November 27, 2024

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Kim Joo-hyun (right), chairman of the Financial Services Commission (Yonhap)

The low-interest rate program for low-income earners and small businesses will be expanded to provide benefits to more people and businesses, the financial regulator said Wednesday.

The program, launched September 2022, currently provides low-interest loans to those who had taken out loans prior to June 2023 at an annual rate of 7 percent or higher, according to the Financial Services Commission (FSC).

It will be expanded to include those who take out such loans before Monday.

Those who quality for the low-interest rate loans will be allowed to switch their existing loans for up to 100 million won ($76,000), while small businesses will be allowed to switch up to 200 million won of their existing loans.

Also, the rate of the loans will be further lowered to 5 percent from the current 5.5 percent for the first 12 months, while the borrowers will be exempted from the 0.7 percent guarantee fee.

"This will ease the burden of low-interest rate loan users by a maximum of 1.2 percentage points. This is part of an effort by the banking sector to additionally support small business owners and others who are facing difficulties due to high interest rates," the FSC said in a press release. (Yonhap)