This file photo, taken Oct. 3, 2021, shows signs on a bank’s loan programs that were put up on the exterior of a lender in Seoul. (Yonhap)
SEOUL, Nov. 16 (Korea Bizwire) — South Korea’s financial regulator has announced a plan to establish an online-based replacement loan system to reduce the interest burden of ordinary people who are suffering from the recent increase in interest rates.
The Financial Services Commission (FSC) said Tuesday that it will establish the system next year to launch operations in May next year, after establishing a task force composed of individuals from the financial and fintech industries this month.
The replacement loan system will allow users to repay existing or overdue loans by borrowing from financial institutions, giving people a chance to refinance from high interest rate loans to low interest rate loans.
Since there is no online system for this yet, people have to replace their loans by directly visiting the branches of local banks. Such a system remains subdued due to a lack of platforms that enable the comparison of loan products.
Against this backdrop, the FSC plans to establish an online-based replacement loan system that can relay and computerize the internal procedures and situations of each financial institution through the FSC network.
In addition, the FSC also plans to enable financial institutions to check in advance existing information, including various commissions, at the loan comparison stage through the online platform.
M. H. Lee (mhlee@koreabizwire.com)
