Up to 5 loans consolidated into one
Bank introduces industry-first automated repayment system
Kakao Bank has launched a service allowing sole proprietors to consolidate up to five loans scattered across multiple financial institutions into a single real estate-backed loan. Business owners who previously had to track repayment schedules and balances across separate accounts can now manage all their borrowing from one account after refinancing.
Kakao Bank announced Wednesday the launch of its sole proprietor real estate-backed loan refinancing service. Eligible loans include unsecured business loans, guarantee-backed loans and real estate-backed loans taken out at other financial institutions. Borrowers must have held their existing loans for at least one year before applying.
Interest rates and loan limits mirror those of Kakao Bank's existing sole proprietor real estate-backed loan product. The minimum rate as of Wednesday stands at 3.04 percent per annum, with loans of up to 1 billion won ($744,000) available for terms of up to 20 years. Eligible collateral includes apartment complexes, officetels and commercial units. Borrowers whose available loan limit exceeds their outstanding balance may also apply for an increased refinancing amount.
The repayment process for existing loans has also been automated. Upon disbursement of the refinanced loan, funds are transferred directly to the repayment accounts at the borrower's previous financial institutions. The system verifies the validity of repayment accounts and confirms that concessions have been deposited, ensuring loan proceeds are used solely for repayment purposes.
The service is accessible through the sole proprietor real estate-backed loan page on the Kakao Bank app. Customers select "loan refinancing" when applying and then choose the products they wish to consolidate from their list of existing loans. All customers who complete a refinancing by Jan. 31 next year will receive a 200,000 won cashback.
Kakao Bank's sole proprietor real estate-backed loan, launched in October last year, supplied funds at an average annual rate of 3.74 percent during its first year. The bank plans to expand financial support for sole proprietors by adding the new refinancing service to its existing subordinate loan offering.
"By allowing business owners to consolidate loans spread across multiple financial institutions into one, we have improved both the interest rate benefits and the convenience of loan management at the same time," Kakao Bank said. "We will continue to expand our support so that small business owners can receive meaningful, practical help."
forest@heraldcorp.com
