From May 31st, it will be possible to switch to more favorable conditions for credit loans within 15 minutes without visiting a bank branch directly, using a smartphone. There are already platforms that compare and introduce loan products. However, since consumers still need to check loan interest rates and visit physical branches, the incentive to switch loans was not significant unless there was a significant difference in interest rates.
On the other hand, the new "online one-stop refinancing loan infrastructure" is about being able to access the interest rates, compare them, and switch to a refinancing loan (loan switching) all at once through a mobile app. Here are the key points regarding the online one-stop refinancing loan service that financial consumers may be curious about:
What loans can be switched?
Loans up to 1 billion won received from all participating banks (19), savings banks (18), credit card companies (7), and capital companies (9) are eligible. This includes unsecured products such as overdraft accounts. However, switching existing loans to policy loans for low- and middle-income borrowers is possible regardless of guarantee requirements. Policy loans include loans such as New Hope Holsi Loans, Bridge Loans, New Hope Dream Loans, Mid-Interest Loans, and Sunlight Loans. However, delinquent, seized, or suspended loans are not eligible for the service.
How is it different from existing loan comparison platforms?
The biggest difference is that it is possible to complete the refinancing loan process, including switching loans, without visiting a bank branch and only using a smartphone app. Currently, consumers have to visit both the lender and the new loan provider in person and wait at least 2 business days for refinancing loans. However, with the online infrastructure in place, it can be done within 15 minutes, from app installation to refinancing loans.
Is it better to use a "bank app" or a "loan comparison platform"?
It depends on the consumer's choice. If you want to compare loan conditions from banks, savings banks, and credit card companies that you currently do not use, you can use a loan comparison platform. If you already have a financial institution in mind that you want to switch to, you can directly access the app of that financial institution.
What are the service hours and usage limits?
The service is available from 9:00 AM to 4:00 PM on business days. However, some financial institutions plan to operate with shortened hours initially. For example, SC First Bank, Toss Bank, and Hyundai Capital are available until 3:30 PM. There is no limit to the number of times the service can be used. However, for loans without prepayment penalties, online switching can only be done after 6 months from the execution of the loan agreement.
Will checking loan conditions frequently on loan comparison platforms negatively affect credit scores?
Simply checking loan conditions on the platform does not have any impact on credit scores. However, if there are excessive inquiries within a short period of time, there may be temporary restrictions on non-face-to-face loans from certain commercial banks.
Is it advisable to join multiple loan comparison platforms?
To use a loan comparison platform, you need to first sign up for the platform's own data storage service. Joining the data storage service is necessary because it reflects real-time loan information you have received, and new loan conditions are presented accordingly. Since different financial institutions have different partnerships with each platform, it is recommended to use more than 2 platforms to find better conditions. However, you will also need to sign up for the data storage service of the new platform.
Is it possible to consolidate multiple existing loans into one new loan?
To ensure the initial stability of the system, only one loan can be switched at a time. It is currently not possible to consolidate multiple loans.
If the total debt service ratio (DSR) limit is exhausted, can I still switch loans?
Since the existing loans will be paid off and eliminated by the newly selected financial institution, switching loans does not exceed the DSR limit.
Will loan interest rates decrease with the activation of the service?
The expected results of the loan interest rates for each financial institution vary depending on their individual business strategies. However, financial authorities anticipate that there will be competition among financial institutions to attract or retain consumers, which will lead to interest rates converging within a certain range to avoid excessive competition.
What should be checked before switching?
It is essential to check the preferential interest rates offered by the new loan. After that, compare the interest savings and the prepayment penalties when repaying the existing loan, and make a final decision on whether switching is more advantageous. For example, the initial loan inquiry results on the platform app only show the rates without the preferential interest applied. However, by selecting a specific loan from a certain financial institution and choosing the preferential interest rate conditions available to you, you can see that the interest rate changes.
When will mortgage loans be available?
The government is currently reviewing the start of mortgage loans, aiming for December of this year, at the earliest.
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