the 1st, Kookmin Bank extended the maturity of amortized credit loans from the maximum of 5 years to 10 years from the 29th of last month.
This is in line with the recent recommendation by the financial authorities to provide a ’10-year amortization credit loan’ to banks to expand the loan limit for low- and middle-income earners. This is because it is necessary as a means of buffering the reduction of the loan limit due to the tightening of DSR regulations in July. If the current borrower’s total loan amount exceeds 200 million won, the annual principal and interest repayment amount cannot exceed 40% of the annual income. From July, the DSR 40% will be applied to borrowers with a total loan of 100 million won or more due to the strengthening of DSR regulations.
An official from Kookmin Bank said, “Existing credit loan holders can extend their maturity by refinancing through credit evaluation.”
In fact, when a borrower with an annual income of 50 million won uses a 50 million won 5-year credit loan (4.5% a year), the DSR is 24%, but when using a 10-year credit loan, the DSR is cut in half.
Starting with Kookmin Bank, major banks such as Shinhan, Hana, Woori, and NH Nonghyup also plan to extend maturity soon. In the same vein, major banks are considering extending the maturity of the mortgage loan from the existing maximum of 35 years to 40 years. On the 21st of last month, Hana Bank extended the maturity of the loan products to 40 years.
Kookmin Bank will also lower the interest rate on the credit loan product ‘KB Loan for Employees and Careers’ by 0.2 percentage points (p) and the interest rate on ‘KB Star Club Credit Loan’ by 0.3 percentage points from the 2nd. The interest rates on mortgage loans (up to 0.45%p cut) and Jeonse loan interest rates (up to 0.55%p cut), which were lowered from the 5th of last month, will also be extended from the original day to the end of this month.