Starting from the 13th, the prepayment fee will be reduced by more than half.
The Financial Services Commission noted on the 9th that starting from the 13th, the revised 'Financial Consumer Protection Supervision Regulation' will be implemented. A key aspect is that if borrowers repay suddenly before the maturity date, banks will only impose prepayment fees within actual expenses incurred, such as losses due to disruptions in fund operation and loan-related administrative and recruitment expenses.
A reduced fee rate will apply to loans signed after the 13th. This also includes cases of renewing existing contracts, but it will not apply if the loan amount and repayment conditions are the same as those in the existing contract.
The revision applies to financial companies subject to the Financial Consumer Protection Act, including banks, savings banks, life insurance companies, property insurance companies, and credit cooperatives. Mutual financial institutions such as Saemaul Geumgo, NongHyup, and Suhyup plan to apply it after discussions within the first half of this year.
Financial companies will reassess the prepayment fee rate annually and announce it on the websites of each financial association. The prepayment fees effective from the 13th until the end of this year mostly show a decline. The prepayment fee rate for fixed-rate housing loans in the banking sector has decreased from 1.43% to 0.56%, a drop of 0.87 percentage points, and for variable-rate credit loans, the fee rate decreased from 0.83% to 0.11%, a reduction of 0.72 percentage points.
For the five major commercial banks, it appears that, on average, the collateralized housing loans will drop by 0.55 to 0.75 percentage points, other secured loans by 0.08 percentage points, and credit loans by 0.61 to 0.69 percentage points. The savings bank sector will see the fee rate for fixed-rate housing loans decrease from 1.64% to 1.24%, a drop of 0.4 percentage points, while the variable-rate credit loan fee will decrease from the current rate of 1.64% to 1.33%, a reduction of 0.31 percentage points.