KakaoBank to Launch Internet-Only Banks’ First Balance-Payment Loan This Month; Attention on Its First Target Market

[Financial News] KakaoBank will enter the balance-payment loan market as the first internet-only bank to do so. Its focus on remote convenience is expected to make it a disruptive new competitor in a market previously dominated by commercial banks, intensifying competition over interest rates and services.
According to financial industry sources on the 10th, KakaoBank will launch a presale-apartment balance-payment loan product this month.
A presale-apartment balance-payment loan is a mortgage secured by a newly built apartment, taken out by a new resident to pay the remaining purchase balance. Until now, commercial banks have led the market by offering these products mainly in person, supported by the personnel and branch networks needed to conduct complex-specific sales and execute large-scale loans.
Unlike commercial banks, KakaoBank will offer balance-payment loans entirely remotely. The plan is to extend its experience in remote screening and execution, accumulated through its individual mortgage business, to balance-payment loans. Prospective residents are expected to benefit from greater convenience, as they will be able to check rates and complete the process—from submitting documents to executing the loan—via mobile without visiting a branch.
A KakaoBank official said, "We plan to introduce a comprehensive service that allows customers to complete the entire process, from checking their loan limit to execution, within the KakaoBank app without visiting a branch or submitting complicated paper documents."
Attention is also focused on whether KakaoBank’s market entry will spur competition over balance-payment loan rates. Given the launch timing, The H Bangbae in Seoul’s Seocho-gu district, where residents are scheduled to move in by mid-November, could become one of its initial target markets. The total balance-payment loan limit allocated to The H Bangbae by the five major commercial banks—KB Kookmin Bank, Shinhan Bank, Bank of Hope, Woori Bank and Nonghyup Bank—stands at 1.55 trillion won. As of the end of last month, variable rates for balance-payment loans at The H Bangbae were in the range of 4.68% to 5.00% per year.
Prospective residents expect KakaoBank’s launch of balance-payment loans to broaden their options and potentially lower rates through competition among banks. In 2024, KakaoBank launched a remote mortgage refinancing service and attracted early refinancing demand by offering rates starting in the mid-3% range per year. This is why observers expect the bank to seek customers by offering competitive rates for balance-payment loans as well.
However, it has not been confirmed whether KakaoBank will offer balance-payment loans for The H Bangbae. A KakaoBank official said, "As the product has not yet been launched, the complexes we will serve and the applicable rates have not been finalized."
The launch of the balance-payment loan is also expected to support KakaoBank’s loan growth and portfolio diversification. At the end of the second quarter, KakaoBank’s total loans stood at 48.2 trillion won, up 3.4 trillion won from a year earlier, continuing an upward trend.
Of KakaoBank’s outstanding loans in the second quarter, credit loans totaled 19.2 trillion won, accounting for 39.8%, while mortgages amounted to 14.8 trillion won, or 30.7%. Offering balance-payment loans is expected to reduce the bank’s reliance on credit loans and diversify its loan portfolio toward secured lending.
A banking industry official said, "If the difference in interest rates is not significant, convenience from application to execution can become a major factor in choosing a bank. The bank could be competitive because it offers the entire process through mobile."
[email protected] Hyun-jung Lee Reporter