“Lower rates, faster refinancing”: KakaoBank Corp. launches refinancing for business owners’ property-backed loans

[Financial News] KakaoBank Corp. is easing small business owners’ financial burden by launching a loan refinancing service for individual business owners. The service lets them consolidate up to five loans held at different financial institutions into a single KakaoBank Corp. real estate-backed loan and automatically handles repayment of the existing loans, making the process more convenient.
According to the financial industry on the 11th, KakaoBank Corp. has launched its “Real Estate-Backed Loan Refinancing for Individual Business Owners” service. It enables customers with individual business loans from other financial institutions to refinance with KakaoBank Corp.
Eligible loans are individual business owners’ credit loans, guarantee-backed loans and real estate-backed loans that were issued by other financial institutions at least one year ago. Customers can also consolidate and refinance up to five loans into a KakaoBank Corp. real estate-backed loan for individual business owners.
As of the 11th, the lowest interest rate is 3.04% per year, and the maximum loan limit is KRW 1 billion. Loan terms are up to 20 years, and loans can be issued against apartment buildings, officetels and multi-unit commercial properties. If there is room under the limit compared with the customer’s existing loan, they can increase the loan amount when refinancing.
The process for repaying existing loans has also been streamlined. KakaoBank Corp.’s “automated repayment system,” the first of its kind in the financial industry, transfers the loan proceeds to the repayment account at the existing financial institution as soon as the refinancing loan is disbursed. An additional verification step checks that the repayment account is valid and that associated costs have been deposited, ensuring the loan proceeds are used safely and solely for repayment. All customers who complete the switch by January 31 next year will also receive KRW 200,000 in cashback.
KakaoBank Corp. said, “Alongside a subordinated-loan feature for small business owners who have difficulty securing additional funds because of existing loans, we now also offer a refinancing feature for those struggling with high interest rates. We expect to become a reliable pillar of support for small business owners.”
Meanwhile, KakaoBank Corp.’s real estate-backed loan for individual business owners, launched in October last year, was offered at an average annual interest rate of 3.74% during its first year. KakaoBank Corp. plans to prepare differentiated corporate banking services in phases for small and medium-sized corporations, including deposit-taking, lending and payment services.
[email protected] Lee Hyun-jung Reporter