KakaoBank Corp Launches First Balance Payment Loan via Internet Banking: "The H Bangbae Up to 1 Billion Won"

[Financial News] KakaoBank Corp has entered the balance payment loan market, which is dominated by commercial banks, by launching the first balance payment loan for presale apartments among internet-only banks. Targeting The H Bangbae in Seocho-gu, Seoul, which is scheduled for occupancy this coming November, the bank is aiming to secure customers by emphasizing non-face-to-face convenience and the waiver of early repayment penalties.
On the 16th, KakaoBank Corp announced that it has launched the 'Balance Payment Loan' for customers scheduled to move into newly built apartments, becoming the first internet-only bank to do so.
A presale balance loan is a mortgage loan used to repay existing interim payment loans and pay the balance when moving into a new apartment.
KakaoBank Corp has implemented the entire loan process on mobile, from checking limits and interest rates to applying for and executing the loan. Previously, balance payment loans were handled primarily through in-person consultations and branch visits, causing inconvenience for customers in checking loan conditions and carrying out necessary procedures.
Another feature is that customers can check the estimated limit and interest rate starting about two months (eight weeks) before the move-in period begins. Since loan conditions can be checked about two weeks earlier than with typical balance payment loans, customers can comfortably plan their finances before moving in and compare various products.
The loan limit is up to 1 billion won within the scope of relevant regulations, such as the Loan-to-Value (LTV) ratio and the Debt Service Ratio (DSR). The loan term is up to 40 years, and borrowers can choose between equal principal installments and equal principal-and-interest installments.
Early repayment penalties are fully waived. Since launching its mortgage loan service in 2022, KakaoBank Corp has been the only financial institution not to charge fees for any early repayment of mortgage loans. The decision on whether to extend the waiver policy is made every six months, taking into account fund management and loss costs.
The loan is available to general purchase contract holders of newly built apartments designated by KakaoBank Corp. Eligible complexes can be checked on the product details page for the 'Balance Payment Loan' in the KakaoBank Corp app. KakaoBank Corp plans to gradually expand eligibility to include members of urban renewal and remodeling associations in the future.
The H Bangbae in Seocho-gu, Seoul, where occupancy is scheduled by mid-November, is also included in the business. Currently, 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) amounts to 1.55 trillion won.
The bank plans to reduce the financial burden on prospective residents by offering competitive interest rates. To this end, KakaoBank Corp intends to review the possibility of rate cuts approximately one month before the start of the move-in period by comprehensively reflecting market rates. A process has been established to allow customers who have already signed loan agreements to receive the reduced rates retroactively, enabling them to enjoy both the convenience of early application and the benefits of optimal interest rates.
Even complex registration procedures can be conveniently handled through an agreement with a specialized law firm that has experience in collective registration for more than 60,000 households. Documents required for registration, such as presale contracts, are collected by an affiliated credit information company visiting customers and forwarded to the law firm, which then proceeds with the acquisition tax filing and registration procedures.
KakaoBank Corp stated, "Loans for the remaining balance of presale contracts are products that place a heavy burden on customers because they require completing various procedures within a short period to meet the move-in schedule," adding, "We will continuously enhance our products and services to enable customers to use the housing financial services they need more easily and conveniently."
Meanwhile, KakaoBank Corp has been transitioning its face-to-face housing finance services to mobile, launching rental deposit loans in 2018 and mortgage loans in 2022. Through this presale balance loan, the bank plans to expand the scope of non-face-to-face mortgage loans to the group loan market and enhance customers' financial accessibility and choice.

[email protected] Lee Hyun-jung Reporter