Jeju Bank automatically lowers interest rates when credit improves

[Financial News] Jeju Bank is launching a service that will be the first in the banking sector to check customers’ credit status every month and automatically lower their loan interest rates. Customers can receive the rate-reduction benefit by applying just once, with no additional procedures.
According to the financial industry on the 19th, Jeju Bank will launch its “Dynamic Rate Reduction Service” for customers with DJ Bank credit loans. The bank will proactively check customers’ credit status every month and reflect any qualifying rate-reduction factors in their loan interest rates.
Customers who want to use the service need to apply just once for each loan account. The service will remain in effect from the month after applying until the loan is fully repaid. If a monthly credit reassessment identifies a factor that would lower the interest rate, the lower rate will be applied without a separate application or agreement. Customers will be notified of the decision by text message and through the app.
Interest rates are calculated using a behavioral score that evaluates customers’ transaction records and other factors, along with Jeju Bank’s internal credit rating (Combined BSS rating), which incorporates external credit ratings. If the assessment confirms that a customer’s credit status has improved, this will be factored into a rate reduction. However, even if a customer’s credit status improves, the interest rate may not be lowered if the improvement does not affect the rate calculation.
The service applies to credit loans among household and corporate loans that use a Credit Scoring System (CSS) score and whose interest rates vary according to the borrower’s credit status. Jeju Bank plans to introduce the service first for DJ Bank credit loan products, then gradually expand its scope after reviewing operations and customer demand.
Jeju Bank President Lee Hee-su said, “After using ERP data-based alternative credit assessments through DJ Bank to expand access to finance, we have now introduced a service that allows improvements in credit status to lead to a reduced interest burden. We will continue to develop and apply inclusive financial services that carefully take into account customers’ circumstances and efforts to improve their credit, and expand the scope of these services to increase the financial benefits customers can experience.”
[email protected] Seo Ji-yoon Reporter