JingGumDaRi Jeonse Loan Guarantee eases interest burden
- Date 2015-07-03
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JingGumDaRi Jeonse Loan Guarantee eases interest burden
- Borrowers enjoy a significant cut in their annual interest rate from 7%-8% to 3%-4% when converting their short-term,
floating-rate Jeonse loan into a traditional Jeonse loan offered in the prime market -
floating-rate Jeonse loan into a traditional Jeonse loan offered in the prime market -
- More households will enjoy government-guaranteed loans as the annual income ceiling has been lifted -
Those who have taken out a higher-rate Jeonse loan with a secondary market lender such as insurers and credit
card companies by the end of this May can switch to a lower-rate one offered by the primary market under the
credit guarantee of Korea Housing Finance Corporation.
card companies by the end of this May can switch to a lower-rate one offered by the primary market under the
credit guarantee of Korea Housing Finance Corporation.
Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced on the 3rd that starting from the 6th
it will expand its JingGumDaRi Jeonse Loan Guarantee. The guaranteed loan transfer program swaps high-cost
secondary market Jeonse loans (with annual interest rates of 7%-8%) for prime Jeonse loans (with annual interest
rates of 3%-4%) offered by banks.
Borrowers eligible for this program are those who have taken out a Jeonse loan with a secondary market lender
by the end of this May. Before the expansion, the program covered only those who had taken out a secondary market
Jeonse loan by the end of November 2012. Along with the expansion of eligibility for the program, both income
certificates issued by the National Tax Service of Korea and salary certificates and pension account statements can
now be used for income verification to determine eligibility.
In addition, for households with 15 million won or less in income per year, the deemed income threshold has been
lifted to 25 million won - 50 million won (from 18 million won - 45 million won), thus raising the ceiling on the credit
guarantee.
The JingGumDaRi Jeonse Loan Guarantee is available for households who have reached a Jeonse arrangement with
a secondary market Jeonse loan provider when they meet the following qualifications: their Jeonse contract totals
400 million won or less (200 million won or less for regions other than the Seoul metropolitan area); their combined
annual income is 70 million won or less; and they do not have any late payments on the loan.
An HF official stated, “These changes have been made to follow up on the government's recent plan to strengthen
support for low income finance. The loan transfer program will help people in the low- and middle-income brackets
reduce their home loan burdens by switching to a prime Jeonse loan.”